NC Budget and Tax Center

The stakes are high, NC should reverse course regarding tax policy

The costly tax cuts Kansas lawmakers passed in recent years have had a negative economic and fiscal impact on the state that serves as caution for North Carolina. Leaders in both states have expressed a desire to ultimately eliminate their respective income tax and rely more on the sales tax to fund core public investments. This tax shift would largely benefit the already well-off and powerful corporations and threatens to make North Carolina a less attractive and competitive state.

Both states are pursuing a dangerous course towards a damaging outcome. Kansas’s sprint toward this outcome provides a grim picture of what North Carolina can likely expect should we stay on this perilous path.

The failed Kansas experiment poses damaging consequences to the long-term health of the state. The state faces a persistent state budget deficit that in recent years have resulted in Governor Brownback using public education funding, highway money, state dollars for health care services, and increased sales taxes to plug the budget gap. Despite these efforts, Kansas still faces a $345 million budget hole.

Kansas lawmakers predicted a boom in job growth and the economy as a whole thanks to their massive tax cuts, but that boom never materialized. Instead, state revenue declined by 30 percent and, as the Kansas Center for Economic Growth highlights, personal income growth for Kansas only increased 1.6 percent, compared to 2.8 percent for the region and 3.1 percent for the nation since late 2012. As for public education, the state’s Supreme Court is scheduled to determine whether Kansas will be required to spend upwards of $500 million for school upgrades across the state, including in economically depressed areas. This ruling will address a 2014 ruling by the state’s highest court that disparities in public funding of education violated the state’s constitution. The stakes are high for Kansas and its nearly 3 million residents.

The stakes are also high for North Carolina and its more than 10 million residents. And as our state continues to grow the stakes will get higher. North Carolina lawmakers passed tax cuts in recent years that will reduce annual revenue by more than $2 billion. These are resources that could be used to fund our public schools, where state support remains below pre-recession levels. They could be used to provide health care services for a growing aging population and the poor. They could be used to reduce persistent wait lists for Pre-K and childcare subsidies. They could be used to ensure that a post-secondary education at public colleges and universities remains affordable for all North Carolina students.

North Carolina should get off its current path of prioritizing tax cuts over public investments. We have an opportunity to reverse course and avoid the likely damaging outcome that lies ahead, as can be seen in Kansas. Let’s take heed and reposition our state for a prosperous future.

2 Comments


  1. Elliot Young

    November 22, 2016 at 9:20 am

    Kansas lost its AAA bond rating because it decided to keep spending beyond its means – not because they cut taxes for the working population. North Carolina has some of the strongest job growth and wage growth in the country right now. Oh, and let’s talk about how they have growing net in-migration! That sounds pretty competitive and attractive to me – if hundreds of thousands of people are migrating into the state for jobs and better wages! Oh, and how about those historically high budget surpluses that North Carolina is earning, despite cutting taxes? Why don’t you get your facts straight, because right now, you’re mouthing off about how you’d like to see North Carolina be poorer, less competitive, and a place of less opportunity.

  2. tony d

    November 22, 2016 at 1:09 pm

    The republicans are only looking out for the 1%….They dont care about education…They are a sorry bunch of a*holes…Greedy and shifty…

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