Budget director discusses spending
By Steve Herring
Published in News on August 3, 2016 1:46 PM
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Andrew Heath
N.C. Budget Director Andrew Heath boils the state's $22.3 billion budget in smaller chunks when he talks about the state's economic outlook and budget overview.
Those chunks being fiscal responsibility, a tax cut for the middle class, higher teacher pay, college affordability and money to expand mental health and substance abuse are what state.
Heath is traveling across the state talking about the recently approved budget and the economic outlook in general as his boss, Republican Gov. Pat McCrory, prepares for his Nov. 8 election showdown with Democratic state Attorney General Roy Cooper.
But for the most part Heath stays away from politics, talking instead about an optimistic view of the state's economy and potential future growth.
His mission, he said, is to let taxpayers know how their money is being spent.
Heath's budget stump made stops in Goldsboro, New Bern and Jacksonville on Monday.
"While the economic rebound is hard to argue against there is a concern that we are sort of following a national trend of urban areas seeing a lot of that growth," Heath said. "So what I have tried to tell folks is that the governor has tried to do some things that affect everyone in the state -- makes all the boats rise."
Thanks to the Connect NC Bond for example, at least 70 counties will see projects including the Cliffs of the Neuse State Park and Wayne Community College, Heath said.
Unemployment is down in all 100 counties and "pretty aggressive tax reductions" went to all North Carolina residents, he said.
There is also $1 million in the budget for continued land acquisition to buffer around the state's military bases. He did not have specifics for Seymour Johnson Air Force Base.
Heath said the public can also expect to see continued expansion for mental health/substance abuse issues for treatment as a medical problem rather than a criminal problem.
For the average person the increase in the standard deduction means there is no tax on the first $15,500 no tax.
"And it is going up to $17,500," he said. "So $2,000 more of income, there is no tax on it."
That means some 75,000 residents will pay no tax all, he said.
"No one is going to get rich from these tax reforms, but when we are low on the margin, every little bit helps. Even when you factor in the (expanded) sales tax people are going to fare better on the whole," Heath said.
Those issues are hallmarks of the budget as well as fiscal integrity, he said.
"People should know that we are trying to be responsible with the state's money," Heath said. "When I say fiscal integrity, we placed a spending cap so that we had measured growth. Our state budget was going to grow, you weren't going to see a budget cut because our economy is growing and our state as a whole is growing. We get about 285 people a day increase in our population."
The state boasts one of the fastest growths in tax revenue in the nation, he said.
"So you are going to see spending increase," he said. "We just want to make sure we control that spending. The urge, especially in an election year, would be to spread that money all over the state and make everybody happy. So we showed some fiscal restraint there.
"Overall spending is up about 2.8 percent. With recurring money about 2.3 percent. We made a huge investment of about $470 million into the rainy day fund total to $1.6 billion roughly, the highest it has ever been."
Another $88 million was set aside for repairs and renovations to state facilities.
In recent years teacher pay went from 21st to about 47th or 48th in the nation, he said
"A lot of that blame gets put on the great recession," Heath said.
He also blames some of that on the state not having adequate reserves to tap into to met its obligations.
"Instead we had to freeze teacher pay so teachers didn't move along their pay schedule," Heath said. "We had to reach into textbook funding and other educational related operating accounts. At the same time taxes went up so it was like double whammy for the teachers.
"When you have healthy reserves, and I think we should increase it even further, when we do eventually face that economic downturn that is inevitable at some point, you won't have as hard a time coping with it."
When Heath took over in February the state had a$270 million surplus.
Heath said he was very pleased the state was able to invest so much in teacher pay -- to get where the average teacher pay would be above $50,000 for the first time in state history.
The total is closer to $68,000 when the benefit package is included, he said.
Another area in education is trying to make college affordable, he said.
Western Carolina University, UNC-Pembroke and Elizabeth City State University offer tuition capped at $500 per semester.
Early concerns by some of the alumni about the caps were based on some distrust that the state would not fully fund the schools thereby costing them money, Heath said.
The state did live up to its responsibilities to fully fund them, he said.
Also whatever tuition a student pays as an entering freshman remains the same through all four years or five years while enrolled, he said. Fee increases were capped at 3 percent.
Taken together, those allow for affordability and an ability to plan, Heath said.
"I tell people it (budget) is like the Golden Gate Bridge," Heath said. "As soon as you get through painting it, you start over at the beginning, and start painting it again. This budget we had a lot of availability which is driven by either higher-than-anticipated revenue or lower-than-anticipated spending which we also had. So we had a lot more availability I think this time around than I will imagine we will have next time around.
"So I think that you will see continued limited expansion. What areas expansion will tend to be in I think would continue to be in education. There was intent language in the budget that set a goal of $55,000 average teacher pay. So I think you will see more investment into teacher pay."