Editorial

The State Budget
North Carolina’s budget crisis is entering its third year amid the now-familiar debate over cutting spending further or raising taxes higher. As we were going to press with this issue of the magazine, a House-Senate conference committee was confronting new projections of lower-than-expected tax revenues for the fiscal year that began on July 1, and trying to decide what else to cut, or what else to tax, to balance the budget.

Dealing with the ongoing financial crisis has consumed the time and attention of the governor and the General Assembly and produced an outpouring of criticism from many special interest groups about the harm that budget cuts are doing to their favorite programs. But how much has the state budget actually been cut? Has state spending actually declined? That’s difficult to tell because, while this issue has consumed reams of newsprint, the story has been reported piecemeal, without proper perspective.

We attempt to provide that perspective in this month’s State Government column. The story compares overall state spending, and that of individual departments and agencies, with levels in fiscal 2000-01 with levels proposed by the governor for the 2003-04 year.

Before reading that story, however, let’s test your perceptions of the state’s budget by writing down your answers to the following questions. Then read the article and see how close your perceptions are to reality.

Since the economic downturn began in fiscal 2000-01, the operating budget of state government, excluding transportation, has:
A. Decreased 3 percent
B. Increased 2 percent.
C. Increased 5 percent
D. Increased 8 percent

Excluding education, the number of jobs in state government has:
A. Decreased 4.5 percent
B. Decreased 2.5 percent
C. Increased 2.5 percent
D. Increased 4.5 percent

Mainly because of exploding costs of the Medicaid program, over the past three years the budget for the Department of Health and Human Services has:
A. Increased 14 percent
B. Increased 24 percent
C. Increased 34 percent
D. Increased 44 percent

Finished writing down your answers? Now read the State Government column to find out how many you got right.

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