- Progressives urge state budget writers to return NC to ‘pre-recession’ budget levels
- That represents, however, a decades-long high-water mark of unsustainable spending
- Progressives cheered Obamacare because it was supposed to stem the unacceptably high rate of growth of healthcare costs
- But progressives grew the cost of state government at an even faster rate leading up to the last recession
In 2009, North Carolina progressives joined leftists across the country in cheering the passage of the Affordable Care Act, more popularly known as Obamacare. This law was necessary, they insisted, because healthcare costs were skyrocketing at such an alarming rate, a major overhaul of one-eighth of our economy was needed.
But what if I told you at the time Obamacare was passed, the cost of North Carolina state government was rising at an even faster rate than healthcare costs?
North Carolina progressives will never be satisfied with the size of state government or the budget. One of their most oft-repeated talking points over the last few years is their insistence that state spending needs to return to “pre-recession levels.”
What they conveniently leave out of such pleas is any evaluation of how “pre-recession” levels were a decades-long high water mark in spending, the culmination of an eye-popping spending binge that nearly bankrupted the state when recession hit.
One other way to look at these trends is to measure the cost of state government per person and compare that “cost of living” to overall inflation rates as well as the rising cost of common items like housing and utilities, groceries, clothing – and yes, even healthcare.
We can examine the cost of state government leading up to the Great Recession by tracking per capita state budget growth from 1988 to 2008. During that time, state spending per person rose a total of 144.6 percent. Similarly, the growth of state General Fund tax revenue during that time totaled 139.3 percent.
Compare this growth rate to the cumulative growth rate of the Consumer Price Index (CPI) – a measure intended to reflect the overall cost of living for the average citizen – of just 82.4 percent during that time.
In other words, the cost of state government leading up to “pre-recession” levels grew at a rate about 1.7 times the overall growth rate of the cost of living.
Moreover, the cost of North Carolina state government rose dramatically faster than the (national) cost of “housing and utilities” (88.6 percent), groceries (67.4 percent) and “clothes and footwear” whose costs actually fell by 12.5 percent during that time.
Think your utility and grocery bills had been taking a bigger bite of your family budget over the years? Your North Carolina state government was growing its bite of your budget at a significantly faster clip.
Finally, let’s compare North Carolina state government’s ‘cost of living’ growth to healthcare costs. From 1988 to 2008, national average healthcare costs grew by a total of 123.4 percent – still well short of the growth of state government.
Let this be clear: North Carolina progressives argued that healthcare costs were rising at such a dramatic rate that the nation’s healthcare industry needed an historic overhaul. But those same progressives were increasing state government’s costs at an even faster pace.
And its today’s progressives that insist we need to return to such reckless and oppressive state budget growth to satisfy their insatiable desire for spending other people’s money. Don’t be fooled.
Data Sources:
CPI measure taken from Jan. of each year, within each given fiscal year. Data accessed online June 6, 2019 at https://inflationdata.com/Inflation/Consumer_Price_Index/HistoricalCPI.aspx?reloaded=true
Federal Reserve of St. Louis, Table 2.3.4. Price Indexes for Personal Consumption Expenditures by Type of Product. Available at https://fred.stlouisfed.org/release/tables?rid=53&eid=43831&od=1988-01-01#
Budget numbers taken from Gov. Cooper’s Recommended State budget FY 2019-21, Appendix Table 2B. General Fund tax revenue from Appendix Table 3A, pg. 6. Accessed online June 6, 2019 at: https://files.nc.gov/ncosbm/documents/files/REC2019-21_AppendixTables.pdf
Population estimates for July that begins each fiscal year from the Office of State Budget and Management, State Demographer. https://www.osbm.nc.gov/demog/county-projections
