Commentary

Disastrous 2013 tax cuts continue to undermine, damage public services

Tillis_McCrory_Berger-400It seems like a long time ago, but it was just the beginning of last year that North Carolina’s newly-elected governor promised state “tax reform” that would be “revenue neutral.” In other words, while the Guv was promising tax cuts, he was also calling for tax modernization that would enhance revenues in other areas — thus assuring that government would have the money it needed to fund core services in a fast-growing state. So, while it was always clear that a McCrory plan would enact regressive changes that favored the well-off, there was at least some hope that the state could at least avoid going backwards in the provision of basic services that undergird the middle class

We all know what happened next. Legislative leaders deep-sixed McCrory’s revenue neutrality idea in a New York minute and, instead, quickly acted to make big tax cuts for the wealthy and profitable corporations a vehicle for slashing core services like education, environmental protection and the courts system.

Now, less than a year since the Tillis-Berger tax package went into effect (with full McCrory approval), the chickens are coming home to roost. As this Public News Service story highlights this morning, 2015 is almost certain to bring North Carolina yet another damaging and wholly unnecessary budget crisis:

North Carolina lawmakers are likely enjoying some downtime after the legislative session and midterm election, but experts predict a tough session waiting for them on their return to Raleigh.

A report from the Office of the State Controller indicates tax revenues are down by almost $400 million compared with this same time last year – a six percent drop in revenue. Alexandra Sirota, director of the North Carolina Budget and Tax Center, says it’s not a problem the State Assembly will be able to ignore in January.

“This is a serious issue,” she says. “It’s self imposed in that policymakers chose to reduce our revenue. Now they’re going to have to make choices about some pretty deep cuts.”

In other words, if you thought things were on the rebound in North Carolina, think again. At a time in which the state could and should be leading the national recovery, insipid decisions like turning down billions in federal Medicaid expansion dollars and slashing taxes on the people at the top continue to leave the state in a permanent state of fiscal crisis. It’s so blatant that one gets the distinct impression that this is exactly what conservative leaders had in mind all along.

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