State lawmakers recommit to failed austerity despite ongoing pandemic, documented hardship

For months, the state’s legislative leaders have been negotiating the fate of North Carolinians and our shared future behind closed doors as they decide on a total spending figure for the biennial state budget.

Yesterday, they reached a decision to maintain their status quo approach, despite unprecedented hardship for North Carolinians. The arbitrary spending amount announced by House and Senate leaders — $25.7 billion in 2021-2022 and $26.7 billion in 2022-2023 — will continue the now decade-long trend of austerity budgeting in which state infrastructure, services, and publicly supported programs cannot adequately respond to long-term challenges or meet the needs of a growing state.

The recent practice of “pre-conferencing” proposed spending levels across the chambers is not a requirement of the process. It is a symptom of larger dysfunction that has plagued North Carolina’s state budget process. The tradition of backward budgeting doesn’t serve our state’s best interests. In backward budgeting, chambers agree on an arbitrary spending cap, often prioritizing tax cuts for the wealthy and profitable corporations, and then dollars are allocated based on what remains.  Our leaders set North Carolinians up for failure before the state budget process has even begun in the public realm.

Investments in the public services and programs reach all communities and all North Carolinians. The state budget is the best, most effective mechanism to level the playing field and ensure that every household and every community has the opportunity to do well. Yet the proposed budget amount would leave North Carolina roughly $7 billion short of the state’s historical average as a share of our state’s total personal income. (See chart above: It would take $7 billion to bring the orange bars up to the dotted blue line representing the 45-year average.)

Have the last 15 months of the COVID-19 pandemic taught us nothing?

Though far from a perfect approach, the General Assembly was quick to dedicate federal COVID-19 relief dollars over the past year. The General Assembly should now move quickly to invest more dollars in an adequate response to ensure that the COVID-19 recovery reaches every person and every community in our state. We have the state resources to do our part, in addition to utilizing federal resources. The state’s cash balance — dollars available to be put to use right now — can be tapped to bring North Carolina back to the historic level of public investments. With an unprecedented unreserved cash balance exceeding $7 billion, or nearly one-third of current state spending, returning taxpayer dollars through the provision of government services and programs via the state budget is simply the right thing to do.

Legislative leaders cannot pat themselves on the back for responsible budgeting while North Carolinians struggle to put food on the table and keep a roof over their heads as they futilely await support from their elected leaders.

Doubling down on austerity budgets in the face of demonstrated hardship won’t put us on the pathway to a brighter future if needs go unmet, including challenges to provide affordable and safe housing, health care services in every community, public health infrastructure, and supports to children and families.

It’s time that leaders in the General Assembly abandon their commitment to underinvestment that has harmed North Carolinians for too long. Instead, let’s change course and steer our state toward a prosperous future where our collective resources sustain well-being for all.

Suzy Khachaturyan is a Policy Analyst at the Budget & Tax Center, a project of the NC Justice Center.