2017 Fiscal Year State Budget, Commentary

Five of the biggest problems with the state budget passed by the NC House this week

Budget choicesThere are actually dozens of things not to like about the 2017 budget proposal advanced by the North Carolina House of Representatives yesterday. Unfortunately, caring and thinking people have become so numbed and cowed by the relentless and regressive assault on progress and modernity that conservatives have been waging in recent years that many have acquiesced passively. Others have simply allowed themselves to be bought off by mere crumbs and/or simply shrugged their shoulders and expressed gratitude that things weren’t worse. Add to this the vindictive and mean-spirited brand of politics that is practiced by so many conservative leaders on Jones Street these days and it’s no particular surprise that numerous state lawmakers who know better simply waved the white flag this week.

Fortunately, despite the blather from bill sponsors and their apologists and the mostly milquetoast media coverage the muted legislative debate generated, some experts are tolling the damage that the budget bill will wreak (especially when combined with the destructive impact of budgets enacted in recent years).

Here are some of the biggest “sore thumb” problems that are already evident — even before the state Senate likely starts making things worse next week — according to the experts at the N.C. Budget and Tax Center:

#1 – The destructive use of artificial and crippling spending caps – “The House budget would keep state support for services below pre-recession levels, when adjusted for inflation. That would be fine if public needs had shrunk. But they have grown. The budget also caps off the only period as far back as 1971 in which state spending would decline as a share of the economy for eight years in a row while the economy itself grows. As such, many unmet needs will persist in programs that support vulnerable communities, despite a slight increase in investments and a modest compensation package for teachers and state employees.”

#2 – Adding still more, poorly targeted tax cuts – Despite the huge need for new dollars to rebuild structures and services decimated by years of cuts, the House doubles down on the use of poorly targeted tax cuts — much of which will inure to the benefit of the state’s wealthiest individuals. As the BTC notes: “Their proposal reduces General Fund availability by $25 million due to raising the standard deduction to a maximum $16,000 from $15,500, based on filing status. It also raises the maximum by $500 each year over the subsequent three fiscal years. This approach is more costly and not as well targeted as restore the state EITC, which does a better job of helping working families and addressing inequities in our tax code. They reduce General Fund availability by another $51.5 million for a tax break exempting mill machinery from state taxes.”

#3 – Providing inadequate pay to teachers and other state employees – Teacher raises will be decent for some teachers under the House plan (up to 5% for some), but the proposal has the distinct feel of an election year bone that will do little-to-nothing to make up for years of neglect — especially for veteran teachers. Add to the fact that other state employees will go for the umpteenth year in a row without a truly meaningful raise (just 2% this year) during a time of significant national economic growth and falling unemployment and it seems fair to ask: “If not now, when?”

#4 – Shortchanging a bevy of essential structures and systemsThe list of programs for which lawmakers opted not to repair years and years of damage from repeated budget cuts is a long one and includes essential items like childcare, pre-Kindergarten, the Teaching Fellows program, school nurses, the Housing Trust Fund, re-entry programs that help ex-offenders, drug treatment courts, rural economic development, displaced homemaker services and rural Internet access to name just a few. Lawmakers also failed to repair the damage inflicted in recent years on higher education where tuition and fees for university and community college students continues to skyrocket.

Perhaps most egregiously, however, the House once again failed to expand Medicaid under the Affordable Care Act — a decision that will cost thousands of lives and and cost the state billions in federal dollars that would boost the economy.

#5 — Leaving more than $127 million ‘on the table’ — In an apparent effort to adhere to their inadequate and artificial spending caps, House members left $127.4 million unspent that could have addressed a host of critical needs like those describe above. Instead (and in spite of the fact that they’d already socked away millions in rainy day funds), the House simply left the money just sitting there like a wealthy autocrat who squirrels away vast sums while his subjects suffer just outside the gates of his castle.

In other words, the 2017 budget passed by the North Carolina House is, simply put, a mess. And it’s only in comparison to the utter disasters that have preceded it in recent years that it looks something less than completely and irredeemably awful. What’s more, it’s all but sure to start getting worse on Monday when the Senate has at it.







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