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.

NC Budget and Tax Center

This tax season marks the final year North Carolina taxpayers will file their income taxes under the state’s old tax code. By next year the increased tax load for many North Carolina taxpayers will be apparent as a result of the tax plan passed by state leaders last year.

Today, the Budget & Tax Center released a report that highlights how the tax plan passed last year shifts the responsibility of paying for public investments to middle- and low- income taxpayers while providing generous tax cuts to the wealthy and profitable corporations. The report highlights various elements of the tax plan that fundamentally changes the state’s tax system and, subsequently, who pays taxes in North Carolina.

The tax plan passed last year replaces the existing graduated personal income tax rate structure with a flat tax rate that will largely benefit wealthy taxpayers who will now pay a much lower income tax rate. A number of tax provisions that benefit middle- and low-income families – such as the personal exemption and child and dependent care credit – are eliminated under the tax plan. Read More

NC Budget and Tax Center

What’s the deal in Kansas these days? That’s a question Governor McCrory and North Carolina’s state leaders should be asking themselves.

After passing huge tax cuts in recent years, the subsequent unimpressive economic performance and continued disinvestment in core public investments in Kansas serve as a cautionary tale for North Carolina.

A recently released report by the Center on Budget and Policy Priorities (CBPP) highlights how Kansas’ economic performance has failed to live up to the promises made by Governor Brownback and his legislative allies. Kansas passed huge income tax cuts in 2012 that reduced annual revenue for public investments by more than $800 million for FY 2014. Proponents claimed the tax cuts would boost the state’s economy.

Last year North Carolina followed Kansas’ lead when state leaders passed and Governor McCrory signed into law a tax plan that includes huge income tax rate cuts and reduces annual revenue by more than $650 million once all tax changes take effect. Here too, the governor and proponents claimed that cutting taxes will boost North Carolina’s economy.

So how is Kansas faring these days?

Kansas hasn’t experienced anything close to an economic surge in the wake of the huge tax cuts. Massive revenue loss has meant continued state funding cuts to core public investments – public schools, colleges and universities, and healthcare services, for example. Read More

NC Budget and Tax Center

As our state leaders continue to look for ways to give more and more tax cuts to profitable corporations, these corporations continue to find ways to avoid paying their fair share of taxes. It is a win-win proposition: Heads they win; Tails they still win!

A report released today by the Institute on Taxation and Economic Policy and Citizens for Tax Justice finds that 269 Fortune 500 companies collectively avoided paying $73.1 billion in state corporate income tax between 2008 and 2012. Nine of these multi-state corporations are headquartered in North Carolina and earned more than $51 billion in combined profits during this period.

The nine NC-based multi-state corporations paid an average overall corporate income tax rate of just 3.7 percent, which is well below North Carolina’s 6.9 percent statutory rate at the time. Unfortunately, our state leaders prefer to focus on optics rather than reality. Read More

NC Budget and Tax Center

“We can’t afford it.” This is the prevailing refrain of state leaders nowadays in their efforts to explain away or rationalize their waning support for investing in North Carolina’s future.

Whether the issue is pay raises for K-12 teachers and other state employees, supporting targeted economic development initiatives, protecting the state’s natural resources and environment, one repeated excuse is that revenue is not available for such public investments.

This excuse was used once again in a memo by Art Pope, State Budget Director, in response to the UNC Board of Governors’ (BOG) 2014-15 budget request. In the memo, Pope informs the BOG that its budget “simply is not realistic” and warns that funding the respective budget request “would require the Governor and General Assembly to make major reductions in other state agencies and programs, such as our courts, the “K-12” public schools, and health care.

North Carolina is NOT broke. The costly tax plan passed by the NC General Assembly and signed into law by Governor McCrory last year has created a self-imposed budget challenge. This challenge is occurring, as Pope acknowledges, even as the economy is improving. Read More