NC Budget and Tax Center, Trump Administration

Report: “Budgets” a top 5 issue for cities, particularly 98% of all towns in North Carolina (and why Trump’s budget could bankrupt them)

President Trump and the NC Senate have already proposed drastic budgets that would hurt millions of low and middle-income households across the country and here in North Carolina. If all politics is local, it is important to listen to what cities and towns have to say.

The 2017 State of the Cities report released this week by the National League of Cities (NLC) finds that economic development, public safety, infrastructure and budgets are the top issues for communities around the nation.

The report points out that ‘budgets’ are particularly a top issue for states in the South, especially in towns and cities that have populations under 100,000. For NC, this is very concerning considering that 98 percent of all cities and towns in the state, spread across 89 mainly rural counties, have populations under 100,000. Moreover, 75 percent of all cities and towns in North Carolina have populations under 5,000. In other words, 543 cities and towns in NC – out of 552 – are highly likely to be concerned about their budget and therefore see it as a top issue.

The report points out that ‘budgets’ has remained one of the top 4 issues for cities each of the past 4 years.

Here’s the full list of the top 10 issues that matter to cities in 2017:

  1. Economic Development: (Job creation, business attraction, downtown development)
  2. Public Safety: (Investing in police and fire departments, increasing transparency)
  3. Infrastructure: (Addressing maintenance issues with roads and aging infrastructure)
  4. Budgets: (A focus on planning for the future amid grand funding concerns)
  5. Housing: (Affordable housing, homelessness, and zoning ordinances)
  6. Education: (Preparing the workforce of the future)
  7. Energy and Environment: (Impact of climate change and the need to be resilient)
  8. Health: (Addressing the opioid crisis and creating a culture of health)
  9. Demographics: (Countering national fervor by embracing diversity)
  10. Data & Tech: (Becoming innovative by integrating technology into city operations)

Trump’s Proposed Budget Could Bankrupt Cities and Towns

As it pertains to budgets, it is worth noting the National League of Cities issued the following statement this week after President Trump released his proposed budget:

“The administration’s budget proposal would be devastating to cities and towns. No community in America would be better off with this budget, and it could bankrupt smaller cities and towns. It does nothing to create jobs in our communities, and violates the president’s core campaign promise to lift up Americans in communities across the nation.

The White House ignored more than 700 city officials who urged the administration to protect crucial programs, including Community Development Block Grants, TIGER grants and the HOME Investment Partnership Program. These vital programs allow communities to invest in public safety, economic development and infrastructure, and create private-sector jobs.

The budget proposal would have a disproportionate impact on America’s small cities and towns, whose budgets are already stretched thin. In these communities, the programs being targeted are a lifeline for maintenance and investment. For those communities, this budget would spell disaster — and, in many cases, bankruptcy.

As the leaders of America’s cities, we call on Congress to throw out this budget proposal and develop a new plan focused on building prosperity, expanding opportunity and investing in our future. Congress must reject this budget proposal or risk derailing local economies nationwide.”

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.
NC Budget and Tax Center, Trump Administration

President Trump’s budget does not add up ($2 trillion math error)

President Trump’s proposed budget was unveiled earlier this week and it includes a $2 trillion math mistake.

According to the proposed budget, “a comprehensive overhaul to our tax code will boost economic growth and investment”, and assumes an aggressive 3 percent growth in the economy. This of course differs significantly from the Congressional Budget Office (CBO) projection of moderate 1.9 percent economic growth over the next ten years reported in its most recent budget and economic outlook. [Note: this large a gap between an administration’s growth forecast and CBO’s is unprecedented (see graph).]

Due to the exaggerated growth assumption, Trump’s budget assumes a $2 trillion increase in revenue through economic growth that will balance the budget. However, the math does not add up as the Trump tax cut is also supposed to pay for the Trump tax cuts. So the $2 trillion is a double-counting error.

In other words, the assumed $2 trillion from higher growth is a double-count as it pays for the Trump tax cuts, and then it pays again for balancing the budget.

Overall, it is clear that Congress must step up and craft a budget that actually adds up and is grounded in serving all of the American people.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.
NC Budget and Tax Center, Trump Administration

Initial responses to Trump’s budget: ‘This budget isn’t worthy of the American people’

[Note: Yesterday, ahead of the White House unveiling of President Trump’s 2018 fiscal year budget we released a blog on What to expect in Trump’s 2018 budget (and what it means to North Carolina) and a blog on the “Significant positive impacts” under ‘The People’s Budget’.]

On Tuesday President Trump released the first full budget proposal of his presidency. Various national organizations have already released statements on Trump’s proposed budget and the consensus is loud and clear: President Trump’s budget is not good for the American people and relies on various assumptions that are highly unlikely to occur.

The Center on Budget and Policy Priorities stated:

“President Trump’s new budget should lay to rest any belief that he’s looking out for the millions of people the economy has left behind.  He proposes steep cuts in basic health, nutrition, and other important assistance for tens of millions of struggling, low- and modest-income Americans, even as he calls for extremely large tax cuts for the nation’s wealthiest people and profitable corporations … This budget isn’t worthy of the American people, and it betrays the millions of struggling Americans who placed their hopes in Donald Trump.”

Read more

NC Budget and Tax Center, Trump Administration

Analysis: “Significant positive impacts” under ‘The People’s Budget’ proposed by the Congressional Progressive Caucus

The White House plans to unveil President Trump’s detailed 2018 budget tomorrow. While the people wait for its release it is worth noting that earlier this month the Congressional Progressive Caucus (CPC) released ‘The People’s Budget: A Roadmap for the Resistance’, which contains their plan for what the U.S. budget should be. Their budget was the first release in the 2018 fiscal year budget season, coming before either the President’s budget or any proposal from the Budget Committees.

“It’s one thing to oppose President Trump and expose his broken promises to workers, but it’s also important to lay out a positive path forward,” said Rep. Pocan. “The Congressional Progressive Caucus’s budget is a plan to actually help working Americans who have felt left behind by an economy rigged against them. Our budget is a roadmap for the resistance, investing in the progressive priorities and economic, kitchen table issues that matter to real people: infrastructure to create jobs; education to help our kids reach their full potential; and access to affordable health care.”

Here’s what two prominent organizations had to say after they assessed CPC’s ‘The People’s Budget’.

The Committee for a Responsible Federal Budget, a nonpartisan, non-profit organization committed to educating the public on issues with significant fiscal policy impact, stated: “The [CPC] budget certainly contains a lot of tax and spending increases, but we welcome budget alternatives that improve the debt situation.” According to Committee’s analysis, ‘The People’s Budget’ “would represent a substantial improvement over our current debt trajectory.

The Economic Policy Institute analyzed and scored CPC’s budget and stated: “We find The People’s Budget would have significant positive impacts.” Specifically, the Economic Policy Institute found The People’s Budget would:

  • Improve the economic well-being of low- and middle-income families. The People’s Budget would boost gross domestic product (GDP) by 2 percent and employment by 2.4 million jobs in the near term. This would both close the output gap as measured by the Congressional Budget Office (CBO) and further push unemployment down, to 4 percent.
  • Smartly cut spending. The budget focuses on modern security needs by repealing sequestration cuts and spending caps that affect the Defense Department but replacing them with similarly sized funding reductions that are less front-loaded and will allow more considered cuts.
  • Make necessary public investments. The budget finances roughly $281 billion in job-creation and public-investment measures in calendar year 2017 alone and roughly $710 billion over calendar years 2017–2018.
  • Facilitate economic opportunity for all. By expanding tax credits and other programs for low- and middle-wage workers, boosting public employment, and offering incentives for employers to create new jobs, The People’s Budget aims to boost economic opportunity for all segments of the population.
  • Strengthen the social safety net. The People’s Budget strengthens the social safety net and proposes no benefit reductions to social insurance programs.
  • Increase tax progressivity and adequacy. The budget restores adequate revenue and pushes back against income inequality by adding higher marginal tax rates for millionaires and billionaires, equalizing the tax treatment of capital income and labor income, restoring a more progressive estate tax, eliminating inefficient corporate tax loopholes, among other tax policies.
  • Reduce the deficit in the medium term. The budget increases near-term deficits to boost job creation, but it reduces the deficit in FY2019 and beyond relative to CBO’s current law baseline.

Given the fact that where our leaders decide to invest matters to our well-being, it is vital that Congress develop a 2018 fiscal year budget that is grounded with a goal of serving and protecting all people.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center, Trump Administration

What to expect in Trump’s 2018 budget tomorrow (and what it means to North Carolina)

The White House plans to unveil President Trump’s detailed 2018 budget tomorrow.

Ever since the administration released their 2018 budget blueprint (skinny budget) back in March, we have conducted analysis that shows various ways in which North Carolinians would be harmed under Trump’s proposed budget. In case you missed this analysis, below are links to the recent posts in our ‘Federal Budget Blog Series’ (and also a preview of what’s to come): Read more