‘Capitol Connection’ – State Budget Costs $44 Billion

As I wrote in last week’s column, the 2013 legislative session has officially come to an end. Over the course of several months, senators and representatives introduced countless proposals that have gone through the rigorous legislative process of committee meetings, public hearings and eventually a vote on the floor of the House and Senate. One of the most important proposals that came up for a vote last week was the next two-year state budget.

This week, I would like to provide you with an update about my concerns with the final bill. In summary, the $44 billion state budget increases spending by 8.8 percent, raises taxes by over $315 million, borrows over $1 billion for operating expenses, cuts over $500 million from hospitals and raids more than $557 million from other dedicated revenue sources.

Since 1992, the state budget has been limited by a constitutional spending cap that was put in place by voters following the introduction of the state income tax. In previous administrations, the spending cap has been temporarily exceeded under emergency circumstances or to spend surplus funds.

However, this year’s budget violates that process by exceeding the cap without a three-fifths vote of the legislature or the Governor’s declaration of an emergency. Instead, it relies on a series of gimmicks to comply with spending cap requirements.

In addition to the spending increase, the budget also includes new tax increases, including the gas tax, the electric generation tax, the corporate tax surcharge and the insurance premiums tax. These taxes stand to raise an additional $315.9 million from families and businesses over the next two years.

During these tough economic times, we should not be increasing taxes on families or businesses. Unfortunately, this budget includes a three to five cent tax increase per gallon of gasoline that will begin on July 1st. With more and more people living paycheck to paycheck, this tax increase will impact jobs, travel and tourism throughout our state.

Other than spending and taxation, the budget also cuts over $500 million from hospitals around our state, including $6 million from Charlotte Hungerford Hospital. It also borrows over $1 billion for operating expenses and raids $557.9 million from dedicated accounts and one-time sources. For example, over $109 million will be transferred from the Special Transportation Fund. This fund was intended to be used solely for transportation purposes, including the maintenance of our roads and bridges. The fund receives its revenue in part from gasoline taxes.

After reviewing the majority party budget, I could not support the increased spending, higher taxes and borrowing for operating expenses. During these challenging economic times, we should not be increasing taxes on families, make devastating cuts to hospitals or pass the burden on to future generations. Instead, we should be focused on reducing the burden on families and businesses and putting our residents back to work. In the coming years, I am hopeful that the legislature will seriously focus how best to make our state a better place to live, work and raise a family. After seven hours of debate, the budget passed by a vote of 19-17 in the State Senate.