Comparing Budget Proposals

Even though Republicans control the state House, Senate and governor’s mansion, each of those bodies has a vision of how to build the state’s annual budget. 

More than half the money the state spends every year comes from the federal government. But when lawmakers talk about and negotiate a state budget deal, they are talking about the roughly $21 billion paid for by state-levied fees and taxes on things like income and sales.

State spending breaks down into roughly seven categories: education, health and human services, justice and public safety, natural and economic resources, general government, reserves and debt service and capital improvements.

Parties differ on education spending

Education makes up more than half of state spending every year, and marks the area where there are the greatest differences this year between legislative leaders and the governor.

You can see the different amounts each spending plan would put into the K-12, community college and university systems by clicking on the green bar in the graphic below.

As the chart demonstrates, legislative leaders and the governor are very close in the total amount they would spend. The biggest differences come in how they would spend the money.

With three plans in circulation, the negotiations begin on a final bill. Key legislative leaders will work out the details in a series of closed-door sessions before the full House and Senate are asked for an up-or-down vote.

Budget, tax reform will be finalized behind closed doors

The budget for the 2013-14 fiscal year will take effect on July 1.

Categories of spending

  • Education: Includes spending on K-12 public schools, community colleges and universities.
  • Health and Human Services: The bulk of HHS spending is for the Medicaid health insurance program for the poor, but also includes the North Carolina Pre-K program.
  • Justice and Public Safety: The program area includes funding for the courts, State Bureau of Investigation and agencies overseen by the Department of Crime Control and Public Safety such as the Highway Patrol and Division of Emergency management.
  • Natural and Economic Resources: This includes the Commerce Department as well as agencies such as the Department of Agriculture and grants to outside groups.
  • General Government: Includes funding for agencies such as the legislature, governor’s office and state auditor.
  • Reserves and Debt Service: This is money set aside to repay bonds as well as money needed to account for changes in state tax revenues brought on by things such as tax reform and money set aside for emergencies.
  • Capital Improvements: This is money spent to build and maintain state buildings.

The role of federal funding

By far, the most federal funding goes toward Medicaid. The state will spend roughly $5 billion in the health and human service program area. But taking into account federal dollars, the state will spend more than $17 billion on health care, the bulk of that on the Medicaid program, which insures the poor and disabled.

One important program area does not show up on this list.

Transportation spending is funded by both the federal government and special funds paid for through taxes on motor fuels and car purchases. Therefore, transportation items don’t show up in the general fund budget numbers, but the state will spend more than $5 billion building and maintaining roads next year.