The political insiders in Raleigh are up in arms about the prospect of “massive” budget cuts this year, given the possibility that this year’s billion-dollar budget deficit may well be followed by a similar or even larger gap in the fiscal year beginning July 1.
OK, I know that the chattering class needs something to chatter about, and that many of the chatterers are themselves state employees and thus unduly fascinated with the prospect of layoffs. But out here in the real world, the state budget doesn’t exactly look like it is on the fiscal equivalent of a hunger strike.
We’ve had nearly a decade in which state spending grew by an average of 6 percent to 7 percent a year. This was far faster than spending needed to grow to keep up with a growing population and rising prices. It reflected a decision to make North Carolina government a much bigger institution than it was in the early 1990s, and to do so without making any provisions for paying the bill once the supercharged economy slowed down a bit.
In the spirit of a picture being worth a thousand words, the graph below shows the size of the state’s General Fund budget from FY 1991-92 to FY 2001-02 – that latter having been adjusted downward to include the “massive” budget cuts the administration and legislature have already imposed. Basically, the budget nearly doubled, from $7.8 billion to $14 billion.
See what I mean? Looks more like a budgetary Richard Simmons than Kate Moss. Time to go on a real diet.