by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
State legislators may have the budget done this weekend and to Gov. Roy Cooper next week, with no amendments allowed. A 40-person conference committee with no Democratic members has done most of the work and now it is between House Speaker Tim Moore and Senate President Pro Tem Phil Berger. They claim the bill is merely amending the budget that passed last year. It seems a stretch of how conference committees are supposed to work, since they agreed on the budget that is already in place for the next fiscal year and neither chamber has voted on a bill this session.
As a lazy person, I am grateful to have fewer budget bills to examine. As a taxpayer, I recognize that any budget that emerges will be a marked improvement over Gov. Cooper’s structurally imbalanced $1.5 billion spending increase. But as a person who cares about legislative process, I am concerned about the precedent set here and the potential for future legislatures to use it for higher spending and higher taxes.
State revenues have benefited from federal tax reform with significantly higher collections than recent years every month since January, as reported by the State Controller’s monthly General Fund reports. Collections in April were $3,175.5 million, $33 million more than the next month, in April 2016. With revenues well ahead of forecast and spending slightly below, the cash balance is up to $2 billion. That may shrink by the end of the year, but it should provide opportunities to shore up savings, pay down unfunded obligations for retirees, and even help with some capital investments.