Civitas: What Belt Tightening?

It’s election time.  The honorables on the right side of the aisle  on Jones Street are running around telling us how conservative and careful they’ve been with the people’s money.

The folks on the left — and their allies in the media and activist communities — are telling us the honorables on the right have unreasonably and mercilessly cut the state budget.

The crew at NC Civitas is singing a much different tune about the state House budget plan:

In 2011 North Carolina lawmakers passed a two-year state budget which legislators are reviewing this year. The current budget has built in increases of roughly a quarter billion dollars for the second year, and decisions were made based on revenue forecasts at that time. The House budget proposal, however, includes another $400 million in additional spending on top of that.

As of now, the state is on track to run a slight surplus in the current fiscal year, but the House’s recommended additional spending increases could translate into a deficit for FY 2012-13.

Following is our summary of the House budget plan:

The five major North Carolina House appropriation committees that make up the majority of the state’s General Fund budget have settled on their proposals tweaking the second year of the biennial budget passed last year. Rather than holding the line on spending, or even finding some more sensible reductions, the plan would increase spending for fiscal year 2012-13 by nearly $400 million over what was passed last summer. Items such as debt service and reserves for state employee retirement benefits still need to be added separately.

The increases are even more curious given the fact that the most recent revenue projections for 2012-13 show virtually no additional revenue becoming available in the coming fiscal year. This issue, of course, leads to the question: where do House budget writers think they are going to come up with an additional $400 million?

The most likely guess is they will seek to raid various trust funds established for specific purposes. For instance, there was some talk of lawmakers looking to transfer money from one of the transportation trust  funds. Moreover, the Natural and Economic Resources budget includes a transfer of $30 million from the One North Carolina Fund (the governor’s corporate welfare money) to the General Fund to finance general operations. In addition, public education increases are budgeted with the partial aid of $42 million in anticipated surplus state lottery receipts. But that still leaves more than $300 million in unfunded increases.

Amidst all the recent talk coming from Raleigh about fiscal restraint, tough economic times and belt-tightening, it is striking that the House would craft a budget proposal hiking spending by another $400 million.

Seems like old times…