Commentary

Deportation is costly, thwarts our history as a land of opportunity, freedom

The Obama administration has announced that it will begin immigration raids to deport Central American women and children in May and June.  The first round of raids in January affected North Carolina communities, and it appears that in the early days of this round, families in North Carolina have once again been a focus.  These raids have already proven to generate additional apprehension, detention, legal processing and transportation costs, not to mention heightened fear and the associated drain on economic and civic participation.

The targeting of Central American women and children is particularly concerning given the violence that they are fleeing in their home country and the hope for safety that they seek in the United States.  For example, El Salvador and Honduras are on track to reach the world’s highest homicide rate in 2016.  And that metric is borne of countless other crimes and insecurities brought to bear on families of which sadly women and children are often the primary targets. Reports compiled by the Office of the UN High Commissioner for Refugees include stories of domestic violence, constant threats of sexual abuse, extortion, and threats to harm family members by armed criminal groups, including gangs.

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In 2016 already the federal government has ordered 2,194 individuals deported from North Carolina, making our state the sixth highest in the country.  Nearly four hundred of those ordered deported are children.  The cost of this federal effort in North Carolina alone is $51 million, and with the upcoming raids that cost is likely to grow.  These dollars could instead be sent to North Carolina to provide counseling for children arriving with trauma, or could fund any number of investments that provide all communities with access to opportunity and security.

Beyond the costs to government that in the end we all pay, there is a far deeper impact on the individual and a greater effect on the psyche of a community.  Children experience significant trauma from raids, not to mention the additional harm of increased economic hardship and residential instability if they are separated from their parents. Broader communities, whether targets or not, experience the insecurity of not knowing when their neighbor, co-worker or friend could be taken or whether they themselves could be taken by mistake.

Raids are the bluntest of tools available when those in government are responding to a complex economic and social phenomenon. Moreover, Homeland Security Secretary Jeh Johnson’s doubling down on raids during last week’s trip to Central America is disheartening and legally questionable as well. Immigrant rights organizations have already highlighted the legal issues related to asylum and due process issues at hand in the speedy deportations of Central American children and parents this year.

And yet at the most fundamental level, raids fly in the face of what America has said it is—a land of opportunity, of freedom and of security.

2017 Fiscal Year State Budget, NC Budget and Tax Center

Senate budget proposal fails to maintain service levels from Health & Human Services

The Senate’s proposal fails to maintain service levels overall and makes significant reductions to investments that are critical to children’s health and mental health in the Health and Human Services budget, which is supposed to provide core support to the well-being of North Carolinians and health of communities statewide.

Here is an overview of key areas:

  • Increases by less than $150,000 the state’s appropriation to improve Medicaid timeliness by supporting staff to analyze caseload data and develop performance standards.
  • Funds a Medicaid Analytics Pilot at $1.25 million.
  • Cuts various contract services on a department-wide basis by $3.2 million.
  • Commits just $300,000 to Project CARE support for Alzheimer’s Patients and their Families and $200,000 for a No Wrong Door Initiative in the Division of Aging and Adult Services.
  • Eliminates the state’s increased commitment to NC Pre-K ($6.4 million) and Child Care Subsidy ($3.6 million) and instead applies federal funds to these purposes so that current service levels are maintained.
  • Provides $8.4 million in funding for the Program Improvement Plan as a result of the recent review of child welfare.
  • Provides $600,000 in funds for a pilot effort to increase access to Food and Nutrition Services for individuals who are dually eligible for Medicare and Medicaid through outreach and assistance.
  • Increases funding for the Nurse Family Partnership Program by $400,000 in non-recurring funds.
  • Reduces Cherry Hospital Operating costs after delays in construction by $3 million and eliminates funding for the Wright School by $2.1 million to bring their appropriation to $0.
  • Provides $2 million in non-recurring funds to establish one or two child facility-based crisis centers.
  • Provides $1 million for support to Alzheimer’s patients and their families.
  • Reinstates adult optical eye exams with appropriation of $2.1 million.
  • Shifts the Health Choice rebase from recurring to non-recurring funds.

Examples of what is missing from the Senate’s budget in health and human services:

  • Fails to implement Governor’s Task Force for Mental Health and Substance Use recommendations or enhance the community health system’s delivery of mental services.
  • Fails to expand Medicaid to 500,000 North Carolinians.
  • Fails to make progress on child care subsidy rate.
  • Does not expand access to NC Pre-K and child care subsidies that provide quality early education opportunities for young children’s healthy development.
2017 Fiscal Year State Budget, NC Budget and Tax Center

An initial review of General Government in the Senate budget proposal

Like other areas of the Senate budget, the area of General Government makes little effort to significantly change the way in which the state is investing in the efficient and equitable delivery of public services and in strengthening local economies.

The biggest changes from last year’s budget are for salaries and retirement contributions in many administrative offices of state government funded through the General Government. Additional investments in various technological and analytic capacities are also funded through non-recurring allocations, such as tax fraud analysis through a vendor in the Department of Revenue.

Other notable changes in the Senate proposal

  • Restores funding for Human Relations Commission ($545,407) and adds an administrative assistant position.
  • Allocates funds for the administration for the Connect NC Bond by adding 9 staff people.
  • Renames the Youth Advocacy and Involvement Office to the Council for Women and Youth Involvement.
  • Authorizes the Housing Finance Agency to expend receipts to increase access to permanent, community-based integrated housing for individuals with disabilities ($25.6 million).
  • Provides $5 million in non-recurring funds to retrofit and purchase equipment for a regional career and technical education center in Onslow County.
  • Expands in-patient capacity for behavioral and mental health treatment ($12 million in non-recurring funds).
  • Provides $2 million in non-recurring funds to child facility-based crisis centers.

Examples of what is missing in the Senate proposal

  • Provides no additional funding for the Housing Trust Fund or the Workforce Housing Fund, despite rising housing costs and a decline in state investment since the recession.
  • Fails to include funding to expand elections outreach to help ensure fair elections, as was included in the Governor’s budget proposal.
NC Budget and Tax Center

Follow the Money: The Senate once again chooses tax cuts

The Senate released their $22.225 billion budget proposal a little before midnight last night.  Like the House, the proposal represents a 2.26 percent — or $490.3 million — increase over the current 2016 fiscal year budget.

The arbitrary spending target agreed to at the outset of the budget process has led to a whole host of bad decisions in the proposals from the House and Senate.  Most fundamentally, it has meant our leader’s loyalty to severe budget constraint and lopsided tax cuts, which primarily benefit profitable corporations and the wealthy, are making it impossible for them to meet the needs in communities and for families.

While most of the public budget debate this week will be on the spending side (see our initial take here), examining how the Senate pays for their proposal is just as important. They pay for their 2017 budget proposal in the following way:

 To start out, the Senate, like the House, relies on revenue collections coming in above what officials anticipated, money they anticipate agencies will return to the state (known as reversions), and other one-time dollars to help finance the budget.  Revenues are expected to come in above conservative projections by $330.2 million for the 2016 fiscal year. In addition they rely on money that the agencies return through the course of the year through reductions in services or because of changes in costs to delivering services.  Because they left money unappropriated last year, this $175 million is one-time money used in their budget.

  • The Senate contributes $584 million to the Rainy Day Fund. This is double the contribution made by the House, which takes a slightly more pragmatic approach to saving while also meeting needs today.  The Senate’s aggressive effort to contribute to the Rainy Day Fund is ill-timed given the unmet needs in communities.
  • On top of the money that the House expects to carry over at the end of this fiscal year, they expect to receive $22.2 billion in base revenue — an amount that is severely constrained by previously-approved tax cuts. The $22.2 billion projection is a modest 1-percent growth rate over the current fiscal year. This modest growth is “below long-term average growth and typical growth during economic expansions,” as state budget officials pointed out earlier this month.
  • The revenue total is diminished by the sizeable cuts to the personal and corporate income taxes that lawmakers approved over the last few years. On net, the already-approved tax changes (that also include sales tax expansions) are expected to result in a $1.3 billion loss in the upcoming fiscal year.

Perhaps most interesting in the Senate’s availability statement is the decision to double down on tax cuts and the resulting ways in which they seek to hold the cost down. 

  • First, the Senate raises the standard deduction at a cost of $145 million. This approach is more costly and not as well targeted as restoring the state EITC, which does a better job of helping working families and addressing inequities in our tax code.
  • They offset this revenue loss in part by phasing in more services that are subject to the sales tax.  This was the bill that was discussed yesterday in Senate Finance and identifies new services to which the sales tax would be applied and which were not specified in prior law.  The anticipated increase in sales tax collections fully realized under that proposal would be $140 million according to Fiscal Research, effectively eliminating the tax cut delivered through the standard deduction.
  • The other source of revenue for their budget is to eliminate the state contribution to local sales tax distribution by $17.6 million, another blow to local governments across the state.
  • They reduce General Fund availability by another $4 million to further reduce the tax on airplanes and boats and repeal certain service contracts.
  • They take $3 million from the NCGA Special Fund which was intended for use to support the operation of the General Assembly.
  • They boost General Fund availability by nearly $1.7 million due to transfers from the Insurance Regulatory Fund and the Treasurer’s Office.

See the chart below for a summary.

follow the money senate

2017 Fiscal Year State Budget, NC Budget and Tax Center

Senate budget proposal fails to meet state needs: Statement from Alexandra Sirota, Director, Budget and Tax Center

RALEIGH (May 31, 2016) — The Senate seems to have taken the most extreme approach to the state budget yet, putting forward a proposal that fails to meet community and family needs and holds our state back from a brighter future.

While we have yet to see the full details, it is very likely that the Senate has once again cut core public services in order to facilitate a new round of income tax cuts that cost $200 million—nearly half the cost of their teacher pay plan. These cuts are just one more blow in the year after year onslaught on public institutions as the Senate continues their commitment to flawed economic theories that aren’t helping our communities or our economy.

The Senate is irresponsible at best in pledging commitments to North Carolinians’ priorities today without ensuring that the state can continue to prioritize them in future years. They believe that North Carolinians won’t figure out that they have sacrificed our state’s future at the altar of tax cuts.

The reality is that North Carolinians know that the path to a better future is built on the middle ground through shared commitment to good schools, protection of air and water quality, support for main street development and other building blocks of a strong economy and healthy community. The House must reject the Senate’s flawed approach and get much closer to meeting the needs and priorities of North Carolinians across the state.