Commentary, NC Budget and Tax Center

Hardship across North Carolina requires immediate federal action

As members of our North Carolina congressional delegation return to Washington to develop additional responses to COVID-19 and its public health and economic impacts, it’s essential that they closely examine evidence of the devastation the pandemic is wreaking here and around the country and shape a legislative response accordingly.

This is particularly true of our U.S. Senators Burr and Tillis, who have yet to vote on a relief package since the early days of the COVID-19 crisis.

In analysis release today, the Center on Budget & Policy Priorities demonstrates the staggering need that has arisen across the country (including North Carolina) in the face of COVID-19 and its public health and economic impacts. As the authors write:

“Hardship is high among families for varied reasons. Many have lost jobs or seen their earnings fall. While many jobless adults qualify for unemployment benefits, some do not. For example, those who were out of work prior to the pandemic often do not qualify for jobless benefits. This includes those who left employment because they were ill or needed to care for a new baby or ill household member and those who lost employment during the normal labor market ups and downs that occur even during good times. It also includes people who recently completed schooling or training and now can’t find a job. Households are also facing rising food prices and higher costs as children are home and missing out on meals at school and in child care and summer programs. And with widespread job losses, getting help from extended family members and friends can be more difficult.”

Data from the report on the hardships afflicting North Carolina include:

  • 713,000 households (including 522,000 children) didn’t have enough food to eat during the last week of June through July 7′
  • the number of households receiving food assistance from February to May 2020 increased by 13%; and
  • 1 in 5 North Carolinians are behind on rent.

And while these indicators point toward families struggling to meet basic needs, they don’t fully capture the compounding effect this moment is having in blocking communities of color from the opportunity to survive and thrive. As the report authors note:

“Hardship, joblessness, and the health impacts of the pandemic itself are widespread, but they are particularly prevalent among Black, Latino, Indigenous, and immigrant households. These disproportionate impacts reflect harsh inequities — often stemming from structural racism — in education, employment, housing, and health care. Black, Latino, and immigrant workers are likelier to work in industries paying low wages, where job losses have been far larger than in higher-paid industries. Households of color and immigrant families also often have fewer assets to fall back on during hard times. Immigrant households face additional unique difficulties: many don’t qualify for jobless benefits and other forms of assistance, and those who do qualify for help often forgo applying, fearing that receiving help will make it harder for them or someone in their family to attain or retain lawful permanent resident status (also known as “green card” status) in the future.”

Given this backdrop, swift and bold action from Congress — particularly from of our U.S. Senators — is essential in order to build a legislative package that will respond to the crisis and secure an inclusive recovery. In particular, new legislation must shore up supports for families and communities in need and sustain public infrastructure at the state and local levels until this crisis is under control.

The bottom line: Hardship left unaddressed will stall our recovery, worsen health, education and economic outcomes for individuals and communities and signal a rejection of the humanity of all people across North Carolina. It is time for the Senate to act.

Click here to read the full report.

Alexandra Sirota is the Director of the N.C. Budget & Tax Center.

COVID-19, NC Budget and Tax Center

Four charts that explain the urgency to extend unemployment insurance

Last week, the U.S Department of Labor released the latest weekly data on unemployment insurance claims, showing persistent job losses for working people across the country. In North Carolina, the Division of Employment Security reports that more than 1.3 million people have made claims for unemployment insurance since March 15.

These numbers leave little doubt that the country is in a deep recession and that boosting the income of jobless workers is essential to securing a path to a strong and inclusive recovery.

Yet Congress has not acted to extend critical federal unemployment insurance provisions that will expire the week ending July 25. The loss of the $600-a-week boost to jobless workers’ income, especially when searching for or going back to work is tremendously difficult, will be devastating to families and communities across the state also facing a not-yet contained pandemic.

As the Economic Policy Institute writes, failing to extend federal unemployment insurance programs now is not just “cruel but bad economics.”

Workers without wage replacement through unemployment insurance will be forced to cut back on spending which is what keeps the broader economy afloat. Workers will also face greater hardship as meeting basic needs, paying bills and rent or mortgages becomes increasingly impossible.

Here are four charts that explain the urgency to extend the federal programs. Read more

Commentary, NC Budget and Tax Center

Twelve good ideas for the General Assembly to move forward on now

This week was the filing deadline for legislative proposals at the General Assembly. While it isn’t the last opportunity for legislators to introduce policy ideas for consideration, it presents an important milestone in the session and a crucial time to review the priorities of policymakers.

The work of the General Assembly will be critical to address the public health threat of the COVID-19 pandemic and its ripple effects through the economy. There remain many gaps in the response from federal and state policymakers and the result is persistently high needs for families and communities across North Carolina.

The following are a dozen legislative proposals that would support the well-being of our neighbors and secure a stronger recovery for our state.

  1. House Bill 1229 (Howard, Wray, Saine) would provide funding for the unemployment insurance system, which has been overwhelmed by a historic number claims and pays out only half of those claims to individuals. It would also extend a temporary waiver on the time limit on food assistance. House Bill 1075 (Alston, Batch, Holley, Hunt) and Senate Bill 792 (Nickel, Chaudhuri) would also make important fixes to the system to protect workers and the economy when federal programs expire at the end of July.
  2. House Bill 1120 and Senate Bill 778 (Murdock, Smith, Foushee) would expand anti-hunger programming on college campuses  and provide funding to UNC institutions for this purpose. With college students excluded from federal food assistance and often facing higher rates of food insecurity, this program makes sense anytime, but particularly when hardship is likely to persist. Senate Bill 849 (Petersen), another important anti-hunger proposal, would remove the ban on food assistance for certain people with drug felonies and would support their successful re-entry from prisons and jails to society.
  3. House Bill 1040 (Batch, Brewer, Clark, Gailliard) and Senate Bill 834 (Robinson, Foushee, Blue) would close the Medicaid coverage gap. It would ensure that people who have lost health insurance during COVID-19, as well as those who were blocked from accessing Medicaid before the virus hit, can receive affordable care. In addition to creating a healthier, stronger community, researchers estimate the state would increase its business activity by $11.7 billion in just three years between 2020-2022 which could be spent on education, infrastructure and other needs.
  4. A series of bills would make important steps in addressing the state’s affordable housing challenge, including the unique pressures on renters and homeowners whose income has been disrupted by COVID-19. House Bill 1134 (Autry, Holley, Harris, Butler) and House Bill 1135 (Autry, Holley, Harrison, Butler) would provide rental and foreclosure assistance, respectively, while House Bill 1200 (Szoka, Saine, Baker, P. Jones) would do the same. House Bill 1208 (Lambeth) would put more dollars towards the state’s Workforce Housing Loan Program, supporting the development of more affordable units across the state. Read more
Commentary, NC Budget and Tax Center

First look at NC’s potential revenue losses from pandemic points to an obvious policy course

Image: AdobeStock

The consensus revenue forecast released by the General Assembly today provides further evidence of both the enormous economic harm COVID-19 is inflicting on the state and some important long-term certainties about our economy. More than ever, it’s clear that how people are faring and what policy decisions are made to support their well-being will make a difference for the state’s economic recovery.

Economists with the Fiscal Research Division and Office of State Budget and Management are cautiously projecting revenue losses as deep as the Great Recession, but they also lift up many questions that remain about how this downturn and the recovery will play out. They also make clear that the numbers reflected in today’s forecast could change.

One thing we know for certain, however, is that our leaders in Washington and Raleigh can and should put policies in place today to support people and thereby, in turn, our economy.

Only through a bold policy agenda that rejects the status quo can our state hope to bend this latest curve upward so that we can secure an inclusive recovery and ensure all communities can thrive.

The hard truth is that weaknesses of our last economic expansion left our state less resilient in the face of this pandemic. Too many North Carolinians were already living paycheck to paycheck; too many didn’t have access to affordable health insurance; too many couldn’t afford safe housing or afford to put food on the table each night. Too many barriers to good jobs and the capital to start new businesses persisted for Black and brown North Carolinians.

Our leaders must go further to provide people with the supports to make it through this pandemic. A pro-growth agenda can’t ignore the drag of inequities and hardship any longer, but must first invest in every person’s well-being.

Even with the projected revenue losses, North Carolina leaders can make smart choices to quicken the recovery for more people.

Now is the time for our state leaders to call for additional federal aid to state and local governments that is sufficient and flexible to fill this revenue shortfall. Now is the time to look to smart, targeted revenue options at the state level that can undo tax cuts that have hampered our public response.

In this moment and for the future, North Carolina must have the foundation of public services and institutions in place to deliver well-being to all.

Alexandra Sirota is the Director of the N.C. Budget & Tax Center.

Commentary, NC Budget and Tax Center

COVID-19 damage will worsen and linger without quick, robust policies from state leaders

The speed and strength of our economic recovery from COVID-19 will depend on the timeliness and inclusivity of our state’s policy response.

If we wait to deploy dollars and connect more people and businesses to the necessary supports for health, housing, and income, North Carolina’s recovery will take longer. It will also result in costly long-term damage to the wealth, stability, and health of our neighbors. As researchers at the New York Fed have found the importance of timely and adequate early policy interventions during a public health crisis can make a significant difference in the trajectory of a community’s  recovery.

Already, the Congressional Budget Office is projecting that unemployment rates will remain as high in 2021 as they were during the highest points in the Great Recession — 10%.

Nationally, the scope of need is staggering and unlike any economic event in modern history.

Yesterday, 100 county snapshots for North Carolina were released to show the barriers that persisted through the last economic expansion for too many communities and people in our state. This data — along with emerging measures of need in light of COVID-19 — should signal the urgency of a robust response that seeks to secure recovery for everyone and all communities.

It’s worth repeating: Quick deployment of dollars and policies to minimize the harm to people will strengthen the state’s recovery and ensure that the new rules of the game better support our collective well-being.

The needs are stark and make clear the wide-reaching effects of the virus on every person. For example, there have been nearly 15,000 confirmed cases of COVID-19 and more than 500 deaths in North Carolina since the start of the pandemic, adding to the already high numbers of people without health insurance.

With reopening underway and people returning to their jobs, too many workers are at greater risk for infection because protections are not in place. Personal protective equipment is available at varying levels, with just 31 days’ worth of supply for N95 masks and no gowns.

And since our last economic expansion kept too many people living paycheck to paycheck, many families are struggling even more now to meet basic needs. Food and housing insecurity were already high before COVID-19, and evidence of missed meals and missed rent payments is mounting. Read more