NC Budget and Tax Center

Proper planning needed: Within two years there will be more people ‘over 60’ in N.C. than ‘under 17’

The aging of our societies is one of the greatest success stories of the last one hundred years. However, with that success also come new long-term challenges and opportunities. Today, North Carolina is facing an extraordinary demographic makeover in the age of our population. The latest Prosperity Watch analysis from the NC Budget and Tax Center puts it like this:

“In less than two years, in 2019, our state will have a population with more people aged over 60 than under 17. Furthermore, between now and 2027, the proportion of the population aged 60 and over will only continue to grow – rising from 2.2 million to 2.8 million people, an increase of 28 percent.

Ten years ago, in 2007, a total of 31 counties in the state had more people aged over 60 than under 17. Since then, that number has more than doubled, and 78 counties now fit that description. However, what is most surprising is that this trend is not reversing anytime soon – by 2027, a total of 92 counties in North Carolina will have more people over 60 than under 17.”

That the state’s population is aging at this rapid pace requires policymakers and businesses across the state to plan and prepare while we still have the window of opportunity in front of us. If prudent planning in this area is accomplished we can minimize profound negative impacts on our economy and state budget in the coming years.

Policymakers must remember that government can have a constructive role in raising awareness about the implications of an aging society and engaging all sectors in preparing for the associated changes. As North Carolina continues to age here are three basic goals that should be accomplished in order for our state to thrive and be competitive in the coming years:

  • First, we must enable older adults to remain independent and age in the place of their choice with appropriate services and supports that enable a healthy lifestyle. Protecting the safety and rights of older and vulnerable adults, and preventing their abuse, neglect and exploitation is vital.
  • Second, we must ensure adequate investments today in the education of our children and their teachers in order to ensure the state’s workforce of tomorrow is prepared to lead in a complex and global economy.
  • Third, we must realize that migration into our state will be needed in order for us to maintain a strong workforce that will help sustain the state’s economy in the coming years.

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

Environment, NC Budget and Tax Center

Here’s how much climate change will cost each county in North Carolina

Climate change is not just an environmental issue, but an economic issue as well that impacts all 100 counties across North Carolina. As the country experiences an increasing number of billion-dollar disasters, the challenge for us all is to minimize the harm to families and communities and plan for the future. Since 1980, we have seen the number of billion-dollar weather and climate disasters in the U.S. increase by 400 percent. Profound weather shifts from rising sea levels and flooding to drought and forest fires require effective preparation, planning and response from our leaders.

The financial impact is increasingly relevant to county and state governments as federal officials, despite increasing disasters, consider scaling back federal assistance, and push states to take on greater responsibility for disaster preparation and recovery with their own resources. Here in North Carolina after Hurricane Matthew displaced thousands of families and caused $4.8 billion in damages across 50 counties we all saw that the federal withdrawal approach did not work and instead hurt our state. North Carolina policymakers have made just a $300 million commitment to Eastern NC to date despite documented unmet need of nearly $900 million.

A recent study published by Science that represents a major breakthrough for the field of climate economics finds climate change will aggravate economic inequality in the U.S. as there are “enormous disparities in how rising temperatures will affect American communities.” After simulating the costs of global warming in excruciating detail, modeling every day of weather in every U.S. county during the 21st century, the study finds the “South and lower Midwest will bear the brunt of the economic costs associated with climate change through the end of the century.” Coastal communities are projected to take a toll from rising seas and strengthening hurricanes while the South will be hurt by a decline in farming caused by rising temperatures, along with increasing energy demands to keep up with the heat.

For North Carolina this means many poor and rural parts of the state will be affected the most. Below is a sortable table that shows how much of its income each county in North Carolina stands to lose through the end of the century; linking climate projections with economic effects like mortality, labor productivity, energy demand and crop yields. Based on the analysis it is clear that in order to protect North Carolina’s economy and quality of life for people today and future generations, the state and all 100 counties must be cognizant of climate change and plan for its economic effects – especially in communities most in need.

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

Climate Change Cost in Each County of North Carolina

CountyTotal Estimated Damages: % of GDP
(percentage of economy lost)
Agricultural Damage
(changes in average yields for
corn, wheat, soybeans and cotton)
Alamance6.7-32.8
Alexander4.7-31.4
Alleghany-2.60
Anson9.1-19.9
Ashe-1.20
Avery-1.50
Beaufort6-5.5
Bertie89.4
Bladen8.9-22.4
Brunswick6.3-22.1
Buncombe3.60
Burke5.9-35.4
Cabarrus5.8-33.7
Caldwell6.6-35
Camden3.7-12.8
Carteret5.7-22.4
Caswell8.2-20.4
Catawba5.4-21
Chatham4.6-27.6
Cherokee8.3-47.3
Chowan7.521.4
Clay1.9-13.7
Cleveland6.8-5.4
Columbus8.4-18.4
Craven5.7-1.7
Cumberland5.4-15.9
Currituck4.2-11.2
Dare3.90
Davidson6.2-31.1
Davie3.7-25.1
Duplin7.9-17.2
Durham4.6-15
Edgecombe8.91.8
Forsyth5-30.1
Franklin5-21.3
Gaston5.56.7
Gates7.1-2
Graham5.10
Granville5.2-16.3
Greene8.8-9.1
Guilford4.7-25.7
Halifax718.1
Harnett6.8-11.6
Haywood-0.734.2
Henderson2.8-38.6
Hertford9-3.7
Hoke7.6-7.5
Hyde7.8-6.2
Iredell3.2-21.3
Jackson-0.70
Johnston4.9-9.3
Jones7.310.4
Lee6.8-11.6
Lenoir8-5.7
Lincoln5.3-22.6
Macon2.40
Madison2.60
Martin822.6
McDowell-0.517.9
Mecklenburg3.3-18.7
Mitchell-0.20
Montgomery7.6-4.4
Moore6.1-18
Nash6.6-5.8
New Hanover5.9-39.8
Northampton7.816.2
Onslow3.6-11.8
Orange3-29.4
Pamlico6.9-10.5
Pasquotank6.2-14.3
Pender7.9-18.3
Perquimans6.72.9
Person5-15.5
Pitt5.8-7.5
Polk6.9-1.5
Randolph6.5-26
Richmond9.20.6
Robeson11-24.7
Rockingham6.5-15.2
Rowan7.7-27.9
Rutherford8.43.7
Sampson7.7-8.8
Scotland10-7.1
Stanly7.7-10.4
Stokes4.7-19.6
Surry3.5-22.7
Swain2.70
Transylvania8.4-66.9
Tyrrell7.9-17.3
Union4.5-26
Vance8-27.8
Wake3.1-24.5
Warren8.3-14
Washington8.2-12.5
Watauga-0.60
Wayne6.9-15.9
Wilkes4.9-50.1
Wilson7-9.3
Yadkin4.7-24.4
Yancey-8.10
NC Budget and Tax Center, Trump Administration

In N.C., 42% of Trump’s proposed tax cuts would go to the few making more than $1 million

On July 27, the White House released a statement on Tax Reform that stated tax-writing committees in Congress would work this fall to “develop and draft legislation that would result in the first comprehensive tax reform in a generation.” The White House statement was blunt in stating “the American people have elected a President and Congress that are fully committed to ensuring that ordinary Americans keep more of their hard-earned money.”

However, a newly released report confirms that the White House is not really interested in tax reform that helps “ordinary Americans”. Instead, under President Trump’s proposed tax cut plan, “ordinary Americans” will hardly benefit at all, as nearly half of Trump’s proposed tax cuts would go to people making more than $1 million annually, according to the report by the Institute for Taxation and Economic Policy (ITEP).

As it pertains to North Carolina, the new report is clear in pointing out:

“A tiny fraction of the North Carolina population (0.5 percent) earns more than $1 million annually. But this elite group would receive 42.4 percent of the tax cuts that go to North Carolina residents under the tax proposals from the Trump administration. A much larger group, 50.8 percent of the state, earns less than $45,000, but would receive just 5.9 percent of the tax cuts.

The first group, the millionaires, would receive an average tax cut of $150,550 in 2018, equal to 6.4 percent of their income. The second group, those making less than $45,000, would receive an average tax cut of just $190, equal to 0.8 percent of their income.”

That report concludes with the confounding fact that the Trump tax principles would also reduce revenue in the U.S. by at least $4.8 trillion over 10 years. If this drastic approach took effect at the federal level it would put NC and our local governments at risk, as our state would not be able to sustain vital programs that help people thrive due to the costly tax cuts at both the federal and state level. In a recent brief the NC Budget & Tax Center stated: “The costly tax cuts in the new [NC] budget represent missed opportunities by lawmakers to ensure that the needs of a growing state are adequately met and to boost public investments that promote opportunity and broadly shared prosperity.”

If you are wondering how all of this is possible, here are the known Trump tax cut proposals that would primarily help the super-rich and would reduce U.S. revenues by $4.8 trillion over 10 years:

– Repeal of the 3.8 percent tax on investment income for the rich.
– Repeal of the Alternative Minimum Tax.
– Repeal of personal exemptions and doubling of the standard deduction.
– Replacement of current income tax brackets with three brackets: 10 percent, 25 percent, and 35 percent.
– Elimination of all itemized deductions except those for charitable giving and home mortgage interest.
– Special tax rate (15 percent) for businesses that do not pay the corporate income tax.
– New deduction and tax credit for child care.
– Repeal of special tax breaks for businesses and reduction in the corporate income tax rate from 35 percent to 15 percent.
– Repeal of the estate tax.

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

A look at the seven N.C. Counties that will be on the Eclipse’s “path of totality”

Next Monday, Aug. 21, the continental U.S. will experience a total eclipse of the sun from coast to coast for the first time in 99 years, and North Carolina is one of the 14 states that will be in the eclipse’s “path of totality.” Across the U.S., 290 counties will be in the path of totality, and seven of these counties are here in our state.

The seven N.C. counties that will be in the path of totality include: Cherokee, Graham, Swain, Clay, Macon, Jackson and Transylvania.

That the solar eclipse will draw millions of people to mostly rural counties across the U.S. is no secret. However, what might be unknown on that day to millions of travelers is the actual population and poverty rate of the rural county that they are visiting, and what it truly looks like when the sun does shine.

Here are the populations, poverty rates, and interesting facts about the seven N.C. counties that will be in the eclipse’s path of totality. It is worth noting that five of the seven counties have a poverty rate that is higher than the state average (16.4 percent), six of the seven counties have a median age that is significantly higher than the state median age (38), and the combined population of the seven counties (175,016) is equivalent to double the population of Asheville.

A look at the seven North Carolina counties that will be on the Eclipse’s path of totality

County

Population

Poverty Impacts (State average: 16.4%)

Median Age (State Median Age: 38)

Interesting Fact

Cherokee

27,935

18.3% of county
residents (4,902 people)

50

Is the westernmost county in NC.

Graham

8,684

21% of county
residents (1,783 people)

45

Is the only dry county in NC (the only one in which alcohol sales are forbidden).

Swain

15,256

16.2% of county residents (2,295 people)

41

The county seat, Bryson City, has two live webcams to view the city happenings from.

Clay

11,140

17.4% of county
residents (1,845 people)

51

377 is the total population of the town of Hayesville, the county seat.

Macon

35,411

18.8% of county
residents (8,183 people)

49

Home to various waterfalls (Cullasaja Falls, Dry Falls, Bridal Veil Falls, Quarry Falls).

Jackson

42,221

20.9% of county
residents (7,879 people)

37

Richland Balsam is the county’s tallest peak (6,410 ft.) as well as the highest point along the entire Blue Ridge Parkway (6,053 feet).

Transylvania

34,369

15.4% of county
residents (4,983 people)

51

Is the wettest county in NC, receiving over 90 inches of rain annually.
Sources: The Budget & Tax Center’s County Economic Snapshots (released April 2017), NC OSBM County Estimates.

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

Why does the President tweet about stock market levels but not our poverty rate?

Since July 1, President Trump has tweeted to celebrate the results of the U.S. stock market nine times and has tweeted about strong jobs numbers thirteen times. His frequent tweeting about these two metrics appears to indicate that they are his key indicators for assessing how we are doing as a country. It is worth noting, however, that during this timeframe not once has he tweeted about the “poverty rate” in the U.S. Why not?

Yes, the U.S. stock market, as measured by the Dow Jones Industrial Average, seems to be doing well as the Dow posted record closing highs all of last week. This, however, should not be too surprising. Since 2013, the U.S. stock market has hit a new high closing record 157 times (123 times under President Obama, 34 times under President Trump). Here’s another way of looking at it: The U.S. stock market has hit an all-time high in 30 of the last 54 months. In other words, the U.S. stock market has been doing well for quite some time now, meaning the record-breaking numbers that the President is tweeting about aren’t quite as rare as they might seem.

What should be surprising and alarming is the fact that the President does not seem to view the U.S. poverty rate as a key indicator of how America is doing.

In a recent article Politico points out that economists have frequently found little relationship between returns on stock investments and real economic growth. Instead, it appears that a strong stock market helps the rich get richer while the poor get poorer, through the increasing income inequality gap. The article points out, “about 80 percent of the value of the stock market is held by the richest 10 percent of the nation; the vast majority of gains in share value accrue to the rich, not to most Americans.”

Understanding and tracking the poverty rate in the United States and in North Carolina is important because it is an indicator of whether the economy is delivering opportunity for all. It goes without saying that the greatest country in the world, and the one with strongest economy, should not have a high number of people that are poor.

Unfortunately, Read more