NC Budget and Tax Center

“Tweaking” North Carolina’s state budget fails to address the underlying issue of failure to invest

Legislators are planning to release and vote on a state budget for 2019 by June 1. The budget this year will be released as a conference report which according to House Speaker Moore will only deal with minor changes to the second year of a two-year budget, which was debated and approved last year.

While the final details are yet to be seen, based on recent budget proposals it is clear that ”tweaks” to the budget will not address its shortcomings and the under-investment that is occurring because of tax cuts.

Analysis of both the final $23.6 billion budget passed by the legislature last year and the Governor’s recent $24.5 billion budget proposal shows that while they contain different priorities for 2019 they share one thing in common: they are missing investments because of the tax changes that have primarily benefited the wealthy and profitable corporations since 2013.

Reconsideration and debate of the tax changes since 2013 and how they continue to hamper our commitments to community and family well-being is fundamental to creating a budget that reflects our values as a state.

More than tweaking here are also some key areas of investment that are critical and will require a tax code that aligns with the needs of our state:

  1. The aging of North Carolina’s population

The final budget last year put $1 million less in the Division of Aging and Adult Services than was invested in 2017. Preparing for the aging of our state is critical as analysis within the budget shows that North Carolina’s population age 65 and over is already growing faster than other age groups. According to the state’s budget office, “between 2017 and 2037, the older adult population will increase by just over 1 million people (63.3%) to 2.6 million in 2037, and the oldest adults (ages 85+) will more than double from 181,000 in 2017 to 381,000 by 2037.”

  1. The infrastructure for the 21st Century

North Carolina’s infrastructure ranks as the 11th worst in the country yet the final budget did not address in a strategic and comprehensive manner the state’s need to rebuild our infrastructure and create jobs for the 21st Century. A comprehensive approach would target investments towards decaying water systems, mass transportation projects, a clean-energy future, and resilient infrastructure in natural disaster prone areas. It would also advance a more robust investment in broadband access so more people, particularly in rural areas, could access high speed internet.

  1. The preparation of our future leaders and workforce

The final budget fell short of investing in each child’s education because it prioritized another round of tax cuts. Those dollars could have allowed North Carolina to get back to pre-Recession per-pupil spending levels. They could also ensure that children have the textbooks, technology and instructional materials they need to get ahead. Not only in the K-12 classroom but in early childhood, North Carolina continues to miss an opportunity to follow the evidence and commit state resources to expanding pre-k access and supporting access to quality early childhood programs for children in low-income families. At the other end of the education pipeline, North Carolina has not kept post-secondary education affordable or adequately supported a workforce development system that can reach those looking for work and careers that will pay a living wage.

Tweaks won’t make the fundamental fiscal challenge we face go away. It is only likely to make it worse. North Carolinians need leaders to reconsider their prioritization of tax cuts over communities and families.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

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