House and Senate leaders have agreed to a spending target that will guide the development of both chambers’ two-year budget proposals this year before they have fully catalogued the needs in communities and discussed the smart public investments that help communities thrive.
While the proposed target of $24 billion dollars represents a year-over-year increase, it falls short of making progress toward meeting the unmet needs and backlog of projects in communities that could strengthen our economic foundation and the well-being of families.
The proposed spending amount would keep the budget a full $5.8 billion less than what would have been invested if we were at historic levels of public investment. To be at the 45-year average of state spending as a share of the economy of 6 percent, the state budget would have to invest roughly $29 billion. It was that historic investment level that laid the foundation for economic advancement of our state, promoted improvements on a range of indicators of family well-being, and increased educational attainment and commercial activity.
Indeed, releasing a spending target without a debate about how the state will support the health and safety of its residents, connect our young people to educational opportunities, and connect our workers and businesses to the cutting-edge training and technology they need is the wrong place to start.
North Carolina deserves a budget that raises revenue to reconcile the needs of a growing state with the consequences of a flawed tax experiment that benefits the wealthy and big companies and has reduced revenues over time.
Delaying this conversation any further is fiscally irresponsible and keeps us on a path that is not structurally sound.
As we noted in a release last week, a higher tax rate on income over $1 million would be a good first step toward funding community priorities. In combination with addressing the erosion of the corporate tax base and unsustainable cuts to the corporate tax rate, it is possible to put in place a tax code that meets our needs.
As states across the country regularly show, taxing wealth and investing in shared services is the best way to build a resilient and inclusive economy. Let’s be clear: Our state is still not providing a job to everyone who wants to work, still has fewer people employed as a share of the population than before the Great Recession, remains challenged by persistently high and concentrated poverty, and is among the least economically mobile states in the country.
A formula approach to our budget based on flawed economic theories and national groups’ soundbites is untethered to our state’s economic realities nor will it allow us to reach our full potential.
More than an arbitrarily low spending target, North Carolinians need and want our policymakers to commit to funding the programs and services that make early learning opportunities affordable and accessible for more young children and their parents, that eliminates the gap in health care coverage for hundreds of thousands of North Carolinians, that makes housing affordable and safe in every community, and that provides opportunities to learn and build skills for jobs of the future.
North Carolina needs leaders to forge a new path based on what works to connect people to opportunity and grow our economy for all, not just the wealthy few.