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Financing the Future: <br /> Fiscal Modernization in North Carolina <br /> Dr. Roland Stephen <br /> January, 2008 <br /> The Institute for Emerging Issues Financing the Future <br /> • IEI is a think and do tank that turns ideas into action. <br /> • We help new combinations of leaders adopt innovative public policies to prepare North <br /> Carolina for its future. <br /> • Financing the Future is a program of work to modernize state and local finance. <br /> North Carolina's Future: <br /> Opportunities and Challenges <br /> North Carolina: A brilliant future, significant challenges: <br /> - Population Growth: Urbanization, Dependency Ratio <br /> - Spending Growth: Healthcare, K-12, Higher Education Roads, Infrastructure <br /> - Financial Modernization: Efficiency, Public-Private Partnership, Reform <br /> North Carolina in the Year 2030: <br /> The population of North Carolina is growing rapidly (chart) <br /> Yet population growth is not evenly distributed across the state (map). <br /> And the population is aging, especially in rural areas (chart) <br /> Major Expenditure Trends <br /> Medicaid expenditures have risen rapidly and will continue to rise as the population <br /> ages (chart) <br /> • The cost of higher education will rise. <br /> • The cost of new schools will be concentrated in rapidly growing urban areas. <br /> • 2.4 million new residential housing units by 2030. <br /> • $30-$60 billion financial gap for new infrastructure. <br /> North Carolina Revenue Outlook <br /> • General Fund availability was $1.3 billion this year. <br /> • But: majority of that excess non-recurring (or one time). <br /> • Future revenues will be slow growing and volatile. <br /> Hard Choices <br /> Modernization of state system of revenues has two elements: <br /> • Adopt sufficient, stable, fair and competitive system of revenues. <br /> • Review division of responsibilities between state and local government. <br />