NC Budget and Tax Center

What I want to hear in the State of the State

Tonight Governor McCrory will lay out his vision for North Carolina and his policy ideas for getting us there. He is also likely to give us a glimpse into his view of current economic, fiscal and social conditions in the state.

At the Budget & Tax Center, we have noted that the central challenge for the governor and all policymakers is building an economy that works for everyone. One of the essential tools in that effort is the state budget.

Unfortunately, while other states are reinvesting as their economies recover from the recession, North Carolina continues to underinvest in the education of our children, the skills of workers and the public health of our communities. In fact, if we were investing at pre-recession levels as a share of the economy today, there would be $3.2 billion more for our schools, courts, clinics and colleges.

But as the economic recovery strengthened—benefiting primarily the wealthiest 1 percent, who have captured all of the income growth since the start of the recovery—policymakers pursued a tax plan that shifted the tax load onto middle- and low-income taxpayers while giving a tax break to the state’s wealthiest and profitable corporations. It also reduced the dollars available for core investments in our economy, costing the state almost $900 million this current fiscal year and a projected more than $1 billion in the fiscal year that begins in July. In tonight’s State of the State, I want Governor McCrory to talk about how he will address the cost of that tax plan and make sure everyone is contributing to the infrastructure of opportunity that has made our state great.

Yesterday the BTC released a brief outlining five strategies that could address the cost of the tax plan and provide some revenue for much-needed investments. These strategies include: establishing an income tax rate structure based on ability to pay; reinstating a critical tax credit for working families before expanding the sales tax; making sure that large, profitable corporations pay to support the services they enjoy; eliminating special tax breaks that don’t help our economy; and avoiding short-sighted budget cuts and the privatization of services that can cost us more down the road. These are sound policy ideas that should be part of lawmakers’ approach in this long legislative session.

An economy won’t grow nearly as strong for nearly as long without a focus on providing opportunity to everyone. The barriers to the middle class will only be higher if policymakers don’t ensure that all communities and all North Carolinians can work, earn a living wage and participate in their communities’ economic and civic life.

I certainly hope that the governor doesn’t ignore the reality of today’s economy. There are more unemployed people in North Carolina than before the start of the Great Recession and fewer people working. There has been a boom in low-wage work since the start of the recovery, with more than half of the jobs created paying less than poverty wages. And despite the economy growing due to increased productivity of workers, all of the income growth since the recovery began has gone to the top 1 percent in North Carolina.

My vision of North Carolina is one of communities of opportunity across the state. To get there, we need a sustainable state budget that is based on a tax code that both raises enough money for core services and doesn’t give tax cuts to the wealthy at the expense of everyone else. Without either of those foundations in place, we can’t provide quality education from birth to career or protect the health of our families from cradle to old age or support vibrant main streets. In sum, we can’t be the North Carolina we all want to be.

Check Also

Now is the time to rebalance the state’s unemployment insurance system

New research from The Century Foundation released today ...

Top Stories from NCPW

  • News
  • Commentary

If the General Assembly were an army, their troops would be spread too thin. Lawmakers made a tactic [...]

The UNC Board of Governors is holding its last meeting of 2017 Friday, where the latest of its many [...]

Just south of Candler off the Pisgah Highway is a lovely piece of property on Little Piney Mountain [...]

Veteran North Carolina education policy expert Kris Nordstrom has authored a new and vitally importa [...]

The post How the G(OP)rinch stole checks and balances appeared first on NC Policy Watch. [...]

“All speech is free, but some speech is more free than others.” This seems to be the motto of the cu [...]

Trumpists prepare to raze another vital common good law It’s hard to keep up these days with the flo [...]

The post That’s how ‘Humbug’ is done appeared first on NC Policy Watch. [...]

Featured | Special Projects

NC Budget 2017
The maze of the NC Budget is complex. Follow the stories to follow the money.
Read more

NC Redistricting 2017
New map, new districts, new lawmakers. Here’s what you need to know about gerrymandering in NC.
Read more