by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
If you want to see the difference in philosophy of government, look first at spending. For a glaring example, compare Gov. Roy Cooper’s big budget blowout with the sustainable spending state senators would enshrine in the state constitution.
Cooper’s budget proposal would increase General Fund appropriations $2.9 billion in FY2021-22, spend nearly every dollar of a $5 billion surplus over the next two years, and borrow another $4.7 billion for various capital projects. In addition to those acknowledged increases, it pretends that Medicaid expansion that would likely cost $600 million per year and a misguided effort to equalize educational outcomes at the cost of hundreds of millions of new education spending per year would have no impact on state spending. The plan would all but guarantee higher taxes in two years and, based on past experience, would put state employee jobs and state programs at risk of cuts in a future recession.
In contrast, state Senators Paul Newton, Warren Daniel, and Bill Rabon would amend the state constitution to ensure future spending restraint with Senate Bill 717. Their Taxpayer Bill of Rights amendment would cap spending increases at the average rate of inflation and population growth over the three calendar years prior to the start of a fiscal year (2018–2020 for the coming fiscal year), and would put any future tax increases in the hands of voters. General Fund appropriations in FY 2021-22 could increase no more than $1.7 billion if applying the inflation and population growth formula since FY 2018-19, the last budget year before Covid, a savings of $1.2 billion that could reduce state debt and unfunded liabilities, assist recovery after natural disasters, offset revenue losses in economic downturns, or be returned to families and businesses for their own needs. That would also mean faster economic growth and more jobs for North Carolina.