NC Budget and Tax Center

Budget won’t create jobs anytime soon, too busy eliminating them

BTC recently released a report examining the economic consequences of the “whole budget”—taking into account both the plan’s $2.6 billion in spending cuts and its $1.6 billion in tax changes in FY2012-13—for all seven regions across the state. This blog post is one in a series detailing the results of this analysis.

Ahead of the arrival of Hurricane Irene, the Budget and Tax Center released an analysis of the economic and employment impacts of the budget, both spending and tax cuts. Ahead of that very real and damaging storm, these budget decisions were already playing out in communities across the state and wreaking damage of their own—critical services cut off, waiting lists expanded and job losses. As the damage mounts, the promise of the new leadership that the budget would be a job creator is being called into question. The BTC’s own analysis demonstrates that the budget will destroy more jobs than it creates in every region of the state.

It is therefore with good reason that we should all question the claims of the legislative leadership and ask for a concrete accounting for how this explosion of private sector jobs will occur—and more importantly, how long until they materialize. This weekend editorials in the Fayetteville Observer and the Charlotte Observer (the paper of record in Speaker Tillis’s home town) have done just that, stating:

No realist expected any of this [tax-cut spawned job creation] to come about overnight. But Berger and Stam got the budget they wanted, fended off opposition and proclaimed the finished product good. They now owe all North Carolinians plausible assurance that the numbers, especially regarding jobs, aren’t running off in the opposite direction.

<snip>

An effective rebuttal requires no less than reversing the analysis: brisk new private-sector job growth offsetting public-sector losses. Not immediately, but soon.

The answers that we are likely to get will not be good. Unlike the UNC report touted by legislative leaders—which analyzed the tax cut package without attention to the spending cuts—the BTC report takes into account the economic impacts of both the spending cuts and the tax cut package . This “whole-budget” analysis finds that the recently enacted budget will eliminate thousands of public and private sector jobs across every region in the state—the result of deep spending cuts that take more money of each region’s economy than is put back in through tax cuts. In some cases, job losses from spending cuts will outnumber supposed gains from tax cuts by 4 to 1.

There is no doubt that North Carolina will need brisk new private-sector job growth and soon. But it is unclear how more out-of-work people and fewer dollars being spent in communities and engaging private business will spur the private-sector to act and create jobs. We can’t wait any longer for that to happen—and policymakers must focus on fiscal decisions that can close not grow the jobs deficit in North Carolina.

3 Comments


  1. david esmay

    September 1, 2011 at 3:51 pm

    Tillis and Berger will lead this state into oblivion, in fact I’d like to name their economic policy “THE OBLIVION MODEL”. Its shorter than ,THE I CAN’T FIND MY OWN ASS WITH TWO HANDS AND PUSH NONSENSICAL SOCIAL DARWINISM BILLS MODEL.

  2. Eunice

    September 1, 2011 at 7:48 pm

    Some people on this site consider themselves to be clever, but I find them downright boring !

  3. J. Grooms

    September 2, 2011 at 10:00 am

    After finally making time to go through the entire BTC report on effects of the budget, all I can say is Wow! Great work, valuable work and an essential public service. Thanks a lot. Now if only the state’s mainstream press would take a hint.

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