North Carolina state budget (2009-2010)

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Fiscal Year 2010 State Budget

See also: Archived North Carolina state budgets

North Carolina faced a $1.7 billion budget deficit for FY 2010,[1] July 1, 2009-June 30, 2010. The state saw an historic 10.9 percent decline in tax revenue.[2] The original recommended appropriations for FY 2009 from the North Carolina Office of Management and Budget was $21.4 billion before multiple revisions and amendments as revenues declined.[3] The North Carolina General Assembly met for over six months (January 28-August 11)[4] and well past the start of the fiscal year to finally pass a balanced budget on August 5, 2009 and signed by Gov. Bev Perdue on August 7, 2009.[5]

Gov. Perdue issued an executive order on July 24, 2009 to severely restrict state appropriations for the interim until a budget was passed, which was replaced by another executive order on August 14, 2009 that "reduce monthly allotments by five percent of each state agency’s certified budget."[6] The final $19 billion FY 2010 budget ($20.7 billion with $1.69 billion in federal funds used to supplement state spending, especially in education and Medicaid) included:[7][8][9][10]

  • Nearly $2 billion in cuts
  • $1 billion in federal stimulus money
  • Almost $1 billion in higher taxes and fees including:[11]
    • 1-cent Statewide Sales Tax Increase; cost to Taxpayers: $803.5 million
    • Sales tax on online purchases, digital downloads of items like songs and movies may be subject to sales tax effective Jan. 1, 2010
    • Online sales made by referrals from N.C. website owners
    • Personal income surcharge; cost to Taxpayers: $172.8 million
    • 3 Percent Surcharge on Corporate Income; cost to Taxpayers: $23.1 million
    • Tobacco products excise tax increase to 45 cents a pack
    • Alcohol excise tax increases
  • 700 state job positions eliminated

The FY2010 budget appropriations included:[12][13]

Budget background

See also: North Carolina state budget

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 is submitted to the governor for final approval.[14]

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 is separate from the legislature's regular staff, will review.[15]Cite error: Closing </ref> missing for <ref> tag


Budget figures

Fiscal Year General Funds Expenditures  % Change from Previous Year
2000 $13,853,708,453[16] 6.9%[16]
2001 $13,445,510,386[16] -2.9%[16]
2002 $13,741,135,020[16] 2.2%[16]
2003 $13,855,522,493[16] 0.8%[16]
2004 $14,704,184,520[16] 6.1%[16]
2005 $15,798,359,545[16] 7.4%[16]
2006 $17,065,090,604[16] 8.0%[16]

Accounting principles

See also: North Carolina government accounting principles

TheNorth 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.[17][18]

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 does 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 does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[19] North Carolina's CAFRs are prepared and published online by the North Carolina Office of State Controller.[20][21]

Credit Rating Fitch Moody's S&P
North Carolina[22] AAA Aaa AAA

Economic Stimulus Package

North Carolina expected to receive $7.8 billion from the $787 billion dollar economic stimulus.[23] All told, the federal stimulus plan would create or save 105,000 jobs in North Carolina, based on White House estimates.[24]

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.[25] Wake Forest University is using $266,505 in stimulus funds to continue its annual science education workshops for reporters.[25] 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.[25]


North Carolina established a website to provide information on how the federal stimulus funds are being used in the state.[26]

According to preliminary reports, North Carolina was expected to receive:[23]

  • $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

Budget transparency

See also: Evaluation of North Carolina state website

North Carolina became more transparent in 2009 after the launch of the NC Open Book spending transparency site.[27]

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.[28]

Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
NC Open Book Y
600px-Yes check.png
Y
600px-Yes check.png
Y
600px-Yes check.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png
Private Companies Receiving State Funds Site Y
600px-Yes check.png
Y
600px-Yes check.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png

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, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[29][30]
  • North Carolina established an economic recovery website to show how legislators and government officials in North Carolina are spending Federal funds.[32]

Public employee salary information

Information about North Carolina's state employee salaries is available from the Charlotte Observer.[33] The Charlotte Observer obtained this information from the North Carolina Office of State Personnel.

See also

North Carolina state budget
North Carolina government sector lobbying
North Carolina public pensions
North Carolina state budget (2008-2009)

External links

Additional reading

References

  1. National Conference of State Legislatures, “State Budget Update: July 2009”
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  3. North Carolina Office of Management and Budget, "Budget and Legislative Update," October 15, 2008
  4. Associated Press, "NC General Assembly shuts down work for year in which recession, budget and taxes dominated," August 11, 2009
  5. National Conference of State Legislatures, "Fiscal Year 2010 Budget Status," October 13, 2009
  6. Gov. Perdue's Office, "EO 21: Reduce Monthly Budget Allotments for the 2009-10 Fiscal Year," August 14, 2009
  7. John W. Pope Civitas Institute, "North Carolina’s FY 2009-10 Budget: $1.1 Billion in New Taxes, Increases Year-Over-Year Spending by $400 Million," August 18, 2009
  8. Associated Press, "NC General Assembly shuts down work for year in which recession, budget and taxes dominated," August 11, 2009
  9. executive order on July 24, 2009
  10. executive order on August 14, 2009
  11. John W. Pope Civitas Institute, "North Carolina’s FY 2009-10 Budget: $1.1 Billion in New Taxes, Increases Year-Over-Year Spending by $400 Million," August 18, 2009
  12. North Carolina Legislature, "SESSION LAW 2009-451 SENATE BILL 202," August 7, 2009
    • 7.456 billion for the Department of Instruction
    • $999 million for the community college system
    • $2.7 billion University of North Carolina
    • $3.9 billion Health and Human Services
    The state made $500 million in cuts after the budget was passed, with cuts of $37.3 million to K-12 education, $202.5 million to higher education, $3.3 million to public assistance and $52.6 million to corrections.
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