NC Budget and Tax Center

The Charlotte Observer reports of the strain on the state’s court system in the wake of state budget cuts in recent years. The state’s court system is expected to run out of funding for juror pay by April of next year, the Charlotte Observer highlights.

The ability of the state’s court system to operate effectively has been increasingly challenged amid cuts in state funding over the years. While other states have adopted technology and incorporated electronic filing systems, North Carolina continues to use a paper-based system, which slows down the judicial process. The time taken to complete civil and criminal cases has increased in recent years, the Charlotte Observer article notes, resulting in a judicial system that is inefficient, more costly, and less customer-friendly.

State lawmakers quoted in the article note their unawareness of the pending funding shortage for juror pay and state that the General Assembly is being asked for money that it doesn’t have. This is increasingly clear as stories throughout the state have highlighted yet another announcement that the state’s revenue collections are below projections.  Official estimates now put the revenue shortfall for the current fiscal year at $190 million.

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NC Budget and Tax Center

An insightful interactive map created by the Center on Budget and Policy Priorities shows the extraordinary growth in imprisonment rates nationwide. For North Carolina, the number of individuals under state or federal correctional authority nearly tripled from 1978 to 2013, increasing to 356 from 214 individuals per 100,000 residents over this time period. This growth in the state’s imprisonment rate is accompanied by increased state corrections spending – rising from $538 million in 1978 up to $1.7 billion in 2013 when adjusted for inflation.

Growth in the state’s imprisonment population has been costly for North Carolina and nationally. More and more state dollars for state corrections spending has contributed to fewer dollars available for public schools and other public investments that serve as the foundation of economic growth. In 2011, state lawmakers passed the Justice Reinvestment Act, which aims to manage the state’s prison population growth by creating better outcomes for offenders and, in turn, reduce recidivism. However, the state’s ongoing revenue crisis resulting from costly tax cuts and continued budget cuts limit opportunities for proven, cost-effective initiatives, such as drug treatment courts.

What is clear is that state corrections operations in North Carolina consume a significant amount of resources, and individuals, at the expense of other important public investments.

NC Budget and Tax Center, Poverty and Policy Matters

This school year, high-poverty schools across North Carolina will provide breakfast and lunch meals at no cost to students. As part of a laudable effort to eliminate child hunger, nearly 650 public schools have adopted a universal meal program that ensures that every child receives two nutritious meals each day and show up to class ready to learn. These schools serve more than 310,000 students – around 1 in every 5 students in public schools.

Schools in North Carolina that have adopted a universal meal program are part of a nation-wide initiative known as Community Eligibility, which aims to increase participation rates in breakfast and lunch programs in high-poverty schools. Children who show up to class with food in their stomach are inclined to be more focused and attentive, less distracted, and more engaged. Simply put, a child well-fed is better prepared to learn. Read More

NC Budget and Tax Center

North Carolina officials will soon have spent all available financial incentives the state offers to businesses that are considering locating or expanding in the state. Each year the state awards millions of dollars in subsidies to businesses through its Jobs Development Investment Grant (JDIG) program.

The state is now one project announcement away from spending all of the $22.5 million in funding allocated to JDIG for the current year, accordingly to state Commerce Secretary Sharon Decker. Governor McCrory is being urged by proponents to call a special legislative session before January 2015 to increase funding for the JDIG program. Yet, this is coming at a time when state revenue collections are $62 million below projections for the first quarter of the current fiscal year as the cost of the tax plan passed last year continues to increase. The reality is that absent additional revenue, increasing funding for the JDIG program means cuts in other areas of the state budget to pay for the additional spending.

Secretary Decker states that “Tax reform has helped us because we are no longer the highest in the Southeast, and that is great” and goes on to assert “But, we will not be competitive for those jobs without JDIG.” Yet, it is tax reform that was supposed to spur job creation and boost the economy, but is nevertheless hindering our ability to invest in JDIG and core public services that are stronger determinants of sustainable job creation and economic growth. State revenue collections are $62 million below projections for the first quarter of the current fiscal year and as we have written elsewhere, the cost of the tax plan for the current fiscal year could be more than $1 billion. The tax plan passed last year, sold as a job-creation package, reduced the state’s personal and corporate income tax rates to largely benefit the wealthy and profitable corporations. Still, more corporate subsidies are being asked for in the name of job creation.

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NC Budget and Tax Center

Voters in Mecklenburg, Guilford, and Rockingham counties each rejected a ballot initiative to increase its local sales tax by one-quarter cent. Under these referendums, consumers would have paid 25 cents in additional sales tax per $100 spent on goods and services subject to sales tax. The sales tax increase was expected to generate around $32 million for Mecklenburg County, $14 million for Guilford County, and $1.5 million for Rockingham County in additional local revenue each year.

This rejection of a sales tax increase highlights the tenuous reality of funding for public education in North Carolina. Last year, state lawmakers passed a tax plan that significantly reduced revenue available for public schools and other important public services. The tax plan has proven to be more costly than state policymakers’ initial estimate and the implications of this self-imposed revenue crisis will reverberate across the state in the years ahead. Meanwhile, some local governments are bracing for the revenue losses associated with the elimination of the local privilege license tax, which goes into effect next July.

Of the three counties rejecting a proposed sales tax increase, Mecklenburg County has experienced significant growth in its student population in recent years. Charlotte-Mecklenburg Schools (CMS) is the second largest, and one of the fastest growing school systems in the state. For the most recent 2013-14 school year, more than 144,000 students were enrolled in CMS, with nearly 10,000 additional students entering CMS classrooms since 2008. Guilford County has experienced modest growth in its student population (1,326 additional students) while the student population for Rockingham County has declined (990 fewer students) since 2008. Read More