RALEIGH – Here’s a top-10 ranking for North Carolina that you’ll actually want to pay attention to. During the past decade, North Carolina ranked 8th in the nation in the rate of growth in state spending.
According to a new study from the American Legislative Exchange Council (, General Fund expenditures in the average state grew by 63 percent from 1990 to 2000. North Carolina’s growth rate was an even 100 percent – $13.9 billion in 2000 vs. $6.9 billion a decade before. (My own numbers differ somewhat from ALEC’s, but I’ll use theirs to ensure comparability across states.)
Our neighbors were no slouches in government bloat – Virginia spending grew by 98 percent, Georgia’s by 86 percent, and South Carolina’s by a comparatively low but still healthy 53 percent. You can’t explain this just by the need to keep up with population growth and inflation, since most states (including ours) far exceeded those rates of growth. Indeed, state spending actually outgrew personal income during the 1990s, meaning that, for all the talk about states cutting taxes, state government actually consumed more household and business income in 2000 than it did in 1990.
That’s why it is poppycock to blame current budget crises in North Carolina and other states on “excessive” tax cuts, as the news media and many politicians would like to do. The math doesn’t work out. North Carolina’s tax burden was hundreds of millions of dollars larger in 2000 than it was in 1990, because the tax cuts of the mid-1990s only partially offset the big tax increases of the early 1990s. The problem has been, and will continue to be, excessive spending.
The facts are clear. Former Gov. Jim Hunt was a spendthrift, as was the General Assembly during his tenure. Only in 1995 was there a serious effort to restrain state spending – those dastardly Republicans had just taken control of the North Carolina House and had not yet “grown in office” enough to embrace big spending hikes.
A massive government and yawning budget deficit were gifts that the outgoing governor gave to Mike Easley this year. Somehow, I don’t think the new governor wrote out a thank-you note.