Time for leaders to step up
RALEIGH — Newly elected Republican Gov. Pat McCrory and the newly reelected Republican legislature may have an ambitious agenda for dramatically cutting taxes or adding new programs. But there is a fiscal constraint on any such agenda: Past governors and legislatures didn’t pay for what they spent.
Like almost all states, North Carolina has a constitutional requirement that its budget be balanced. But the rule applies only to current expenses in the General Fund operating budget. It doesn’t constrain the issuance of debt for capital expense. It doesn’t account for depreciation. And it doesn’t apply to promises made during a fiscal year to pay employees in later years.
Essentially, the state’s fiscal rules operate on a cash basis. They don’t preclude the state from accruing liabilities to ...