State spending could be lowest in 40 years

With an anticipated $3.3 billion revenue shortfall next year, N.C. lawmakers could reduce state spending to the lowest level in 40 years.

So says a new study released today by the N.C. Justice Center's Budget & Tax Center. The Justice Center's Edwin McLenaghan said the study shows that a “cuts-only” approach - or even a majority-cuts approach - would drive state spending to the lowest level, as a share of state personal income, since 1972.

“Such historically low levels of state spending would cause severe harm to North Carolina’s vital public structures, just when people need state services most,” said McLenaghan.

Gov. Bev Perdue told state agencies earlier this month to begin developind budget plans for the next biennium with cuts of 5, 10, and 15 percent. This would add to the more than two years of severe spending cuts averaging nearly 10 percent.

Across-the-board cuts of 10 or 15 percent would drive state spending to its lowest level since 1972. Even cuts of 5 percent would put state spending lower than all years save one in the past 40 years.

“Protecting our critical investments in state services by reforming our tax system along with eliminating unjustified tax breaks and ineffective business incentives would help to ensure that the state has the healthy, well-educated and well-trained workforce necessary to pull North Carolina out of the recession,” said McLenaghan. “The alternative is fewer jobs and a blocked path to prosperity.”

You can find the report at: http://www.ncjustice.org/?q=node/605