House Finance Committee tweaks House tax plan, raises budget hole to $864.4 million
Members of the House Finance Committee yesterday made the House tax plan even more expensive, as just noted by my colleague.
The committee removed the $25,000 cap on the amount taxpayers can deduct for charitable contributions, mortgage interest, and local property taxes. The tax plan still means significant tax cuts for the top 5 percent, and it would further slash investments in things that help our economy, like our neighborhood schools and world-class universities.
The committee changes would reduce revenues by $525 million per year, bringing the total cost of the House tax plan to $864.4 million per year once fully implemented.
No area of the state budget would be unharmed by the revised House Tax plan. After several years of budget cuts that have taken an enormous toll on the state’s investments in education, safety, and healthcare, North Carolina must start rebuilding the foundation of our state economy, but the House tax would do just the opposite.
To put the cost of the House’s tax plan in perspective, the cost of the House tax plan could pay for every single one of the following investments in children, families, and communities:
- Give access to NC Pre-k for one year to 24,000 children, including the 12,000 currently on the waiting list
- Provide child care subsidies for one year to the families of 20,000 kids, which is half of those currently on the wait list
- Keep 13,900 teaching assistants in elementary classrooms over the next two years
- Avoid increasing class sizes for K-12 classrooms for one year as proposed by the Senate budget
- Avoid repealing the salary raise for teachers with master’s degrees as proposed by the Senate budget
- Avoid the tuition increase for community colleges proposed by the Senate over the next two years
- Pay for the Minority Male Mentoring Program—which aims to ensure at-risk students complete their program—at community colleges for one year
- Fund for two years drug treatment courts, which help rehabilitate non-violent offenders so they can become productive members of society
- Fund for one year the Housing Trust Fund, which helps ensure that working families are able to pay for housing expenses and still pay for basic necessities like child care and groceries
- Avoid the $7 million cut rural economic development in the Senate budget
- Continue public transportation grants at their current level for two years
North Carolina cannot afford tax breaks for profitable corporations and wealthy individuals—especially ones based on disproven economic theories—when the cost is teacher layoffs, ever-growing waiting lists for pre-kindergarten programs, and the dismantling of public policies that serve as a lifeline for vulnerable families. There are better options.