The Voice of Business, Industry & the Professions Since 1942
North Carolina's largest business group proudly serves as the state chamber of commerce

N.C. Budget Reform

Position: The General Assembly should continue reforming the state's budget process begun in 1991. Fiscal expenditures should be based on some other measure than revenue projections--the amount of prior calendar year revenues, plus growth and inflation, as an example. The rainy day fund should be continued for unanticipated needs. Moreover, the budget should be approved in a timely manner to meet statutory deadlines for local governments.

Explanation: Revenues for the State of North Carolina have increased each year, even in times of recession. The increases, however, have not always been uniform. Budget estimates based on the anticipated percentage growth in state revenues have fluctuated greatly. With the present size of the state budget, a 1% error in the revenue estimates is a big problem. The lack of precision in revenue estimates has been a major factor in recent budgetary problems.

The natural tendency in the political process is to keep taxes as low as possible and to provide the most programs possible.  Once a program has been established, there is great reluctance to ever dismantle it, especially after staff is hired, and the pro-ram develops an even wider constituency.  In the minds of those who administer and who benefit from the program, it becomes almost impossible to remember the time when the program did not exist.  One would not have to look back too far in the past to see that there are literally hundreds of programs and agencies run by the state government that did not exist ten years ago. This puts great pressure on the economists who have the responsibility to estimate government revenues each year.

If you have comments on any of the NCCBI positions or other issues,
please click here for a feedback form

Session Limits
Four Year Terms For Legislators
Judicial Selection And Retention In North Carolina

Visit us at 225 Hillsborough Street, Suite 460, Raleigh, N.C.
Write to us at P.O. Box 2508, Raleigh, N.C. 27602
Call us at 919.836.1400 or fax us at 919.836.1425

Co_pyright 1998-2001, All Rights Reserved