NC Budget and Tax Center

Lawmakers’ budget prioritizes tax cuts over early childhood education

Last night, the North Carolina General Assembly released their budget determining how the state would be funded for the 2018-19 fiscal year. The $23.9 billion budget marks the 10th consecutive year that the state has declined as a share of the economy.

While North Carolina has gotten used to austerity budgets that prioritize tax cuts over critical investments, the process being used this year limits debate and prohibits changes even when significant errors are being made that will hurt communities.

One such error is the decision not to use federal funds to reach more children in North Carolina to with high quality early education.

In February, Congress, in a bipartisan effort, approved an expansion to the Child Care Development Fund Block Grant. As a result, North Carolina received $79 million in order to expand and invest in early childhood education. The new funding would have allowed lawmakers to provide more slots for eligible children to receive a high quality early education that would prepare them for success in school.  It could have also gone a long way to addressing the woefully underpaid early educators in communities across the state to achieve the legislature’s commitment to a $15 living wage.

Instead, legislative leaders have raided these federal funds and taken away already committed federal dollars for early childhood programs.

Here is an overview of what happened:  Last year, state legislative leaders expanded access to pre-K with state appropriations and funded more child care subsidy slots with the diversion of additional TANF federal funds to child care.  They got a lot of credit for committing to a state priority even though they still were relaying significantly on federal dollars to do so.

This conference budget, after both recurring and non-recurring funds have been made available from the federal government, removes $50 million in state funding to NC Pre-K, replacing it with federal TANF Block Grant dollars and stops the transfer of $50 million to child care subsidies from TANF.  In essence, legislative leaders are backfilling their state commitment with more federal money and failing to fully expand the program to all who could be served by these additional federal dollars.

By manipulating funding streams, lawmakers are able to shirk their responsibility and commitment to building an adequate early childhood education system and continue to prioritize tax cuts.

Not only is it morally reprehensible that lawmakers continue to prioritize tax cuts over the educational needs of children, it’s fiscally irresponsible. Our state’s budgeting process is most sustainable when we can ensure that we will have the state tax dollars to meet service needs today and in the future.  Because of the scheduled tax cuts in January 2019 that will go forward under the legislature’s budget, state revenues will not keep up with the cost of delivering current service levels let alone expansion of services to those who would benefit from affordable, high quality early education.

Federal dollars intended to expand early childhood access should be used to serve more children not allow legislatures to continue to prioritize tax cuts that primarily benefit the wealthy and profitable corporations.

This move by lawmakers misses a once in a lifetime opportunity to build an early childhood education system that will help invest in and build in the future of our state.  It is a missed opportunity in the lifetime of thousands of NC children.

Brian Kennedy II is a Public Policy Fellow for the Budget & Tax Center, a project of the North Carolina Justice Center.

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