2018 Fiscal Year State Budget, NC Budget and Tax Center

Twelve more big policy changes buried in the N.C. Senate budget

There are a lot of issues with the N.C. Senate budget proposal as drafted. One issue is the sheer number of major substantive policy changes, including in the biennial spending proposal. Absent a full debate by policymakers and public input on each of these items, it is impossible to fully consider the multitude of ways in which the systems serving North Carolinians and communities will change as a result of the passage of this single bill. We noted a dozen such items in a post last week. Here are another dozen that should give further support to the notion that the House needs to start from scratch with a budget proposal that truly seeks to serve the broader good:

  1. Increases expenditures on ads for the North Carolina Education Lottery to 2 percent up from 1 percent (page 10, Section 5.3 (b))
  2. Converts state’s drivers education program provided to students to a reimbursement program that will likely price-out and reduce the number of low-income students served by program (page 31, Section 7.21 (b))
  3. Establishes individual county Departments of Social Services as financially responsible for erroneous issuance of Medicaid benefits and Medicaid claims payments (page 174, Section 11H.22(f))
  4. Eliminates the local school board statutory authority to file funding lawsuits against its county (page 53, Section 7.30)
  5. Eliminates longevity pay for principals and assistant principals (page 57, Section 8.3(a))
  6. Creates the Legislative School to replace the Governor’s School and gives the authority to approve the curriculum to the UNC Board of Governors (page 74, Section 10.16(a))
  7. Increases the age of juvenile jurisdiction except for certain felonies but without funding for the juvenile justice system (Section 16D.4(a))
  8. Aligns Department of Transportation program for participation by disadvantaged minority-owned and women-owned businesses with federal law to limit requirements and application to specific projects or contracts (page 317, Section 34.15(a))
  9. Requires the return of Bicycle and Pedestrian Planning Grant funds if projects in a municipality or county fail to be completed within six years despite long-time frames for securing all funding needed, review by all relevant agencies (page 32, Section 34.22(a))
  10. Eliminates Pesticides Advisory Committee (Page 195, Section 12.1)
  11. Creates new Site and Building Development Fund, a loan fund designed to help communities put up shell buildings, water/sewer, access roads with no clarity on how it will interact with the existing Industrial Development Fund, which provides grants for the same purpose (except buildings) (Page 229, Section 15.7)
  12. Earmarks Rural Division grants for specific projects in lawmakers’ districts (Page 232, Section 15.8)
NC Budget and Tax Center

Federal cuts threaten key NC priorities; State Senate budget makes matters even worse

The Senate budget passed last week sets out the ways in which federal dollars will be invested in various key priorities for the health, well-being and infrastructure of our communities. But, unlike previous years, it is not guaranteed that North Carolina will receive these funds. North Carolina already faces an uncertain future in 2018 as the state is projected to lose $1.1 billion (8.7 percent) in federal discretionary grant funding compared to 2016 levels. If these dollars do not arrive from the federal government, it will present a serious challenge to how North Carolina will pay for important investments.

As we have detailed since the release of President Trump’s budget blueprint, proposed elimination of key programs and unspecified cuts will hurt North Carolinians and our communities. It will also shift costs to states.

North Carolina can ill afford further abandonment by the federal government of its commitment to strengthen the state’s economy and communities. These are dollars that help to ensure hungry children have access to nutritious food, that children can receive a good education regardless of the wealth of their community, that housing can be kept to code and accessible to seniors and people with disabilities, and that water and sewer infrastructure is sound.

Indeed, federal cuts and program eliminations could force state policymakers to let more needs go unmet or raise taxes.

Here is how the Senate would like to allocate just three of the 20 major federal grants on the chopping block.  Importantly, there is no mention by Senate leaders of how they would address the loss of these funds. Read more

2018 Fiscal Year State Budget, NC Budget and Tax Center

12 significant policy changes buried in the NC Senate budget

The North Carolina Senate passed a budget last week after less than 72 hours of public scrutiny and limited debate. While investment choices are the focus for the budget, the Senate budget also includes a number of special provisions that set out policy.

These policy changes don’t get the scrutiny or debate that they deserve when buried in the spending bill. They have the potential to make significant changes to the systems and services that reach North Carolina communities and families.

Here are just a dozen of the significant policy provisions from the Senate Budget that should have received robust debate and a full discussion of their implications for our state’s economy and well-being and serving the public good.  Many fall far short of those goals. Read more

2018 Fiscal Year State Budget, NC Budget and Tax Center

More on the choices made (and not made) in the final Senate budget

By now, readers here have likely seen the News & Observers reporting on Amendment 15 to the Senate budget bill from Senator Brent Jackson that was passed in the early hours of the morning and is included in the final budget.  This Amendment uses surgical precision to carve out funding for certain communities—for educational and job training programs and arts initiatives– to fund services to address the opiod epidemic.

The broader context, of course, is that the state has the dollars to make an investment in public health programming, training of police and public safety personnel and the delivery of courts services in the face of rising caseloads and the loss of drug treatment courts and fund education.

Rather than put dollars to use in addressing a public health crisis, the North Carolina Senate proposed to give it away to the wealthy taxpayers and big companies of the state in the form of another round of tax cuts.  The Senate budget includes $324 million in tax cuts for the upcoming fiscal year and stashes another $263 million in the state’s savings reserve.

Our legislative leaders consistently remark on the revenue being collected above what was projected.  Time and again, however, they refuse to put those dollars to use for the public good but choose to benefit very few.

It is worth noting the amendments during the third reading that seemed to prompt the recess and final amendment from Senate leadership.  None of these were debated fully but most, through a procedural motion, were tabled upon introduction.  Just one amendment was voted on.  Taken together, they present strong contrasts. These amendments show the broad public benefit that our collective resources could be put to—from addressing a public health crisis to ensuring that teachers and state employees have a wage that reflects what it takes to make ends meet to funding modern-day infrastructure in rural communities.  Their proposed funding sources are varied but consistently demonstrate that our state has the dollars now and can raise the revenue fairly to support these priorities. Read more

NC Budget and Tax Center

Senate budget misses the mark in post-secondary education

The Senate budget on post-secondary education, the combined investments in community college and the UNC system, is most notable for what it doesn’t include than for what it does.  The University system continues to receive net reductions despite the growing economy, more students attending four year colleges and universities and years of steady funding cuts. The modest increases in the Community College system are insufficient to meet completion and skills training goals.

Post-secondary education and skills training is a pressing need in North Carolina.  The state must prepare more residents with credentials and degrees if it is going to meet the projected demand for skilled workers by 2021.  Additionally, to grow the economy in a way that everyday North Carolinians will see the benefits in the form of higher incomes and thriving communities with businesses expanding, investments in post-secondary institutions and the tools that boost completion along a range of recognized credentials and degrees is critical.

Of particular note are the following items in the Post-Secondary Education budget:

  1. The Senate provides the bare minimum needed to keep Community Colleges serving the public by funding anticipated enrollment growth but making no additional investments in student support services or programming needs to increase credential and degree attainment. In contrast, the Governor had proposed funding for continuing education courses at the same level as curriculum courses, providing financial assistance to those seeking industry-recognized credentials, and establishing a scholarship program to fund community college tuition and fees for eligible high school graduates from North Carolina.
  2. For the UNC system, the Senate requires a reduction in the UNC operating budget equivalent to $1.8 million in the first year and a total reduction of $20 million (recurring and non-recurring) in the second year. Moreover, the Senate would negatively impact centers and institutes system-wide with a reduction of $8 million in funding. These centers and institutes often serve as additional sites for research and development, applied learning opportunities for students as well as a connection point between the campus and community across the state.
  3. The Senate would move the Apprenticeship NC program to the Community College System from the Department of Labor which could provide greater integration of this on-the-job preparation with the skills training infrastructure of Community Colleges. However, the Senate makes no further investments in the program providing just $1.5 million in state and federal funds for its operation.
  4. Fails to provide state funding for need-based grant aid to ensure access to a post-secondary education is affordable and reduce the need to take on student loan debt. While failing to boost state support for need-based grant aid, the Senate budget provides an additional $20 million in funding for the upcoming fiscal year 2018 – and an additional $10 million the following year – for private vouchers that provide public-funded scholarships for students to attend private K-12 schools.