NC Budget and Tax Center, Poverty and Policy Matters

Durham Public Schools (DPS) is expected to adopt a breakfast program at no cost to students and families, a recent Herald Sun articles reports. Under the program, all DPS students could eat breakfast at school at no cost, regardless of their family’s financial status.

In order to combat the stigma associated with receiving free or reduced breakfast, DPS plans to use a catchy slogan, “Breakfast is on us.”

By eliminating the stigma associated with the existing free and reduced meal programs offered only to students from low- and moderate-income families, students are more likely to participate in school meal programs, which can have a positive impact on their ability to succeed academically. The Herald Sun article notes that national data show that school districts that provide universal breakfast programs at no cost to students have higher test scores, fewer disciplinary problems and more focused students.

Many schools across North Carolina have the option to offer breakfast and lunch programs at no cost to students and families this upcoming school year. Nearly 300,000 students in high-poverty schools across North Carolina could potentially benefit from an initiative, known as Community Eligibility, which ensures every child in these schools receives two nutritious meals each day so that they are ready to learn all day. Read More

NC Budget and Tax Center

State policymakers return to Raleigh tomorrow challenged with addressing a budget gap of $335 million for the current fiscal year as a result of a huge forecasted revenue shortfall for the current fiscal year and a Medicaid shortfall. Next year, state policymakers face a budget gap of around $228 million, which could reach as high as $637 million based on higher costs estimated from the personal income tax changes.

In the face of underperforming revenue, today the General Assembly’s Revenue Laws Committee voted favorably to pursue changing an arcane tax policy that would FURTHER reduce annual revenue by $10 million next year, FY 2015, and by more than $23 million for FY 2016.

In pursuit of ultimately shifting to a single sales factor apportionment formula, today the Revenue Laws Committee voted to give greater weight to the sales component in determining the amount of state income taxes paid by corporations. The state’s current tax system uses a formula that considers a corporation’s property, payroll, and sales in North Carolina. The tax change would give two-thirds weight to the sales component.

This tax change would create winners and losers. Around 3,000 corporations would see their taxes decrease under the tax change while around 6,000 corporations would see their taxes increase, according to analysis by the General Assembly’s Fiscal Research Division.

Proponents of this tax change claim that doing so will improve the state’s business climate by making expansion of property and payroll in the state more attractive to businesses. Other states that have adopted an SSF formula based on this premise have not seen this happen, however, and there is no reason to believe that North Carolina will experience a different outcome.

Furthermore, reducing the amount of revenue available for public investment will make the self-imposed budget challenge resulting from the tax plan passed last year worse. And everyone will pay the price because this will require further reductions to investments in educating our children, maintaining our infrastructure and protecting the safety and well-being of North Carolina families—investments that are needed to support a strong economy.

NC Budget and Tax Center

When state policymakers convene next week for the 2014 legislative session the budget debate will likely be at center stage. The most recent consensus revenue forecast signal that boosting investment in critical public services will not be an option unless state policymakers take a new direction.

Today, the Budget & Tax Center released a report that highlights opportunities for legislators to begin bolstering investments in various areas of the state budget that help create pathways to the middle class, strengthen communities across the state, and alleviate the economic struggles of North Carolina families. These opportunities include boosting investments in education, workforce development initiatives, safe and healthy communities, and environmental protection.

The BTC report also highlights the significant challenge that legislators face if they choose to seize this opportunity to change the state’s direction and boost investments in North Carolina’s future. The tax plan enacted by policymakers last year reduces the amount of revenue for public investments in the years ahead. When policymakers return to Raleigh next week, they will have to address a budget gap of $335 million as a result of a forecasted revenue shortfall for the current fiscal year and a Medicaid shortfall.

The budget challenge continues beyond this fiscal year. Next year, state policymakers look to face a budget gap of at least $228 million according to the consensus revenue estimate. This budget gap, however, could reach as high as $637 million based on cost estimates that identify higher costs for the personal income tax changes in last year’s tax plan.

The reality is that policymakers must revisit the tax plan in order to bolster schools, health care, and other things that help strengthen North Carolina’s economy. Under the inadequate tax system created last year, every year going forward, policymakers are likely to struggle to fund these needed supports to a strong economy.

NC Budget and Tax Center

At a time when an increasing number of jobs in the state are expected to require some level of postsecondary training, North Carolina families and students have to shoulder more and more of the cost of a college education.

A report released today by the Center on Budget and Policy Priorities highlights that state spending per student for higher education in North Carolina is 25 percent below pre-recession levels when adjusted for inflation. Meanwhile, average tuition at North Carolina’s public, four-year colleges increased by more than 34 percent during this time period.

Some of the outcomes from these budget cuts have been well-documented on North Carolina’s campuses. For example, in the 2014 academic year, state funding cuts led NC State to eliminate 187 full-time equivalent positions and 27 positions from its library system, the report highlights. UNC-Chapel Hill has eliminated 493 positions, cut 16,000 course seats, increased class sizes, cut four of its seven centrally supported computer labs, and eliminated two distance education centers. Read More

NC Budget and Tax Center

Nearly 300,000 students in high-poverty schools across North Carolina could potentially benefit from an initiative that ensures every child in these schools receives two nutritious meals each day so that they are ready to learn all day.

This nationwide initiative, known as the Community Eligibility Program (CEP), allows high-poverty schools to eliminate school meal applications and offer breakfast and lunch to all of their students at no charge. It aims to increase participation rates in breakfast and lunch programs by eliminating the stigma associated with the existing free and reduced meal programs offered only to students from low- and moderate-income families. These students may be reluctant to participate in the free- and reduced lunch program and go hungry, which can adversely impact their ability to succeed academically.

Schools in other states that have already implemented free breakfast and lunch programs for all students in high-poverty schools have experienced positive outcomes. In schools in Illinois, Kentucky, and Michigan that adopted CEP for two years, daily lunch participation rose 13 percent. Daily breakfast participation in these schools rose 25 percent.

For the 2014-15 school year, eligible schools across the U.S. will be able to implement CEPs. In North Carolina, nearly 300,000 students in around 1,600 schools could potentially be served by the program.

This initiative can serve as a powerful option to help alleviate childhood hunger. Ensuring that students receive nutritious meals, in turns, helps enhance the overall quality of students’ classroom experiences. Students are inclined to be more focused and attentive, less distracted, and more engaged when they have enough to eat.

The CEP presents a mutually beneficial investment that can provide immediate and long-term benefits – for students, schools, families, and the larger Tar Heel state. Building a workforce that can compete for good-paying jobs and meet the demands of a 21st century economy requires that students show up to the classroom ready to learn.

Ensuring that more students participate in breakfast and lunch programs is one way to help promote a quality education for all North Carolina students. North Carolina can invest in its future today by encouraging eligible schools to adopt CEP beginning with the upcoming school year.