Counties aren’t the only ones raising revenue beyond inflation, growth

Currently, in the halls of the General Assembly and in county seats around the state, a lot of attention is being paid to property taxes. After years of rising real estate prices, recent county revaluations caused exorbitant tax bills to property owners. Plenty of those owners, some seeing their tax bills double, made their frustration known with state lawmakers, leading to legislative hearings and calls for reform.

Indeed, a recent Carolina Journal Poll showed property tax is a household budget burden for more than three-quarters of North Carolinians. Nearly as many support a constitutional amendment to limit the rate at which counties can increase property taxes. Beyond the financial stress such tax spikes have on those with lower and fixed income — a compelling cause for concern on its own, regardless of the reasons — lawmakers have charged many county commissions with grabbing far more tax revenue than growth and inflation truly justify.

Joseph Harris, fiscal policy analyst at John Locke Foundation, authored an analysis of property tax revenue growth in the state’s most populous counties, showing several counties’ revenue growth far outpacing benchmarks based on inflation plus population growth alone. He calculated that in total over the last decade these counties’ tax collections exceeded inflation and growth by more than $2.5 billion, lending analytical backing to constituents’ anecdotal complaints.

Harris recommended a levy limit, restricting the pace of property tax increases to the aforementioned benchmark. Legislative leaders have smartly voiced support for such policy solutions, quickly moving to address an issue burdening so many people across the state.

In a press release last week, NC House Speaker Destin Hall, R-Caldwell, addressed levy limits, saying, “Property taxes are out of control. Families are getting ripped off as some, but by no means all, local governments rake in billions more than inflation and population growth warrant. It’s time for real reform, which is why the House is pursuing solutions like levy limits to stop runaway property tax hikes and protect North Carolina taxpayers.”

As Hall mentions, not all local governments are “raking it in” above and beyond the accepted growth factors; a few counties are collecting a fair bit less than the proposed levy limit would allow.

Still, the tendency for government to only ever get bigger, to grow revenues, to spend more of their residents’ earnings on ever more projects and services is about as well established as the law of gravity. For our state representatives to be so responsive, making an expeditious effort to address the burdens of over-taxing and overspending, something clearly plaguing so many North Carolinians, is a laudable initiative that deserves praise.

It also deserves a much wider application.

Counties like Wake and Cabarrus are hardly the only government entities raking in and spending billions more than inflation and population growth warrant; the time for real spending reform applies to state government too.

In a forthcoming report from John Locke Foundation highlighting facts about North Carolina’s budget and tax trends, analysts point out a statewide growth trend very similar to that currently garnering so much attention at the county level: North Carolina’s inflation-adjusted spending has exploded.

“But isn’t that just a reflection of a rapidly growing state? No,” asserts the report. “Compare that growth rate to the state’s population growth rate during that time of 82 percent. In short, inflation-adjusted spending has exploded at a rate more than two and a half times as fast as the population since 1983.”

That means state spending per person — even after adjusting for inflation — has ballooned by more than 70%! That’s nearly $1,000 more in spending for every man, woman, and child than in 1983 in real, inflation-adjusted terms. And it’s not slowing down: in just the last two years, thanks largely to state lawmakers’ decision to expand health care entitlements in North Carolina, spending on Medicaid has increased by 66%.

Meanwhile, in 2026, North Carolina is still operating on last biennium’s budget, after the House and Senate failed to reconcile budgetary differences last year, namely on issues of taxes and spending. One chamber wanted more aggressive tax cuts (and record high spending), while the other called for more fiscal caution, slowing tax cut triggers amid fears of unwelcome revenue pressures (and record high spending).

Yet, with the Fiscal Research Division of the General Assembly forecasting structural budget gaps and reduced revenues, not one leader in either chamber suggested balancing the budget equation by limiting future increases on the spending side of the ledger.

Admittedly, such revenue shortfall fears have proven overblown time and time again. Nevertheless, we see a state government subject to the same forces as the over-taxing local governments they’ve rightly focused on in recent weeks — gravitating toward ever more spending increases by default.

What is good for one, is good for all. I’d argue that state spending is out of control. That families and businesses are getting ripped off as the state rakes in and spends billions more than inflation and population growth warrant. And I would argue it’s time for real spending reforms that leverage smart policy to limit the growth of government while protecting taxpayers from funding an ever-growing yoke around their own necks.

The next biennial budget would be a great place to start.

“Counties aren’t the only ones raising revenue beyond inflation, growth” was originally published on www.carolinajournal.com.