July 24, 2013. On July 21, the state House and Senate leadership released the final state budget for FY2013-15. Although the plan proposes increasing overall spending by 2 percent from levels needed to maintain current services, it continues to cut several specific key investments and keeps overall state spending at a 40-year historic low, well below pre-recession levels of investment. This is in part due to legislators’ decision to reduce available revenues by more than $524 million over the biennium through a series of tax cuts that was signed by the Governor yesterday.
By the numbers, the final $20.6 billion budget increases overall spending by 1.9 percent over the base budget—the amount of spending necessary to keep providing services at current levels (see the chart below). Most of this increase is driven by an 8.2 percent increase in the Health and Human Services area of the budget (largely due to increases in the Medicaid program) and a 3.5 percent increase in the Natural and Economic Resources area of the budget.
Aside from these increases, however, the final budget will make deep reductions in Public Education (1.5 percent), Community Colleges (1.6 percent), and the UNC System (4.7 percent). Unfortunately, these spending cuts come on top of historic disinvestment in these areas—spending is already significantly lower than the spending levels in place prior to the Great Recession in FY2008. Specifically, the final budget will enact funding levels that are down 6.4 percent for Public Education over the past five years, down .05 percent for Community Colleges, and down 9.7 percent for the UNC System. Taken together, overall spending across the entire state budget would drop by 8.3 percent from pre-recession levels under the final budget.