2018 Fiscal Year State Budget, NC Budget and Tax Center

NC House budget stays the course on the wrong path for North Carolina

The House debate over their budget proposal was another evening to early morning affair at the General Assembly.  Despite being limited by various rules for considerations on the floor, the debate still made clear the stark contrasts in policymakers’ approaches to the state’s current economic position and the well-being of North Carolinians.

Whereas House leaders argued that North Carolina should “stay the course”, the minority of House members expressed concerns regarding unmet needs and the cumulative short and long-term cost of ignoring them.

The budget passed with few substantive changes to make smarter investments or policy decisions.  The amendments presented provided more examples of the ways in which steady tax cuts in recent years have narrowed our vision for what is possible in the state.

For example, a robust debate about access to high-speed broadband in rural communities made clear the economic and educational imperative of this modern-day infrastructure to communities across our state. Even lawmakers who opposed providing funding for this unmet need acknowledged the importance and economic benefits of access to broadband, yet they kicked the can down the road until later when maybe they could afford to make this investment. The funding source proposed for this infrastructure investment may have been less than ideal, but other potential revenue sources exist highlighting the shortsightedness of lawmakers.  A tax break included in the House budget for distribution companies like Amazon—which doesn’t have a cost attached yet—could go some way to funding the build-out of broadband infrastructure in more communities. Furthermore, holding the corporate income tax rate at 4 percent rather than 3 percent could go a long way to fund rural broadband and a more robust rural economic development strategy that addresses housing, small business lending and other fundamental infrastructure needs that promote thriving communities.

An amendment was introduced to increase the cost of living adjustment for retired public employees, but the amendment was tabled and never voted on.  In tabling the amendment, it was noted that while an important priority, the request wasn’t one that could be afforded at this time.

At the other end of the career pipeline was a debate about reducing the state’s future commitment to private school vouchers in order to fund scholarships for high school graduates to have a tuition-free community college education. This effort would make our state more competitive in a 21st Century economy by helping increase degree and credential attainment.  This debate was particularly telling in the clear misunderstanding of the real challenges that many students face in affordably accessing the skills and training that will prepare them not just for careers but also for life as an engaged citizen.  Again, this amendment was not adopted.

Time and again, House leadership noted and acknowledged how various proposed amendments were important and addressed real needs and challenges for our state.  They said they just couldn’t afford to do something about it.

It is all too clear to most of us following at home that they can.  It will, of course, require them to reconsider their major tax cuts in recent years.

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