North Carolina state budget (2010-2011)
- 1 Fiscal Year 2011 State Budget
- 2 Budget background
- 3 Accounting principles
- 4 Budget transparency
- 5 See also
- 6 External links
- 7 Additional reading
- 8 References
As of July 2010 North Carolina had a total state debt of $43,742,516,373 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.
|Total spending||Education||Departments||Healthcare||Protection||Natural resources||Debt service|
Fiscal Year 2011 State Budget
- See also: Archived North Carolina state budgets
A Dec. 17, 2010 memo directed agencies to find additional 2.5% savings by keeping vacant positions open, halting salary increases and limiting purchases, travel and training. It was expected to save the state $200 million this fiscal year.
The North Carolina Assembly passed the FY2011 budget and Gov. Bev Perdue signed it into law on June 30, 2010. With the budget in place the day before the start of the new fiscal year, the state budget was done on time. Before FY 2011 , the last time the budget was passed on time in North Carolina was 2003.
On June 27, 2010, Democrats in the House and the Senate reached a deal on the $18.9 billion plan that reduced state spending by 3.3 percent less than the legislature expected to spend when it approved a two-year budget the previous summer. The House approved the spending plan by a vote of 66-50 and the Senate voted 28-15 in favor.
The state faced a deficit between $800 million and $1.2 billion on April 20, 2010, when Governor Bev Perdue introduced a $19 billion budget for FY2011. Perdue's budget included reductions of $410 million for the second year of a biennial budget she signed into law the previous summer. The state legislature began to consider the budget when it reconvened on May 12, 2010. Other aspects of her proposed budget included:
- replacing the in-home personal care services, which served elderly people who had trouble caring for themselves, with a new program for adults with the most intense needs, saving $59.8 million
- standardizing the rates prison inmate health care providers could charge, saving $20.5 million
No tax increases were a part of the Governor's proposed budget, although car and truck owners would see their annual state vehicle registrations rise to $35, an increase of $7, to pay for the new North Carolina Mobility Fund, which Perdue’s office hoped would one day reach $300 million. Leaders in the House and Senate said there was little chance the General Assembly would vote to raise sales or income taxes this year.
Lawmakers wrote the budget on the assumption that North Carolina would receive $512 million in federal Medicaid money, but in August, Congress voted to send the state only $343 million of the expected Medicaid money.
The governor and legislatures agreed in June 2010 to a supplemental budget should the state not receive the full $512 million in Medicaid funds, including cuts to Medicaid provider rates. In August, when the governor moved to enact those cuts and reduce Medicaid reimbursement by $26.6 million or 1.35%, doctors argued that Medicaid rates were already low and that reducing them further would force doctors to accept fewer Medicaid patients.
To create or maintain 20,000 jobs over the subsequent several years, the FY2011 budget provided more than $200 million for assistance to small businesses and infrastructure, including:
• $58 million to establish the North Carolina Mobility Fund that would relieve traffic congestion, improve logistic capabilities and create jobs around the state.
• $34 million in tax relief by establishing a 25 percent refundable tax credit against unemployment insurance contributions.
• Investments in the Main Street Solutions program and other small business assistance programs to grow home-grown businesses that create the bulk of new jobs.
Education saw the fewest cuts in the budget plan, even before Congress approved $298.5 million for teaching positions.
The three branches of North Carolina education - K-12 education, community colleges and the university system - accounted for 57% of the $19 billion state spending plan, and that figure did not include stimulus money.
The budget fully funded community colleges for enrollment growth. Higher education needed to make about $170 million in discretionary cuts. The budget used money from the state lottery to save hundreds of teacher jobs. It also allotted $10 million recurring funds for diagnostic assessment tools that would give teachers the ability to track individual students so they could keep students from falling behind.
College Sports Issue
Contentious budget negotiations in the legislature occurred over a controversial subsidy permitting the state's public universities and their booster clubs to pay the in-state tuition rate on scholarships for out-of-state athletes. The legislative budget deal ended those subsidies but protected a similar subsidy for academic scholarships to out-of-state students.
The budget also included the following provisions:
- Reduced spending by $20.5 million by linking inmate medical costs to the Medicaid fee schedule.
- Supplied increased funds for the State Ethics Commission and the State Board of Elections.
- $8.8 million for the Criminal Justice Law Enforcement Automated Data Services (CJLEADS) project that merged all criminal data records into one interactive and comprehensive system.
- $4.7 million to expand the VIPER system which ensured that first responders on the ground were adequately equipped to communicate with one another during emergency situations.
- Funding to begin to establish statewide capacity for law enforcement to collect DNA at the time of the arrest.
- Restoration of the $40 million community mental health reduction which occurred in 2009.
The FY2011 avoided many of the deepest cuts under consideration but The Charlotte Observer reported on June 30, 2010 that the deficit for FY2012 could top $3 billion.
Republicans said the budget spent too much in the midst of a deep recession and failed to prepare to avoid a potential $3 billion shortfall at the start of FY2012 when temporary tax increases expired and federal stimulus money dried up. State Treasurer Janet Cowell, a Democrat, said the state was "starting down a dangerous path" because off how little additional money was set aside to sustain the state employee pension fund - the legislature provided only half of what she said was needed. She said the year's deficit could mean lawmakers would need to set aside a whopping $1.2 billion for the public employee pension fund in 2011
North Carolina’s constitution requires that the budget enacted by the general assembly be balanced. In the second year of the biennium, the Office of State Budget and Management develops the governor’s recommended adjustments to the biennial budget. The governor releases a recommended budget every other year in February but still makes an annual update, usually in May. Once both the House and the Senate review and approve the document, then the bill was submitted to the governor for final approval.
In 2007, the legislature created the Program Evaluation Division, a watchdog group to examine state programs and their efficiency. It was one of the last state legislatures to create such a group. The Legislature or the division's 18-member bipartisan oversight committee determines what the division's 10 member staff, which was separate from the legislature's regular staff, would review. The Program Evaluation Division's recent report can be found online.
|Fiscal Year||General Funds Expenditures||% Change from Previous Year|
- See North Carolina state budget (2008-2009) for more details.
North Carolina Office of the State Auditor prepares and publishes audit reports as independent evaluations of the state's financial records and public program performance. Beth A. Wood was elected State Auditor in 2008. 
The Institute for Truth in Accounting (IFTA) rates North Carolina “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider North Carolina's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care. North Carolina's CAFRs were prepared and published online by the Office of State Controller.
Economic Stimulus Package
North Carolina was expected to receive $7.8 billion from the $787 billion dollar economic stimulus. All told, the federal stimulus plan would create or save 105,000 jobs in North Carolina, based on White House estimates.
Nine North Carolina projects were noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. One project gave North Carolina State University researchers $770,856 to research how video games can help improve mental health for the elderly. Wake Forest University was using $266,505 in stimulus funds to continue its annual science education workshops for reporters. The University of North Carolina at Charlotte received more than $750,000 in stimulus funds to help develop a computerized choreography program that its creators believe could lead to a YouTube-like “Dance Tube” online application
According to preliminary reports, North Carolina was expected to receive:
- $132 million for weatherization
- $917 million for Medicaid 2009
- $1.3 billion for Medicaid 2010/11
- $736 million for highways and bridges
- $14 million for Head Start
- $77 million for Title 1 (school improvement)
- $16 million for technical assistance
- $44 million for dislocated workers
- $11 million for employment service
- $83 million towards public housing
North Carolina became more transparent in 2009 after the launch of NC Open Book spending transparency site.
Prior to the launch of NC Open Book, the Office of the State Auditor established a searchable database that reports on private organizations receiving state funds. 
The following table was helpful in evaluating the level of transparency provided by a state spending and transparency database:
|State Database||Searchability||Grants||Contracts||Line Item Expenditures||Dept/Agency Budgets||Public Employee Salary|
|NC Open Book|
|Private Companies Receiving State Funds Site|
Limitations and Suggestions
NC Open Book did not list state employee salaries, nor did it provide line-item expenditures. A user name and password were required to view the Private Companies Receiving State Funds site.
Economic stimulus transparency
- North Carolina would receive approximately $634 million from the federal government under HR1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.
- North Carolina received an estimated $4,019,461,548 from the American Recovery and Reinvestment Plan of 2009. 
- North Carolina established an economic recovery website to show how legislators and government officials in North Carolina were spending Federal funds
- State Budget Solutions, North Carolina
- Model transparency legislation from the American Legislative Exchange Council was available at this link.
- John Locke Foundation
- John William Pope Civitas Institute
- Jesse Helms Center
- North Carolina Office of State Budget and Management
- North Carolina General Assembly site
- North Carolina Americans for Prosperity
- Charlotte Observer, North Carolina Government Salaries Database
- The Charlotte Observer "State budget saves 1,600 teacher jobs, cuts spending" June 29, 2010
- MyNC.com "Perdue Signs $19B State Budget Bill On Time" July 1, 2010
- State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
- North Carolina Office of State Budget and Management, Summary of Recommendations
- USA Spending, State Guesstimated* Government Spending
- FY2011 CAFR
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- The News & Observer "Perdue proposes $19 billion budget" April 20, 2010
- www.wral.com "NC governor rolls out changes for $19B budget" April 20, 2010
- The Greensboro News-Register "Budget, jobs top state's agenda" May 9, 2010
- The News Observer "Doctors bicker with Gov. Perdue over Medicaid reimbursement" Aug. 22, 2010
- The News & Observer "Perdue asks for backup budget" June 16, 2010
- The Charlotte Observer "Will federal schools money arrive too late?" Aug. 12, 2010
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- News14.com "State budget needs final vote, approval from governor" June 30, 2010
- The Charlotte Observer June 30, 2010
- North Carolina Office of State Budget and Management,"About the Budget," retrieved June 5, 2009
- Businessweek "3 years in, NC Legislature watchdog making a mark" August 9, 2010
- Program Evaluation Reports
- State of North Carolina,"Historical budget data," March 2009
- North Carolina Office of the State Auditor Web site, retrieved November 4, 2009
- audit reports
- Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- [ http://www.ncosc.net/index2.html North Carolina Office of State Controller Web site, retrieved November 4, 2009]
- State of Indiana, “State Credit Ratings-as of June 24, 2009"
- North Carolina Recovery,"Impact on North Carolina," retrieved June 3,2009
- American Recovery and Reinvestment Act,"Impact," retrieved June 3,2009
- "Summertime Blues, 100 stimulus projects that give taxpayers the blues" August 2010
- NC Open Book
- State Auditor searchable database
- Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
- H.R. 1586
- Wall Street Journal,"Stimulus Spending by State," April 23,2009
- North Carolina Economic Recovery
- Charlotte Observer State Employee Salary
- North Carolina Office of State Personnel