State Budget Plan Spends Too Much, Ignores Fiscal Realities

Budget Called “Irresponsible and Unimaginative”

Raleigh, N.C. – Over the weekend, Democratic leaders in the N.C. House and Senate reached a compromise on a budget plan for state government.  The budget compromise plan reportedly contains just $34 million in tax breaks for small businesses.  This is a small fraction of $19 billion in state spending authorized by the plan—a figure that does not include an additional $1.6 billion in federal stimulus money that will be used to cover many recurring state obligations.  The $34 million in tax breaks for small businesses is also less than what was in the Governor’s original plan, the House plan, or the Senate plan.  Democratic leaders also have a contingency plan in place in the event that an additional $500 million in federal Medicaid money is not sent to the state.  That plan calls for a one percent cut to state spending and the raiding of various reserve funds.  According to current estimates, North Carolina is facing a $3 billion shortfall in the state budget for next year.

Senate Republican Leader Phil Berger (R-Rockingham) said, “Based on the decisions made by Democratic leaders, it is now clear this is not a jobs first budget but a jobs last budget.  $34 million in tax breaks for small businesses is a slap in the face to the working families and business owners who drive our state’s economy.  This budget is irresponsible and unimaginative.  It spends too much and ignores long-term fiscal realities.”

“The conference committee should be reprimanded for dropping all Republican House floor amendments without reason,” said House Republican Leader Paul Stam (R-Wake).

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