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North Carolina state budget and finances

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North Carolina budget and finances
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General information
Budget calendar:
Biennial
Fiscal year:
2015
State credit rating:
AAA (as of 2014)
Current governor:
Pat McCrory
Financial figures
Total spending (state and federal funds):
$43.8 billion (estimated for 2014)
Per capita spending:
$4,409.31 (estimated for 2014)
Total state tax collections:
$23.8 billion (2013)
Per capita tax collections:
$2,413.32 (2013)
State debt:
$107.6 billion (as of 2014)
Per capita state debt:
$11,032 (as of 2014)
State budgets and finances
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Total state expendituresState debtTax policy in North Carolina
Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.

Between fiscal years 2013 and 2014, total government spending in North Carolina increased by approximately $972 million, from $42.9 billion in fiscal year 2013 to an estimated $43.8 billion in 2014. This represents a 2.3 percent increase. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned North Carolina a credit rating of AAA.[1][2][3]

In fiscal year 2014, estimated total government spending in North Carolina equaled $43.8 billion, ranking 13th highest in the nation.

Spending

Definitions

The information below comes from the National Association of State Budget Officers (NASBO). These spending figures are broken into three broad categories in order to facilitate comparison between the states.[3]

  • State funds: State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
  • Federal funds: Federal funds are "funds received directly from the federal government."
  • Total spending: Total spending is calculated by adding together the totals for state and federal funds.

These figures exclude spending from the sale of bonds.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[3]

North Carolina spent an estimated $43.8 billion in fiscal year 2014.

Total estimated state spending, FY 2014 ($ in millions)
State State funds Federal funds Total spending Population Per capita spending
North Carolina $30,996 $12,850 $43,846 9,943,964 $4,409.31
Georgia $29,545 $11,834 $41,379 10,097,343 $4,098.01
South Carolina $14,445 $6,993 $21,438 4,832,482 $4,436.23
Tennessee $18,832 $13,231 $32,063 6,549,352 $4,895.60
Virginia $35,123 $9,568 $44,691 8,326,289 $5,367.46
Per capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census estimates.[4]
Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures
Breakdown of spending by function in FY 2013
Source: National Association of State Budget Officers

State spending in North Carolina can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.[3]

About 30 percent of North Carolina's total expenditures went towards Medicaid in fiscal year 2013.

State spending by function as a percent of total expenditures, FY 2013
State K-12 education Higher education Public assistance Medicaid Corrections Trans-
portation
Other
North Carolina 24.8% 12.4% 0.5% 30% 4.6% 10.7% 17%
Georgia 24.1% 19% 0.1% 21.3% 3.7% 5.7% 26.2%
South Carolina 17.6% 19.5% 0.4% 22% 2.7% 5.4% 32.4%
Tennessee 17.8% 13.9% 0.4% 30.8% 2.8% 6.1% 28.2%
Virginia 15.1% 15.3% 0.4% 16.7% 2.8% 11% 38.7%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Spending trends

Spending on K-12 education fluctuated each year between 2009 and 2013, rising from 22.5 percent in 2009 to 24.8 percent in 2013. This overall rise occurred despite a drop to 18.3 percent in 2011. See the table below for further details (figures are rendered as percentages, indicating the share of the total budget spent per category).[3][5][6][7][8]

Spending by function from 2009 to 2013 (as percentages)
Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
2013 24.8% 12.4% 0.5% 30% 4.6% 10.7% 17%
2012 23.2% 9.0% 0.5% 24.7% 4.2% 9.9% 28.4%
2011 18.3% 12.5% 0.5% 22.1% 2.8% 8.7% 35.1%
2010 19.3% 12.4% 0.5% 24.2% 2.9% 7.1% 33.5%
2009 22.5% 13.5% 0.6% 24.9% 3.6% 8.8% 26.1%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "Population" and "Per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "Population" and "Per capita revenue" have not been abbreviated.[9]

The largest single source of tax collections in North Carolina during fiscal year 2013 was individual income taxes, which accounted for approximately $11.1 billion of total tax collections.

State tax collections by source ($ in thousands)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes Total 2013 population Per capita collections
North Carolina N/A $9,714,217 $1,543,201 $11,068,166 $1,285,907 $157,087 $23,768,578 9,848,917 $2,413.32
Georgia $61,052 $7,408,422 $744,401 $8,772,227 $797,255 $10,795 $17,794,152 9,994,759 $1,780.35
South Carolina $8,549 $4,476,982 $439,843 $3,357,518 $386,669 $51,744 $8,721,305 4,771,929 $1,827.63
Tennessee N/A $9,128,175 $1,421,174 $262,842 $1,256,173 $298,527 $12,366,891 6,497,269 $1,903.40
Virginia $33,188 $6,192,666 $806,572 $10,900,860 $772,001 $481,566 $19,186,853 8,270,345 $2,319.96
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
North Carolina tax collections by source in 2013
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. Almost 90 percent of North Carolina's total state tax collections came from a combination of sales taxes and gross receipts and individual income taxes.[9]

State tax collections by source (as percentages)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes
North Carolina N/A 40.87% 6.49% 46.57% 5.41% 0.66%
Georgia 0.34% 41.63% 4.18% 49.30% 4.48% 0.06%
South Carolina 0.10% 51.33% 5.04% 38.50% 4.43% 0.59%
Tennessee N/A 73.81% 11.49% 2.13% 10.16% 2.41%
Virginia 0.17% 32.28% 4.20% 56.81% 4.02% 2.51%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Current fiscal year budget

See also: Historic North Carolina budget and finance information

Fiscal years 2014 and 2015

DocumentIcon.jpg See budget bill: Senate Bill 402

North Carolina state budget -- 2014
North Carolina State Legislature
Text:Senate Bill 402
Legislative history
Introduced:March 25, 2013
House:June 13, 2013
Vote (lower house):77-40
Senate:May 23, 2013
Vote (upper house):33-17
Governor:Pat McCrory
Signed:July 26, 2013

The 2014-2015 biennial budget was signed into law by Governor Pat McCrory on July 26, 2013.[10] A copy of the full appropriations bill can be found here.

McCrory announced a budget adjustment proposal on May 14, 2014. McCrory's proposal can be accessed here.[11]

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, North Carolina had a state debt of approximately $107.6 billion. Its state debt per capita was $11,032. The report revealed that state governments faced a combined $5.1 trillion in debt. The obligation amounted to $16,178 per capita in the nation.[12]

Total state debt, 2014
State Total state debt State debt per capita Per capita debt ranking
North Carolina $107,580,297,000 $11,032 42
Georgia $115,193,862,000 $11,612 39
South Carolina $71,105,557,000 $15,053 23
Tennessee $41,049,738,000 $6,358 50
Virginia $91,339,102,000 $11,158 41
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: North Carolina public pensions and North Carolina public employee salaries

A 2012 report from the Pew Center on the States noted that North Carolina's pension system was funded at 96 percent at the close of fiscal year 2010, well above the 80 percent funding level experts recommend. Consequently, Pew designated the state's pension system as a "solid performer."[13]

The funding ratio for the state's pension system decreased from 104.47 percent in fiscal year 2006 to 95.26 percent in fiscal year 2011, a drop of 9.21 percentage points, or 8.8 percent. Likewise, unfunded liabilities increased from a nearly $3 billion surplus in fiscal year 2006 to more than $3.8 billion in fiscal year 2011.

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.[14][15]

The table below lists the Standard and Poor's credit ratings for North Carolina and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[16]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
North Carolina AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
Georgia AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
South Carolina AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AAA
Tennessee AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA AA
Virginia AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to the state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[17]

The table below notes what share of North Carolina’s general revenues came from the federal government in 2012. That year, North Carolina received approximately $15.2 billion in federal aid, 33.2 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.[17]

Federal aid to state budgets, 2012
State Total federal aid ($ in thousands) Federal aid as a % of general revenue Ranking
North Carolina $15,192,577 33.24% 25
Georgia $13,794,726 37.92% 7
South Carolina $6,892,660 32.41% 28
Tennessee $11,198,575 40.97% 3
Virginia $9,278,113 23.53% 49
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, North Carolina received $6.26 billion in federal funding from the American Recovery and Reinvestment Act between February 2009 and June 2013.[18]

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[19][20]

  1. Budget instruction guidelines are sent to state agencies in July.
  2. State agency budget requests are submitted in October.
  3. Agency hearings are held in October and December.
  4. The governor submits his or her proposed budget to the North Carolina State Legislature in early February.
  5. The legislature adopts a budget in June. A simply majority is required to pass a budget.
  6. The biennial budget cycle begins in July.

North Carolina is one of only six states in which the governor cannot exercise line item veto authority.[20]

The governor is constitutionally and statutorily required to submit a balanced budget. In turn, the legislature is required by statute to pass a balanced budget.[20]

Agencies, offices and committees

The North Carolina Auditor prepares and publishes audit reports as independent evaluations of the state's financial records and public program performance.

  1. Appropriations Committee, North Carolina House of Representatives
  2. Appropriations on Agriculture and Natural and Economic Resources Committee, North Carolina House of Representatives
  3. Appropriations on Capital Committee, North Carolina House of Representatives
  4. Appropriations on Department of Transportation Committee, North Carolina State Senate
  5. Appropriations on Education Committee, North Carolina House of Representatives
  6. Appropriations on Education/Higher Education Committee, North Carolina State Senate
  7. Appropriations on General Government and Information Technology Committee, North Carolina State Senate
  8. Appropriations on General Government Committee, North Carolina House of Representatives
  9. Appropriations on Health and Human Services Committee, North Carolina House of Representatives
  10. Appropriations on Health and Human Services Committee, North Carolina State Senate
  11. Appropriations on Information Technology Committee, North Carolina House of Representatives
  12. Appropriations on Justice and Public Safety Committee, North Carolina House of Representatives
  13. Appropriations on Justice and Public Safety Committee, North Carolina State Senate
  14. Appropriations on Natural and Economic Resources Committee, North Carolina State Senate
  15. Appropriations on Transportation Committee, North Carolina House of Representatives
  16. Finance Committee, North Carolina House of Representatives
  17. Finance Committee, North Carolina State Senate
  18. Ways & Means Committee, North Carolina State Senate

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[21] According to the report, North Carolina received a grade of B+ and a numerical score of 88.5, indicating that North Carolina was an "advancing" state in terms of transparency regarding state spending.[21]

Budget and finance ballot measures

Voting on
state and local
government budgets,
spending and finance
State finance.jpg
Policy
Budget policy
Ballot measures
By state
By year
Not on ballot
See also: State and local government budgets, spending and finance on the ballot and List of North Carolina ballot measures

Ballotpedia has tracked no ballot measures relating to state and local budget and finance matters in North Carolina

Recent news

This section displays the most recent stories in a Google news search for the terms "North Carolina budget."

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North Carolina state budget and finances - Google News Feed

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Contact information

Office of State Budget and Management
116 West Jones Street
Raleigh, NC 27603-8005
Telephone: 919-807-4700
http://www.osbm.state.nc.us/

See also

External links

Additional reading

References

  1. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  2. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 National Association of State Budget Officers, "State Expenditure Report: 2012-2014," accessed February 18, 2015
  4. United States Census Bureau, "State and County QuickFacts," accessed February 23, 2014
  5. National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  6. National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  7. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  8. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  9. 9.0 9.1 Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
  10. Open States, "North Carolina Senate Bill 402," accessed April 30, 2014
  11. National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  12. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  13. Pew Center on the States, "Widening Gap Update: North Carolina," June 18, 2012
  14. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  15. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  16. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  17. 17.0 17.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  18. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  19. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  20. 20.0 20.1 20.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  21. 21.0 21.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014