NC Budget and Tax Center

The Tar Heel state is not broke, and let’s not forget decisions made in 2013

“We can’t afford it.” This is the prevailing refrain of state leaders nowadays in their efforts to explain away or rationalize their waning support for investing in North Carolina’s future.

Whether the issue is pay raises for K-12 teachers and other state employees, supporting targeted economic development initiatives, protecting the state’s natural resources and environment, one repeated excuse is that revenue is not available for such public investments.

This excuse was used once again in a memo by Art Pope, State Budget Director, in response to the UNC Board of Governors’ (BOG) 2014-15 budget request. In the memo, Pope informs the BOG that its budget “simply is not realistic” and warns that funding the respective budget request “would require the Governor and General Assembly to make major reductions in other state agencies and programs, such as our courts, the “K-12” public schools, and health care.

North Carolina is NOT broke. The costly tax plan passed by the NC General Assembly and signed into law by Governor McCrory last year has created a self-imposed budget challenge. This challenge is occurring, as Pope acknowledges, even as the economy is improving.

The tax plan passed last year reduces annual revenue by more than $650 million once all the new tax changes are in place and will overwhelmingly benefit the wealthy and profitable corporations. State leaders sold the tax plan with the claim that it will make North Carolina more competitive. Instead, it won’t deliver on promised job creation and jeopardizes investments that have long been recognized as the foundation for our state’s strong economic performance.

Despite the repeated claim that North Carolina can’t afford to invest in its future, state leaders are simply choosing not to do so. Regarding Pope’s memo to UNC’s BOG, the reality is that state funding on a per student basis for the UNC System has been cut by nearly 16 percent when adjusted for inflation since 2008. Average tuition and fee cost within the UNC system increased by nearly 40 percent during this time.

North Carolina is still investing less in vital public services than it did before the recession, including K-12 education, public universities, and economic development. This is not because the Tar Heel state is broke. This is because our state leaders have chosen a dangerous path of waning support for critical public investments that are the foundation of economic growth. They can make the right choice this year and choose to stop the next round of personal and corporate income tax rate reductions included in the tax plan, which largely benefit the wealthy and profitable corporations.

2 Comments

  1. Jack

    March 10, 2014 at 3:04 pm

    State is not broke! That’s not what Wake County Commissioner Joe Bryan said a couple of weeks ago. He said the last he checked the federal and NC governments didn’t have any money.

  2. Mary

    March 11, 2014 at 6:06 pm

    North Carolina is not broke nor does it lack options to improve the quality of life for all it’s people. It’s a travesty that policymakers have chosen to sign off on options that close the doors to opportunity,good jobs and education in lieu of a misguided (some say hair brain) ideas to race to the bottom. Where ever is that thinking coming from and what can sensible minded people do about it?