ATLANTA - As North Carolina legislators begin this year's regular session, they face the enviable task of deciding how to spend a surplus of nearly $1 billion projected for the 1994 fiscal year.
But it is unlikely that there will be any any new bond authorizations coming out of the session, which began May 24, David Crotts, senior analyst and economist for the Legislative Fiscal Office, said yesterday.
"Because there is plenty of money this time around, the problem will be deciding how to spend it, and that could be time consuming," said Crotts. "As for the bonds, I think there will be a hiatus after last year's activity."
In 1993, North Carolina lawmakers authorized placing before voters a total of $750 million in new debt. The bonds were approved in a November referendum.
The lawmakers are thinking over how to spend the expected surplus a year after they appropriated $18.25 billion for the biennium beginning July 1, 1993.
Of the total, $9.23 billion was allocated for the 1994 fiscal year and $9.02 billion for fiscal 1995. Lawmakers traditionally meet in regular session the spring before the beginning of the second fiscal year of a biennium to fine-tune the appropriations originally decided a year earlier.
Crotts said that the projected surplus for fiscal 1994 totals $974.1 million "on paper," comprising $451.3 million of recurring spending and $522.8 million of nonrecurring spending.
However, $120 million must be immediately deducted, Crotts said, to cover restoration of a final pay-check for teachers in fiscal 1994. The state had deferred the payment to help balance its budget this year. In addition, he said, $116.7 million will be used to maintain the state's rainy day fund.
State budget officials say the recurring portion of the surplus comes from higher-than-expected tax collections due to an expanding state economy. Much of the nonrecurring money comes from a windfall in federal aid for treating poor patients at the state's four mental hospitals.
Gov. Jim Hunt has recommended that $924.1 million of the projected surplus be spent - all but $25.1 million of the recurring surplus and $24.9 of the nonrecurring surplus. Under Hunt's plan, most of the additional funds would be used to cover an average 5% salary increase for state workers and added cash outlays for schools, prisons, and local governments.
In a special session earlier this year, lawmakers appropriated $256.7 million for crime prevention. The funds included $26.9 from 1994 appropriations, $168.3 from recurring 1995 spending, and $61.5 million from nonrecurring $1995 spending.
Crotts said there is a "fair chance" that legislators could wrap up the budget by June 30, the end of the fiscal year. He said the Senate could come up with its spending plan this week, with the House passing its version next week, leaving more than two weeks for the chambers to work out their differences.
Last year, the regular session did not end until July 9. "This year, everybody seems a little more serious about getting out on time," Crotts said.
