ELLIOT: Half a billion to the good

“Many cities and many states still are in a fragile position,” Terry McAuliffe said recently about states’ balance sheets. The governor of Virginia, a Democrat, certainly was not talking about North Carolina. Here, revenues are coming in so hot they need a drag chute before they land in the treasury.But McAuliffe is right about Virginia. The Old Dominion was one of 25 states that dealt with budget deficits in fiscal year 2016. And Virginia, along with 23 other states, is dealing with projected budget deficits for this year too, according to the National Association of State Budget Officers. Apparently, most of the states believed the spin that the nation’s economy was on solid footing and poised for a breakout. (Also, Brexit is certain to be voted down, and Hillary Clinton will easily win the presidential election.)Consider the situation regionally. Tennessee, South Carolina, and North Carolina all had surpluses in 2016. And all are meeting revenue targets for 2017 except North Carolina, whose cup overfloweth.What else do those states have in common? They all had conservatives in charge of budgeting. The Carolinas and Tennessee all had a “Republican trifecta” in charge — House, Senate, and governor —when these budgets were passed. (Georgia was unable to report revenue projections to NASBO.)So how good is North Carolina’s projected surplus, one of only four in the nation? The consensus report of the legislature’s nonpartisan fiscal research staff and the governor’s Office of State Budget and Management summarized that revenue should “be above the budgeted amount by $552.5 million (up 2.5 percent) and that stable, modest growth will occur during the next biennium.”The anticipated revenue surplus,” the report continued, “is predominately the result of stronger-than-expected wage growth increasing both personal income tax and sales tax collections.”Assuming the surplus continues until June 30 — and at half a billion, it would take something catastrophic for it to disappear entirely — conservatives in full control in Raleigh will have delivered budget surpluses for three straight fiscal years.And lest anyone think that surpluses are a result of “slashing” budgets or “gutting” government services — some favorite scare words the news media uses — note that the overall budget has grown every year, from $21.2 billion in 2015, to $21.7 billion in 2016, to $22.3 billion this fiscal year.When the GOP gained control of the General Assembly, liberals cried foul when legislators held to what the tax-and-spenders considered recession-era “austerity” budget levels. Predictably, they called for more and more spending. Some even specifically mentioned that plenty of Republican-controlled states were loosening up their belts. And while there were moves in Raleigh to open the gates, thankfully leadership held firm.The Tarheel State now enjoys a combination of steady economic growth, real personal income growth that is outpacing the nation, and tax rates that are competitive with our neighbors. Thanksto state leadership standing tall in Raleigh, the state is now standing tall among the union.
Drew Elliot is a member of the North State Journal’s editorial board, separate from the news staff. Unlike other newspapers, the North State Journal does not publish unsigned editorials; the author or authors of every editorial, letter, op-ed, and column is prominently displayed. To submit a letter or op-ed, see our submission guidelines.