Articles have been flying around about the education spending argument since the legislative session adjourned.  After many organizations came out with claims of “Education was cut” or “Education funding increased” the new claim is that “Both are right”.  The most recent is an article posted by WFAE, Charlotte’s NPR News Source.  The article makes a good point, both the Left and the Right use numbers that support their arguments, but to say that both claims are correct is not mathematically accurate.

There are multiple different budget figures that are released during the budget process.  Some include certain figures, such as pay raises and retirement benefits for state employees, and some do not.  So it is very important to know what is included in each budget figure before a comparison is made.

The argument is centered on baselines, which to use when measuring government spending and which not to use.  Without getting into too much government jargon, the simple answer is to use the same budget and compare that to itself from a previous year.  So if you are comparing actual spending, compare actual spending from 2012 to actual spending from 2013– plain and simple.

Ok, the government jargon stuff.  Many are debating the continuation budget versus the enacted budget by the legislature – again, these are two different budget figures that should not be compared.  The continuation budget includes prior year actual spending, recommended changes to the budget by agencies, adjustments for inflation, mandatory rate increases, and operations of new facilities.  The enacted budget does not include any pay increases, retirement benefits, or health benefits for state employees, these appropriations are held in a reserve account.  That is why actual spending for each agency is higher than the amount in the enacted budget by the legislature; state law mandates that the transfer from the reserve account to the agencies cannot happen until the appropriation bill (budget) is signed into law.  The continuation budget includes actual spending, the figure passed by the legislature doesn’t – one cannot compare these two different budgets for this reason.  They have different input variables and they measure different things.

If arguments claim there was a cut from one continuation budget to another, that is a valid argument.  The same goes for enacted to enacted or actual to actual.  Simple subtraction forces us to use an apple-to-apple comparison.  It’s not a hard concept, but one that requires an understanding of how the budget is created and what is included along the way.