by Sarah Curry
Director of Fiscal Policy Studies
Yesterday the House and Senate leaders sent out a press release about the most recent budget agreement. The new budget is $21.25 billion dollars. Don’t let that fool you, that is just the state’s General Fund. That doesn’t include transportation, the numerous trust funds and all of the federal funds that are spent in North Carolina each and every year.
Conservatives have been harping on government officials for years to rein in spending, and through that have come up with a policy recommendation to accomplish limited government spending. It’s called a Taxpayer Bill of Rights, or more commonly refereed to as a TABOR.
A TABOR would limit state government to only increase spending by population and inflation growth plus and special spending provisions approved by voters. So the formula would look something like this:
NC TABOR Limit = (Previous Fiscal Year Spending) x (1 + Inflation + Population Growth) + (Voter-Approved Revenue Changes)
For FY 2014-15 the population has been forecast to grow 1.6%, and inflation (using CPI-U) at 2.2%. So the combined amount would be 3.8% (.016+.022).
So North Carolina’s TABOR with the new budget proposal would look something like this:
($20,630,767,645) x (1.038) = $21,414,736,816
Without knowing the specifics of the new budget agreement, it is safe to say the $21.25 billion spending plan falls below a TABOR.