State surplus spent

The Wall Street Journal Op-ed page commented today on the list of states with billion-dollar supluses in 2006. They were concerned that these states would spend the excess funds on new programs, leading to potential budget shortfalls similar to those experienced in recent years in the future.

Near the top of this list of winners is North Carolina with approximately $2 billion in unexpected income. What is the state doing with the money? Spending it ofcourse. As I pointed out not too long ago, UNC cashed in under the latest budget. The DTH reported on May 25:

The 2006-07 budget proposal put forward by the N.C. Senate on Tuesday would fully fund a host of major system priorities, including more than $79.2 million to support enrollment growth and almost $21.6 million for need-based financial aid…senators are backing a pay raise of 8 percent for system faculty during the next academic year and the promise of annual 6 percent increases in future years. The system’s Board of Governors had requested only 5 percent.

Instead of giving taxpayers some relief, the General Assembly gives UNC more than it asked for. Not more than it needs, more than it asked for. That’s pretty outrageous considering how budget requests work. Usually you don’t receive all that you ask for, so you request more than you need.

“Well, maybe this will put a halt to tuition increases,” the optimist might say. But the DTH editorial board aptly warned against this expectation last week:

But given the news that the UNC system doesn’t face state budget cuts for the first time in years, the University and the Board of Trustees are going to have to work really hard to rationalize any tuition increases this year.

Not that they won’t try. Tuition hikes at UNC have become more tradition than exception, leading to a sort of annual anti-birthday party where Chancellor James Moeser shows up and takes away students’ presents.

A somewhat tangential, but nevertheless irritating, facet of this issue is the helping hand the General Assembly gave athletics boosters at UNC system schools this year. A Charlotte Observer editorial offers some incite:

If you live in North Carolina, get ready to pay $5.2 million this fall so students from other states can play sports and study at our state universities.

Because out-of-state students on scholarship are now considered in-state students, $5.2 million will be paid by taxpayers and students not on scholarship, instead of by boosters. It seems criminal that taxpayers and students should be forced to cover the costs of organizations that are not part of the “public interest.” If a wealthy North Carolinian wants to donate to Carolina athletics, great. But don’t make people who are concerned about education, flip the bill.

These are just some things to consider the next time there is a budget “crisis” and professors and local politicians call for higher taxes or tuition: however high the tax or large the surplus, it will never be enough. Government has an insatiable appetite for money.

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