2017 Fiscal Year State Budget, NC Budget and Tax Center

House releases pieces of FY2017: Overview of the Transportation Budget proposal

House budget leaders are beginning to release pieces of their budget proposal for the 2017 fiscal year that begins July 1st. Budget subcommittees are meeting today to go over their respective proposals, with the opportunity for subcommittee members to put forward amendments. House leadership is not expected to release their full budget and tax package until next week.

But we know that the House and Senate leadership already set a General Fund budget target at a little over $22 billion—which is less than the governor’s. They used a flawed formula to set this budget target without basis in economic realities or the needs of our communities.

Summary of the House Transportation Budget proposal

The state’s transportation system helps form vital social and economic structures by connecting people to services, businesses, and other opportunities across North Carolina—especially those who are transit-dependent and living in rural areas where there has been little job growth since the economic downturn.

The transportation budget is not supported by the General Fund. Rather it is supported by revenue from the Highway Fund and Highway Trust Fund, which are fed by the state’s gas tax, highway use tax, and Division of Motor Vehicle fees.

Here are key items in the House Transportation Budget:

• Repeals the “Light Rail Funding Cap” that lawmakers enacted last year. The cap limits state spending on light rail projects at $500,000, the Strategic Transportation Investments (STI) law that awards funding based on a data-driven process (which already favors roads over transit expansion). This cap affects planned projects in the state’s major cities.

• Provides an additional $32 million to the STI program.

• Keeps in place late fees for car owners who allow their DMV registration to expire—those fees range from $15 if registration has been expired for less than one month up to $25 if the period extends beyond two months. Under current law, those late fees would sunset in December 2017.

• Provides an additional $2 million for the state’s rural transit system and another $2 million for the state’s urban transit system.

• Provides $13.4 million to update and modernize the state’s ferry system. Now the ferry system would not compete under STI but would instead get a direct appropriation.

• Provides a one-time $1 million appropriation for an advertising and public outreach campaign to lift up DMV modernization initiatives.

• Provides $2.9 million to expand contracted staff that review driver licenses at the DMV.

• Provides $1.7 million in recurring funding and $151,900 in nonrecurring funding to hire additional employees who would be tasked with implementing reform initiatives at the DMV Medical Review Program. This program is responsible for gathering and evaluating medical information of drivers who have medical conditions that could affect safety on the state’s roads.

• Provides $17.9 million to support the general maintenance of roads and another $17.9 million to support the maintenance of secondary roads.

• Provides $9 million to support inmate litter collection and road cleanup efforts.


NCWU’s Report Card on the 2015 Legislative Session gives lawmakers mostly “very bad” grades

State lawmakers are failing to prioritize public policies that will advance and improve the lives of women and families across the state, according to a new 2015 Legislative Session report card that NC Women United unveiled yesterday at the North Carolina General Assembly. They called upon lawmakers to enact public policies during the Short Session that truly support women and families.

After each Long Session, NCWU and its members compile a report card detailing how the policy goals that are featured in their biennial Legislative Agenda fared. These policy goals aim to remedy the challenges that women face by expanding economic opportunity, access to health care, ending violence against women, and increasing civic participation and equality.

Twenty-two of their thirty-five policy goals received a “Very Bad” grade. The report card scores each policy goal along a spectrum of five grades: Very Good; Mostly Good but Mixed; Mixed; Mostly Bad but Mixed; and Very Bad.

“North Carolina women deserve policies that address the realities of the issues they face, rather than policies based on myths and stereotypes,” said Tara Romano, President of NCWU. “We are confident, however, that there are ways we can make progress in the coming Short Session. We hope lawmakers will listen to women’s voices and take action that will benefit women and families across our state.”

See the full report card and other details here.
NC SHAPE ----- OUTLINE in Illustrator

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