2017 Fiscal Year State Budget, NC Budget and Tax Center

Missed Opportunities: Investments that are MIA in Governor McCrory’s budget

Deep tax cuts are preventing Gov. McCrory from proposing a bold, visionary state budget for the upcoming 2017 fiscal year. The 2013 and 2015 tax cuts are draining more than $1 billion in revenues annually, squeezing out much-needed reinvestment in the programs and services that help children, families, and communities thrive. Under his budget, North Carolina will continue to be held back by substantial unmet needs.

There are few public dollars available for anything else after previous deep tax cuts and the governor’s prioritizing of an uneven compensation package for teachers and state employees. Without those tax cuts, what could have been possible for North Carolina?  There has been plenty of coverage of what is in his budget over the last week but there has been little coverage of what’s not in his budget. Below is a short list of investments that are missing in action but still greatly needed to build a stronger, more inclusive economy for us all.

 Economic Security

  • Fails to restore the state Earned Income Tax Credit, which allows low-income workers to keep more of what they earn. We are the only state to eliminate this anti-poverty tax credit in 30 years.
  • Fails to provide a raise for all teachers and state employees. Teachers and school personnel get a mix of raises and one-time bonuses. On average, teacher pay would increase by 5 percent (excluding the bonuses) but his plan would not provide every teacher a raise, including veteran teachers. State employees get a one-time 3 percent bonus. He also appropriates funds to implement a new market-aligned salary structure for state agencies, and to adjust salaries in state job classifications where employee pay is below market value, not competitive in the marketplace, and where the state is having difficulty recruiting and retaining employees.
  • Fails to provide a cost of living adjustment (COLA) for state retirees despite shrinking purchasing power due to changes in the economy.

Early Childhood Education, K-12 Schools, and Higher Education Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

Follow the money: The Governor’s budget keeps phased-in income tax cuts on the books, proposes no further rate changes, and leaves nearly $5 million on the table

Today, Governor Pat McCrory unveiled a budget proposal for the 2017 fiscal year that provides modest funding increases to support early learning, education, mental health, and inconsistent pay bumps for teachers and state employees. His $22.3 billion budget proposal represents a 2.8 percent—or $600 million—increase over the current 2016 fiscal year budget.

The Governor’s budget proposal, in large part, is one that stays the course. That’s because his ability to replace the worst cuts from the economic downturn and address pressing needs is severely constrained by the recent tax cuts that he signed into law. His proposal allows these tax cuts—which primarily benefit profitable corporations and the wealthy—to continue to phase in as scheduled. All told, recent tax cuts are expected to cost more than $2 billion annually once all tax cuts go into effect.

That price tag is coming at the expense of providing pay raises and cost of living adjustments for all workers as well as strengthening education, public health and safety, and the other building blocks of a strong economy. His proposed modest levels of reinvestment are a small fraction of what is needed to realize his own stated principles of preparing for future growth and helping those who are struggling in today’s economy, as noted in the NC Budget & Tax Center’s public statement.

In fact, his budget would keep state support for services below pre-recession levels, when adjusted for inflation. That would be fine if public needs had shrunk. But they have grown. Read more

NC Budget and Tax Center

What we know—and don’t know—about how the Governor’s budget proposal would address pressing needs facing North Carolinians

It’s been a month of Sundays since North Carolinians have seen a decent state budget that makes smart, targeted investments in the programs that reduce poverty and build a more inclusive economy. Since 2008, the norm has been budget cuts and underinvestment due to the recession, very slow economic recovery, and lawmakers’ choice to enact three years of deep tax cuts.

That norm isn’t poised to change all that much based on the snippets of the Governor’s 2017 fiscal year budget proposal that he released last Friday. It appears that the Governor will in large part stay-the-course and propose a modest level of reinvestment in the state budget for education, public and mental health, safety, and a mix of bonuses and salary raises for teachers and state employees. His $22.3 billion proposal is about a 2.8 percent—or $608 million—increase over the current 2016 fiscal year budget.

At a time when huge unmet needs persist, staying the course means that many North Carolinians and communities could go another year without adequate public investments that help boost economic mobility and improve overall well-being. To what extent the Governor’s budget would address or ignore unmet needs remains unknown until he releases his entire budget plan later this week.  Here is what we do know.    Read more

NC Budget and Tax Center

Funding the NC Housing Trust Fund

This post is part of a series on the state budget featuring the voices of North Carolina experts on what our state needs to progress so that all North Carolinians have a fair shot to get ahead.

By Samuel Gunter, Director of Policy and Advocacy, NC Housing Coalition

More than 500,000 North Carolina households spend at least half of their income on housing,[i] and communities around the state have been taking notice (including Charlotte, Asheville, Raleigh, Wilmington and Durham). A family that spends most of their income on housing[ii] is unable to invest in other basic necessities like preventative health care or education, much less build resources for the future. While each community’s housing needs are unique, lack of affordable housing is a problem in all 100 North Carolina counties[iii] and calls for a statewide solution.

raise the barThe NC Housing Trust Fund was created by the General Assembly in 1987 and is administered by the North Carolina Housing Finance Agency. It is North Carolina’s most flexible resource for the state’s growing and complex affordable housing need. Funds leverage private funding to create a variety of housing solutions — homeownership, rental, supportive housing, new construction, rehabilitation, and emergency repairs. Examples include:

  • Senior communities;
  • Habitat for Humanity homes funded by second mortgages;
  • Urgent repairs of dangerous housing conditions; and
  • Domestic violence shelters.

Read more

NC Budget and Tax Center, Raising the Bar 2016

North Carolina’s older population and the need for state action growing

This post is part of a series on the state budget featuring the voices of North Carolina experts on what our state needs to progress so that all North Carolinians have a fair shot to get ahead.

By Mary Bethel – President, NC Coalition on Aging

raise the barThe Baby Boomers Are Here!  North Carolina is experiencing a significant increase in our older population as the state’s 2.4 million baby boomers (those born between 1946 and 1964) have begun to enter the retirement age.  Today, 1 in 5 – over 2 million people – are age 60 and over and there are 170,000 people age 85+ living in the state.  By 2018, the state as a whole, and 90 of the 100 counties, will have more population 60 and over than age 0-17.

With this growth in the number of older adults comes an increased need for legislative action to help those who need assistance.  Many aging advocacy groups in the state, including the NC Coalition on Aging, a statewide alliance composed of agencies; organizations, groups and supporting individuals concerned with issues impacting older North Carolinians (www.nccoalitiononaging.org); are asking the General Assembly to appropriate funding for two priority areas. Read more