Research Report

North Carolina Budget in Pictures FY2017-18

posted on in Fiscal Insight, Spending & Taxes

The state budget is one of the most important bills the North Carolina General Assembly considers each year. For the current fiscal year, which ends June 30, 2018, the budget bill (S.L. 2017-57, S.B. 257) directs $27 billion in direct appropriations of all state revenues, as well as another $20 billion in funds from the federal government, the North Carolina Education Lottery, community college and university students, and other sources. Changes in the tax system and various policies often are included as provisions in the budget. Legislators usually conclude their legislative session and head home soon after they pass the budget.

Despite its importance, few people give much thought to the full budget picture. We have designed this website to help more people understand the total budget.

We will revise and update these pictures and provide new charts on other budget questions regularly. Please let us know if there is something you would like to see us add.

Organization

I. Overview

The first and largest section provides an overview of the state budget. It shows overall tax and spending levels, transportation spending, how federal money is used, contributions from the lottery, and trends over time.

II. Spending

The second section shows how state government uses the taxes and receipts it collects. One of the important things to notice is how much the social services and health programs depend on federal funds. Universities are also indirectly dependent on federal funds through financial aid that students use to pay tuition. As a result of this dependence and strings attached to federal funds, North Carolina actually has little leeway to set its own direction to meet the needs of millions of people.

III. Taxation

The third section provides a closer look at the four main taxes state government uses to collect money from its citizens—directly through the individual income tax and the sales and use tax and indirectly through the corporate income tax and franchise tax. Some taxes are more predictable and stable than others, which does not argue for one over another, but is something people involved in policy should bear in mind during the year.

IV. Future

The final section examines future spending, recent spending reforms, and challenges to the long-term financial sustainability of past promises. It covers current and future employee compensation, state debt, savings, capital investment, and unfunded liabilities.

I. OVERVIEW

General Fund Revenues
General Fund Appropriations
Transportation Revenue and Spending
General Fund Growth
Appropriations Remain Stable
Total Budget Receipts
Total Budget Expenses
How Total Funding is Distributed
Spending Continues To Grow
State Government Consumes More Personal Income
Federal Funds And The Lottery
What Do Federal Funds Pay For?
Where Do Federal Funds Go?
State Lottery Funds

II. SPENDING

General Fund Appropriations and Receipts
Sources of Education Funding
Funding for UNC System schools
Health & Human Services Funding – Without Medicaid
Health & Human Services Funding – With Medicaid
Justice and Public Safety Funding
Natural and Economic Resources Funding
General Government Funding

III. TAXES

How the State Collects Money
Why State Government Needs a Savings Reserve
Forecast vs. Actual Tax Collections
Volatility of Transportation Taxes

IV. FUTURE

Revenue Forecasts and Budget Stability
Rainy Day Fund
Debt, Capital, and Infrastructure
State Government Has Less Debt
Health And Pension Benefits
Retiree Health Benefits
Pension Obligations

Joe Coletti is Director of Oversight Staff for the NC House Majority. Joe is a former Senior Fellow at Locke. Here, he examined fiscal and tax policy. He previously headed the North Carolina Government Efficiency and Reform initiative… ...

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