Get The Facts On State Spending Growth

The public overwhelmingly believes that state budget deficits are a result of rapidly rising government spending. In spite of a flawed claim to the contrary, a thorough analysis of state spending trends suggests runaway spending is very real, and to blame for the current deficit.

Left-wing Budget & Tax Center’s (BTC) attempted “myth-busting” is out of touch, intentionally misleading and ignores relevant data

In a December 2008 “BTC Brief,” the NC Budget & Tax Center claims to bust the “myth of runaway spending in North Carolina.”¹ The brief is not only out of touch with North Carolina citizens (as noted below), it is also highly misleading.

• The author cherry-picks a nine-year spending comparison to mislead the reader. A more complete examination of per capita, inflation-adjusted General Fund spending reveals the nine-year comparison to be the exception to the rule.²



• BTC’s analysis also ignores the rapid buildup in spending during the 1990’s, the era just prior to the period BTC selects for analysis.
  • During the nineties, per capita, inflation-adjusted spending shot up by 22.4% (from 1990 to 1999)³
• Furthermore, consider the explosion of debt spending. The state has authorized roughly $6.2 billion in new debt spending since 2000, doubling North Carolina’s per capita debt in just six years (from FY 2001 to FY 2007).⁴

North Carolina Voters believe budget deficits are the result of high spending, and prefer that lawmakers balance budget and stimulate economy through spending reductions

• 77 percent of North Carolina voters said in an August, 2005 poll that “high government spending” was the single most important cause of that year’s reported budget deficit, compared to only 8 percent who responded “taxes too low to meet state needs”⁵
• 69 percent of voters stated they would be “somewhat or much less likely” to vote for a candidate for state legislator who voted to increase taxes to fund increased spending⁶
• 68 percent of voters believe the General Assembly should “cut existing programs” in order to balance the current budget, compared to only 16 percent that replied “raise taxes”⁷
• 73 percent of voters believe it is more important to cut taxes to help stimulate the economy, compared to just 14 percent who believe it is more important to increase state spending⁸

Conclusion

The evidence is clear: per capita state spending in North Carolina has climbed substantially over the last three decades, even when adjusted for inflation. The trends have been widely recognized by voters, and state legislators would be wise to get in touch with the sentiments of North Carolinians. Consider, for instance, the size and scope of per-person state government spending in 1994. Around that time President Clinton was declaring that “the era of big government is over.” Did the amount of spending per person in North Carolina need to grow by another 26 percent over the next 15 years, even after adjusting for inflation?

Instead of being fooled by misleading and incomplete data, lawmakers must instead embrace their role as responsible stewards of tax dollars collected from hard working North Carolinians.

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¹“Busting the Myth of Runaway Spending in North Carolina,” NC Budget & Tax Center BTC Brief, December 2008. Available at: http://www.ncjustice.org/assets/library/1342_btcbrief8dec2008spend.pdf

²Data obtained from spreadsheet provided by Joseph Coletti of the John Locke Foundation. More on Coletti’s findings are included in “Spending Beyond Government Means,” a John Locke Foundation Spotlight Report, January 7, 2009. Available at: http://www.johnlocke.org/acrobat/spotlights/spotlight-364_spendingbeyondmeans.pdf

³Ibid

⁴Debt authorizations taken from annual budget bills, FY 2000 through FY 2009.
Per capita debt source: Comprehensive Annual Financial Report for FY 2007; Office of State Controller
http://www.ncosc.net/financial/07_cafr/Statistical_Section/Table10.pdf

⁵Civitas Institute’s DecisionMaker poll, August 2005.

⁶Civitas Institute’s DecisionMaker poll, June 2005.

⁷Civitas Institute’s DecisionMaker poll, January 2009.

⁸Civitas Institute’s DecisionMaker poll, April 2008.