North Carolina is Heavily Dependent on Federal Government Subsidies

North Carolina (much like other states) is heavily dependent on federal government subsidies. And with Congress’s inability to make cuts to the deficit, many programs that are funded by that behemoth on the Potomac River is about to get a rude awakening. The Newsobserserver.com published the potential losses of revenue to N.C. state budget:

If federal deficit-reduction cuts take effect, exemptions would include pay for active-duty military personnel, veterans' benefits, highway funds, Social Security, Medicare and Medicaid benefits and welfare payments. But a range of other defense and non-defense programs would be affected. Here are some of the estimated funding losses for North Carolina in 2013, the first year of the mandated cuts:

Defense contractors
$351 million

Medicare providers/doctors, hospitals
$333 million

K-12 Title 1 funds for poor schools
$40 million

K-12 special-education programs
$35 million

Public housing
$27 million


Supplemental food program (WIC)
$20 million

Head Start
$16 million

Low-income home energy assistance
$12 million


That doesn’t include the funding losses to universities and other suspect programs via direct grants.

Unfortunately, the biggest loser is our military. The one mandate that our federal government is constitutionally obligated to enforce is slated for the chopping block. This should be an awakening of how far the United States has fallen from a federalist system to a welfare state. And starting 2013, you’ll hear the howling of state legislators when their biggest source of revenue gets cut.

Sources: U.S. Census Bureau; National Governors Association; Federal Funds Information for States; N.C. State Officials, Center on Budget and Policy Priorities; Congressional Budget Office

Read more here: http://www.newsobserver.com/2012/01/09/1763710/lack-of-us-debt-deal-could-soon.html#storylink=cpy