Two sides of a budget surplus
Published: Sun, Jul. 01, 2007 12:30AM
Modified Sun, Jul. 01, 2007 02:23AM
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closeOne source of help for lawmakers as they try to resolve the budget battle is a growing surplus. The legislature's fiscal analysts estimate it could exceed $1.4 billion for the 2006-07 fiscal year.
The surplus is largely the result of tax collections being stronger than estimated. Fiscal analysts say income tax collections from corporations and high earners, for example, are stronger than expected.
But lawmakers and Easley say the surplus isn't as big as it sounds.
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That's because lawmakers typically start the budget process with holes to fill due to rising costs in areas such as Medicaid, salaries and teacher bonuses. They are devoting part of the surplus to the state's rainy day fund in case of emergencies such as a hurricane and to a repair and renovation fund to keep up state facilities.
Roughly half of the surplus is one-time money - the difference between winning the lottery and a weekly pay check. Devoting all of it to recurring expenses, such as a pay raise or a tax cut, leaves a hole in future budgets.
That's why lawmakers try to devote such money to one-time expenditures such as new buildings.
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