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.
NC Budget and Tax Center

Statement on Senate press conference announcing budget proposal

At a time when lawmakers have the opportunity to do more to help everyone in North Carolina and every community thrive, they have squandered it by proposing another round of ineffective tax cuts for the few.

Late tonight, we expect the full details of how Senate lawmakers pay for their tax cuts while proposing modest increases for their priorities, including raising pay for some teachers, principals and state employees. In the meantime, it remains unclear how the Senate can cut taxes to the tune of more than $800 million, set aside $300 million in savings, and increase investments as detailed in their press conference without relying on one-time money or cutting other areas of the budget.

We know that many of the priorities identified require a greater commitment of state funds to fully realize their goals: raising the age of juvenile jurisdiction, addressing the damage of Hurricane Matthew,  and investing in small towns and rural communities.

It is clear that the Senate can’t commit to addressing the priorities of North Carolinians while it is committed to these tax cuts for the wealthy.

Priorities like ensuring that all children are safe and protected from abuse; that each child has access to a quality public education from early years through to careers. Priorities that would ensure work is rewarded with pay that allows families to make ends meet. And every community—rural and urban—is given the tools to thrive.

The Senate can only achieve these goals if lawmakers stop pursuing more income tax cuts for the wealthy and focus on actually investing in our middle class and all of our communities.

2018 Fiscal Year State Budget, NC Budget and Tax Center

More revenue presents an opportunity to invest, not a sign to cut taxes for the wealthy

Senate leaders and their supporters at the conservative, D.C.-based Tax Foundation argue that the state’s revenue collections are a sign that North Carolina can cut income taxes again for the wealthy and profitable corporations. We can’t expect to continue to compete and deliver a better quality of life to North Carolinians if we continue the march to zero income tax.

The state’s Fiscal Research Division has conservatively estimated $680 million in rising costs over the next fiscal year due to increased enrollment in public schools and universities, rising health care costs and requirements to pay down debt and match federal dollars for rebuilding Eastern North Carolina.  This figure does not include the investments with bipartisan support that are required to protect children in the foster care system, expand access to job training (especially in rural communities), increasing slots in early childhood programs, and fully addressing the housing, small business and agricultural damage of Hurricane Matthew.

Cutting taxes again to the tune of $1 billion in a way that primarily benefits the state’s wealthiest and profitable corporations is fiscally irresponsible in the face of these identified needs. It fails to consider as well the unknown costs of a federal budget that contemplates at least $340 million in cuts to federal grants for North Carolina. Read more