State's spending resumes its surge

Jimmy Love had a case of sticker shock when he returned to the North Carolina legislature this year.

The state is on its biggest spending spree since the late 1990s, before the dot-com bubble burst and recession staggered the state.

When Love last served in the House, in 1975, the state's budget was $1.7 billion. When he returned this year, the budget had ballooned to $20.7 billion.

"That's one reason I voted against the bill," said Love, a 72-year-old Sanford lawyer and one of two House Democrats to vote against the budget. "I thought it was too much. It just keeps growing and growing. I think the public is catching on to that."

The striking increase was not mentioned this week when Democratic Gov. Mike Easley signed the budget. Instead, the budget was hailed as a tool to prepare North Carolina for the future -- including putting an additional $1 billion into education.

"I see this as a historic and dramatic moment as North Carolina emerges as a leader in education for the 21st century," Easley said.

Democrats, who control state government, say North Carolina is making up for the recession's lean years as well as preparing for the global economy.

"We are playing catch-up to some extent from earlier in the decade," said House Speaker Joe Hackney, an Orange County Democrat.

GOP troubled

Republicans, though, are troubled about the increase in the state's past four budgets, which have grown by 9.5 percent, 9.7 percent, 8 percent and 7.1 percent, respectively. They note that the budget is growing faster than the state's population or the rate of inflation.

"We are spending a lot more than we should," said Senate Republican leader Phil Berger of Eden. "The additional spending does not seem to provide us with any measurable improvement in services."

Historically, North Carolina has not been a big-spending state like New York or California. With its poor rural background and broad conservative streak, North Carolina has typically spent well below the national average.

There have been spurts throughout its history -- in the 1920s to build roads and the university system under Gov. Cameron Morrison, after World War II under Gov. Kerr Scott and in the early 1960s under Gov. Terry Sanford.

Streak of activism

North Carolina is experiencing a 16-year run of activist Democratic governors -- first Jim Hunt and now Easley -- who have pushed to spend more on education. Hunt and Easley have supported efforts to raise teacher salaries to the national average, start and expand pre-school programs such as Smart Start, and keep the University of North Carolina system nationally competitive.

This year's budget includes a broad array of new programs with big price tags, such as providing scholarships to poor children ($100 million), expanding pre-school programs ($56 million), allowing more high school kids to take college courses online ($11.5 million) and providing a tax break for the working poor ($48 million).

North Carolina has increased spending during the past three decades slightly faster than the national average, according to state and national budget figures. Since 1979, North Carolina's budget has risen an average 7.9 percent annually, compared with an average 6.5 percent in all states.

Fiscal analysts cite several reasons. North Carolina is one of the fastest-growing states, and that means increasing numbers of kids in school, more state employees and a greater demand for services. Costs are rising, particularly on health insurance.

But even with its budgets on the rise, North Carolina spends less than most other states.