Governor Cooper’s proposed budget for this fiscal year (2018-2019) would spend $1.5 billion more than the current year. Despite Gov. Cooper saying in 2017 that the state government would spend no more per person in 2018-19 than it did in 2016-17, spending would increase by 6.5%. This is almost as much as the legislature will have done in the last two years (6.7%).
The proposed budget would raise taxes and take on new debt, leaving a $460 million hole in the budget the next two years. John Locke Foundation’s Joe Coletti analyzes Cooper’s budget plan in this piece and warns that it will divert millions in other sources and increase dependence on potentially unreliable federal sources.
The biggest headline has been the 1.7 percent increase in teacher pay from current law, which already includes a 6.2 percent bump to average pay, according to the Department of Public Instruction.
Taxes would increase $164 million with repeal tax cuts set to take effect in January 2019 and conformity with aspects of federal tax reform. The budget would reduce the unemployment tax rate and divert $60 million a year from the now-stable unemployment fund to new degree-completion and job-training programs.
Despite the tax increases, most of the money for new appropriations would come from higher revenue estimates and $1.1 billion in unspent money from the past two years.
Compounding the fragility, Gov. Cooper would add $2 billion in General Fund debt for school construction, $3 billion in highway debt, and $100 million in other debt that does not need taxpayer approval.
Click here to access Joe’s piece that has interactive charts showing projected spending over the next four years based on Gov. Cooper’s proposed budget.
