Commentary, NC Budget and Tax Center, News

New labor market data point to continuing N.C. economic slowdown

The Budget & Tax Center released its analysis of the latest N.C. labor market data, which was published on Friday. Patrick McHugh, Senior Policy Analyst with the Budget & Tax Center, a project of the NC Justice Center, points to the data as a sign that North Carolina’s economy has been stumbling this year. According to his analysis:

Economic challenges facing North Carolina include:

  • Job growth has slowed in 2019: Employment growth in 2019 has slowed across the country, and the drop-off compared to the strongest periods of expansion since the Great Recession has been particularly dramatic here in North Carolina. Between 2014 and 2016, employment growth in North Carolina regularly exceeded 2 percent a year, still somewhat modest by historical standards, but significantly more robust than what we’ve seen this year. Annual job growth has hovered around 1.5 percent throughout all of 2019, roughly half of the most recent high point of growth set in February 2015. In raw job terms, the first nine months of North Carolina were less productive than several years during the current economic expansion. North Carolina added 45,800 jobs between January and September, well off the first nine months of 2014, 2015, and 2016, when the state added over 60,000 during the first nine months of the year.
  • Number of unemployed North Carolinians has increased in 2019: The number of North Carolinians looking for work has increased during 2019, reversing a long trend of shrinking unemployment rolls. Roughly 17,400 more North Carolinians were looking for work in September than in January of this year, even while the number of job-seekers nationwide declined by over 760,000 over the same period.
  • North Carolina’s unemployment rate is notably higher than the nation: With slowing growth and an increasing number of people looking for work, North Carolina’s unemployment rate has increased during 2019. After largely mirroring the national rate throughout most of 2017 and 2018, North Carolina’s headline unemployment rate is now notably higher than the national average. North Carolina’s unemployment rate stood at 4.1 percent in September compared to a national rate of 3.5 percent. While the national rate has dropped from 4 percent at the beginning of the year, North Carolina’s headline rate increased from the January reading of 3.8 percent.
  • Share of North Carolinians with a job still below pre-recession levels and the national average: North Carolina still has not recovered to the level of employment that existed before the Great Recession. In December 2007, just before the onset of the Great Recession, 62.1 percent of North Carolinians had a job, a level of employment that had been the norm throughout the early 2000s. In September 2019, however, only 59.3 percent of North Carolinians were employed.

Read the full release here. 

NC Budget and Tax Center

The N.C. budget stalemate, explained in GIFs

Earlier this summer, NC lawmakers passed a $24 billion conference budget that missed a number of opportunities to provide basic services and improve the lives of everyday North Carolinians. Within 24 hours, Governor Cooper vetoed the budget, calling it a “failure of common sense and common decency.”

On July 1, the Fiscal Year began and we didn’t have a budget.

No budget??!! While you might be confused about how we’re still running as a state, it’s because there’s a statute that keeps public programs funded at prior year levels.

This means that enrollment growth for schools and health care isn’t funded, pay raises and increases in retirement contributions for teachers and state employers aren’t provided, and emerging needs aren’t addressed.

A couple weeks after the start of the fiscal year, Governor Cooper released a compromise proposal that keeps nearly every major component of the conference budget — except it also includes a clean Medicaid expansion and eliminates tax cuts to corporations, using that revenue to invest in teachers and schools.

Read more

NC Budget and Tax Center

Federal shutdown is affecting family-run businesses in N.C.

The ripple effects of the federal shutdown are being felt by family-run businesses in North Carolina, according to an article on Friday by Paul B. Johnson of the High Point Enterprise.

Nick Owens and employees at his family-run business are having to turn away customers through no fault of their own because of a ripple effect of the federal government shutdown.

Lanier’s Super Market in Davidson County accepts food stamps from customers to pay for groceries. But the store in Denton is among businesses across the Piedmont, state and nation caught in limbo because their permits to accept food stamps are on hold due to the shutdown.

“Our customers haven’t been able to use food stamps with us since right after Christmas,” Owens said.

Lanier’s Super Market and other grocers were on a schedule to have their food stamp sale permits renewed in late December or January. But the U.S. Department of Agriculture can’t renew licenses now because of the stalemate from the shutdown.

The article points out that more than 2,500 grocery stores and food retailers across the United States haven’t been able to renew their food stamp sale permits since the shutdown began. That total includes 158 businesses in North Carolina. Read more

NC Budget and Tax Center

Budget & Tax Center Statement: Passage of this budget is a new low for North Carolina

Statement from Alexandra Sirota, Director of the Budget & Tax Center, on the budget passage
RALEIGH (June 1, 2018) – A new low has certainly been reached in North Carolina with the passage of this budget. The question now is how much lower will North Carolina’s legislative leadership take our state.

All along, legislative leaders have maintained their commitment to lowering income tax rates to zero.  They are getting closer, and our communities and families are hurting as a result.

Now, because they don’t want to deal with the realities of just how damaging their commitment to “low taxes above all else” is, they want to set a new low standard for the legislative process.

They ignored the voices of everyday North Carolinians, of those who teach our children, the needs of our youngest children and oldest residents, and the evidence of what works to grow the economy and connect communities to opportunity.

They raided federal money intended to extend the reach of programming to young children, and they cut off rural counties with high poverty from tools to revitalize. They failed to put state dollars toward health care as needed, and they earmarked millions for special interests rather than invest in services for all.  They missed the chance to make genuine progress on investing in each child’s education. This new low is a missed opportunity for our state, made worse by the fact that they kept in place $900 million in new tax cuts that will begin in January 2019 and force more bad choices in the future.

Legislative leaders are willing to lock in their bad ideas no matter the consequences.  They could even pursue radical proposals to put their budget ideas into the state Constitution.

Let’s be clear: The consequences are real, life-changing for our neighbors, and damaging to a state that should be seeking the high ground to prosperity.

NC Budget and Tax Center

Statement from Budget & Tax Center Director on Governor’s Budget Proposal

Statement from Alexandra Sirota, Director of the NC Budget & Tax Center: 

The Governor understands that you can’t both cut taxes and invest in children’s education, pay teachers competitively, or build thriving communities. The move to freeze the corporate income tax rate at an already low 3 percent and the income tax rate at 5.499 percent on incomes over $200,000—those in the top 5 percent of taxpayers—is a first and prudent step to shifting away from an approach that has failed North Carolinians.

For years, the NC General Assembly has prioritized tax cuts for profitable corporations and wealthy taxpayers, making tax choices that failed to deliver benefits to rural communities, working people, children and seniors, in particular.

The Governor’s budget stands in contrast, taking a fiscally responsible approach that seeks to build a thriving North Carolina for everyone.  It is a recognition of our historical commitment to the public good, and it should be a signal to the General Assembly to undo their harmful tax cuts that undermine North Carolina’s future.