Spending Outside The General Fund | Eastern North Carolina Now

    Publisher's note: The author of this post is Sarah Curry, who is Director of Fiscal Policy Studies for the John Locke Foundation.

    How much does North Carolina's government spend? A simple question, but unfortunately there's not a simple answer.

    North Carolina's budget has multiple components: the General Fund, the Highway Funds, federal grants and non-General Fund. Altogether the state spends approximately $51 billion each year on government functions. When the governor released his budget for the 2015-2017 biennium, he focused on the General Fund and Transportation, but there is a noteworthy amount of money that is spent outside of those two areas. If you read through the governor's budget, he specifies his spending plan for the roughly $22 billion General Fund. That leaves more than half of government money spent in the state out of the limelight.


    Transportation is a great example of how things get left out of the discussion. The two major components of the Department of Transportation are the Highway Fund and Highway Trust fund. In his most recent budget proposal, the governor does outline his spending plans for these two funds, but that only accounts for a small part of Transportation spending. A lot of the transportation money comes from federal grants. Other significant expenditures in transportation include the State Ports Authority and the NC Global Transpark Authority, which are funded through a hybrid of state, local, and federal dollars.

    The dollars I want to focus on are not federal, or transportation dollars, but are overlooked precious state tax-dollars that are spent outside the General Fund without much debate or transparency. The area of government where the majority of these functions is found is Natural and Economic Resources. For example, the Employment Security Commission, the Banking, Cemetery, Industrial, and Utilities commissions, the Alcohol Beverage Control or ABC system, Air Quality programs, and Waste Management are all paid for with non-General Fund dollars.

    Some might not think those are significant government programs, but how about Education? For the past few years many have argued and started media campaigns about the amount of spending the state has put towards education, both public K-12 schools and higher education. There are dollars being left out of those discussions as well. Last year, North Carolina spent nearly $36 million on education outside of the General Fund, the majority going to public K-12 education in budget items such as school bus replacement and to the community college system in the form of IT support and projects. While there isn't a state budget impact, it's worth noting the over $1 billion UNC Hospitals system is also a non-General Fund expenditure. The hospitals pay for themselves with federal grants and hospital fees, but this is another example of a significant portion of state government that operates outside of the General Fund.

    Overall, the state budget is a lot more than gets discussed each year. Lawmakers should think about moving these budget items within the General Fund. It would promote transparency and give citizens a better grasp of exactly how large their state budget really is. If we are going to discuss the amount of money spent in government, we should look at the whole picture. As long as 59 percent of the state's expenditures remain outside the General Fund, we cannot have a comprehensive discussion about the state's budget or spending priorities.