Local Politics

Looming N.C. deficit among nation's largest

Posted July 28, 2010 12:33 p.m. EDT
Updated July 28, 2010 6:22 p.m. EDT

State budget

— North Carolina will face one of the largest state deficits in the country next year, according to a new report.

The National Conference of State Legislatures surveyed 35 states to get a picture of their fiscal health heading into the 2011-12 budget year. Thirty of the states are projecting deficits that total $72 billion.

North Carolina's deficit is already expected to be $3.2 billion next year, or more than 16 percent of its $19 billion operating budget. Lawmakers struggled to cut about $1.3 billion from the budget they passed last month.

The majority of the 2011-12 shortfall comes from the end of federal economic stimulus spending and $1.4 billion in temporary taxes, including a penny increase to the state's sale tax rate, that are scheduled to expire next June.

Only California, Connecticut, Minnesota, New York and Texas are projecting deeper 2011-12 budget holes than North Carolina in terms of total dollars, according to the report. When looking at the deficit as a percentage of the state budget, California, Connecticut, Hawaii, Minnesota, New York, Oregon and South Carolina are in more trouble than North Carolina, the report states.