About the 2003-2004 State Budget...
Rep. Debbie Clary
July 1, 2003

On June 30, Gov. Mike Easley signed a $14.8 billion budget which passed both House and Senate Chambers just under the wire on Sunday, June 29th. The state budget year begins July 1, 2003 and will fund state government through June 2005.

The much debated budget is a compromise between Republican and Democrat Leadership in the House as well as between the Somewhat-Conservative House and Not-So-Conservative Senate Leaders. One could say that it protects public services and continues funding the growing demands of public education. However, my noted opposition to the spending plan comes from a lack of support for new spending in duplicative and new social programs. In a year of fiscal uncertainty, I felt it was irresponsible to continue funding social programs that have shown little to no value, while putting at risk health care needs of the most vulnerable citizens.

A couple of other items that could have been put on hold during a fiscal crisis included the reduction of second-grade class-size which was funded at $25.3 million. With a shortage in many of our counties on teachers and space, this simply didn’t make sense. Another $46.6 million is allotted for 518 new university positions that would have been prudent to delay.

I would also like to mention that funding of state payroll in our state is done at 100 percent, while most other states fund at a more realistic level of 96 or even 98 percent. Funding at 98 percent would have freed up approximately $70 million in the states budget. Doing the three items mentioned here, we could have given families the intended and promised tax breaks instead of delaying them. Or perhaps, the state employees could have seen a bit of a raise instead of the one time bonus that won’t add up in next year’s paycheck.

Much of the debate on the budget and a strong point of contention for me as well was the impact of the state spending plan on economic development. Representing two of the counties with the highest unemployment rate in the state, my greatest concern are the continuance of a higher sales tax and higher income taxes. Higher sales tax will impact buyers to the tune of $427 million with the income tax increase on families being $124 million by delaying intended tax breaks.

In a year that spending should have decreased, there is a three percent increase in General Fund expenditures for the next fiscal year. That increase rises to five percent in the second year of the biennium.

What’s in the budget for teachers and state employees? Pay increases for teachers, averaged 1.8 percent while state employees received a onetime bonus of $550. A contribution of $113 million to the State Health Plan system will mean that state employees won’t see the dreaded increases in co-pays or deductibles.

This budget reflects one theme, continuing to raise taxes to pay for new public assistance programs, and give money to non-profits. (They do what?) While we should have considered only the basic functions for which government is responsible. The basic responsibilities of government are education and safety.