THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, January 22, 1995 TAG: 9501190189
SECTION: CAROLINA COAST PAGE: 04 EDITION: FINAL
TYPE: Letter
LENGTH: Medium: 76 lines
There has been a lot of talk in the news media and in political campaigns about the state budget. Some of it has been true; some is just plain false. I want your readers to know what North Carolina does, and how much it costs - and get ready, because it is expensive.
Did you know that we spent more than $5 billion for education last year? That is more than half of the general fund budget, and it doesn't include county and city dollars for education.
It is very expensive to put teachers and textbooks in our classrooms, but educating our children properly must be a high priority. We need these resources, more local control and a new focus on the basics to meet our goals.
The basics of criminal justice - prisons, courts, state troopers - cost North Carolinians nearly $1 billion last year, and that doesn't include the bill for local police officers. Most would agree that these services are of great importance.
As you can see, three out of every five dollars in the general fund pay for schools and public safety.
The total state budget of $18 billion for 1994-95 can be broken down as follows:
General Fund - $10.3 billion
Highway Funds - $1.5 billion
Federal Funds - $4.6 billion
Agency Receipts - $1.6 billion
The highway fund supports the Department of Transportation and builds roads across North Carolina.
The federal funds help pay for our interstate routes 95, 85, 77, 40 and 26. They also pay for part of federal welfare and Medicaid programs.
Congress passed laws that require North Carolina to share some of the Medicaid costs. This year we are spending almost 10 percent of the General Fund ($940 million) for Medicaid.
Last year there was much talk about the $1.2 billion the General Assembly had to spend.
About $700 million of the increase in the budget went for one-time items such as moving the teacher payday and fixing a bookkeeping trick, extra money for the rainy day fund savings account, capital projects and other items. North Carolina pay for schoolteachers was ranked 37th nationally, and it cost $336 million to raise teacher and state employee pay.
Did you know that $485 million wasn't even spent? Of that, $214 million was placed in a rainy day savings account by the General Assembly. As a result, North Carolina will be able to weather the next recession and keep our prisons going, our schools open and not have to raise taxes.
Our strong economy and conservative budgeting will result in $1.1 billion more available to the 1995 General Assembly.
The cost of continuing state programs at the current level is an additional $375 million due to inflation and other cost increases. Some of the major increases include Medicaid ($130 million federal mandate), hiring prison guards for the Department of Corrections ($91 million), and the cost of 22,500 additional schoolkids ($65 million). The federal Medicaid mandate has grown at an average annual rate of 21 percent since 1986-87, and the corrections budget increases have been 13 percent. More and more of our state budget is consumed by prisons and federal mandates each year.
All told, $515.6 million will be needed to fund the cost of existing programs and the budget reform savings. This will leave a total of $288.3 million for recurring spending items (salary increases for teachers and state employees, permanent tax cuts) and $275.9 million for capital projects and other one-time items.
This year we expect to have $1.1 billion to spend or send back to the taxpayers. But after federal mandates, prison costs and hiring more schoolteachers, it isn't quite that simple. Then again, it wasn't so simple last year either.
Marc Basnight
President Pro tem
N.C. Senate by CNB