The enacted budget also represents a nominal increase from the initial level of spending approved in the two-year budget enacted last year, which set out a spending plan of $27.0 billion. As shown below, the real level of investment - considering the high rate of inflation over the last year - is actually lower than what was appropriated for the last fiscal year. The budget for FY 2022-2023 totals $27.9 billion, which represents a nominal increase (before adjusting for inflation) over the previous year’s budget total of $25.9 billion. General Fund spending remains at historic lows
Budget writers touted some nominal increases in funding, but once the level of inflation that happened over the last year is factored in, the real level of investment is lower than the already depressed level in last year’s budget. Real investment fellĪfter years of cutting services and handing out tax cuts to rich people and profitable corporations, the 2022-23 budget further erodes the level of investment in most key areas of the budget. The upshot is a budget that allows public services to erode and doesn’t meet the cardinal economic challenge of the current moment. Instead, the budget was developed behind closed doors and passed within a few days of becoming public without any opportunity for any amendments whatsoever. If budget writers had started with a clear understanding of what it would take to continue existing services in the context of rapid inflation and had provided more space for real public debate, some of these inadequacies could have been brought to light. These shortcomings go beyond political ideology. Many public servants left for better paying opportunities, unsurprising in a tight labor market, which contributed to severe staffing shortages in schools, correctional facilities, and many other parts of state government. The modest pay raises for state employees and teachers failed to keep up with inflation and resulted in a real pay cut. The hammer of inflation also fell on public servants, pushing many out of their jobs and into the private sector. Instead, legislative leaders stashed billions in a variety of reserves and left vital government services unfunded. A bump in revenues driven by federal stimulus, a faster than expected recovery, and record corporate profits meant that our state could easily have made up for the lost buying power of government funds. Unfortunately, the 2022-23 budget allows inflation to undermine the real level of investment that North Carolina is making in everything from K-12 education to public safety.īudget writers didn’t need to let the real level of investment slide this year. Governments feel the pinch of gas prices climbing higher, food becoming more expensive, and increased competition from private sector employers as well as most of the impacts of inflation that affect consumers and businesses. Inflation isn’t just a pocketbook problem, it’s a budget problem as well.
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