If you’re still confused about the new state budget — Does education spending increase? If so, how much? Did tax reform kill teacher pay raises? What about Medicaid spending? — you’ll want to read John Hood’s new Daily Journal column on how to read the state budget documents.
On the education question:
Authorized General Fund spending on K-12 education will be about 4.8 percent higher than last year’s authorized amount. If you project actual spending for 2013-14 based on historical trends, it will be about 4.6 percent higher than last year’s actual spending (and higher than the continuation budget). Inflation and student enrollment are projected to rise by a combined 2.5 percent or so, far lower than the General Fund spending increase.
As for those pay raises:
Gov McCrory’s original budget plan this spring included one-percent raises for public employees and retirees in 2013-14, a $171 million item. The final budget didn’t include them, although it did increase paid vacation days. Liberal critics argue that the inclusion of the Republican tax reform nuked the pay raise for 2013-14, but that wasn’t the real problem. The addition of the tax reform plan changed the governor’s revenue availability for 2013-14 by only $35 million (that’s $87 million for the final tax package minus the $52 million McCrory originally set aside for just the estate-tax component of the package). What really knocked McCrory’s first-year budget out of whack was $185 million in higher-than-expected Medicaid costs through the fiscal year ending in June, plus $235 million in higher-than-expected HHS spending, mostly for Medicaid, for the 2013-14 fiscal year.