NC Budget and Tax Center

The state Senate unveiled a proposal yesterday that would take the modest revenue gains that our state is experiencing and give them away in the form of tax cuts rather than reinvest them in the building blocks of community well-being. That would be a mistake. Lawmakers already deeply cut revenue collections in 2013 and this plan would double down on those cuts and flawed strategy.

The proposal would hand out more costly tax cuts to large, profitable corporations, lower the personal income tax for the third time, and slightly expand the sales tax to more services—all at the expense of everyday North Carolinians. It will neither enable the state to replace the worst cuts enacted in the aftermath of the recession nor restore the state’s economy to a sound footing, as my colleague explained yesterday.

The cost of the Senate leadership’s proposal grows to nearly $1.1 billion per year once the plan is fully phased in.* That cost is roughly the amount of money that the state invests in the entire Community College system, which serves all 100 counties and is tasked with preparing today and tomorrow’s workforce. Over the next biennium alone, revenue losses would total $951 million. That means a lost opportunity to catch up, rebuild, and keep up with the needs of children, families, and communities across the state.

All North Carolinians will the pay price. The graphic below illustrates the potential reach of those revenues and highlights how the revenue could instead be reinvested in things that benefit us all. Read More

NC Budget and Tax Center

Women will join together at the Bicentennial Mall (near the state legislature) at 5pm today to demand better public policies that would improve the lives of women and families. The rally is part of the North Carolina NAACP’s Moral Monday Movement Summer of Moral Resistance, with support from women’s coalitions such as NC Women United.moralwednesday

Speakers will lift up the fallout from Governor McCrory’s and the state legislature’s policies that have been to the detriment—not the benefit—of Tar Heel women. These policy decisions include the underfunding of education from early education and care to college, shifting taxes away from the wealthy and onto everyone else, failing to expand Medicaid, refusing to give workers the dignity of a minimum wage increase, and enacting the nation’s worst voter suppression law.

Just on the economy issue alone it is easy to see why women will show up tonight and use their voices for change. Women have made tremendous economic strides over the last few decades. Yet, women are still more likely than men to live paycheck to paycheck and struggle to pay the bills.

The fact that women face more economic hardships than men is well-documented in the data. Here are some quick facts from my latest poverty report, North Carolina’s Greatest Challenge, that put Tar Heel women’s economic struggle into perspective:

  • The poverty rate for women in the state was 19.3 percent in 2013 compared to 16.4 percent for men. That year, Tar Heel women earned just 82.9 cents for every dollar men earned.
  • Nearly 156,500 women in the state would have to be lifted out of poverty for women to have the same poverty rate as men.
  • Women of color face particularly high rates of poverty. In 2013, Latina, American Indian, and African American women were more than twice as likely to live in poverty as Asian and white women.
  • Three in four children who were poor lived in families with at least one worker.
  • Gender inequality extends into retirement age too: older female adults are far more likely to struggle to make ends meet than men.

Put simply, from Murphy to Manteo the economy is just downright broken for many women and their families. North Carolina needs policies that create equal opportunity and ensure that prosperity is broadly shared so that all North Carolinians can reach their potential. Yet, the policies that lawmakers are prioritizing are not aligned with the research and fail to meet this standard. Women and allies will join forces tonight to demand better choices to help ensure a better future for us all.

Your silence will not protect you—as Audre Lorde declared. Details are here if you want to join them.

NC Budget and Tax Center

Last week, the North Carolina House of Representatives approved a $22.2 billion state budget plan, which is overall a modest step towards building an economy that works for all North Carolinians. The budget represents a 5-percent increase over current year spending and the highest level of investments since the official economic recovery began in 2009.Yet, the plan still falls short of pre-recession levels of investments, fails to replace years of harmful cuts, and does not reflect all that’s needed to foster inclusive economic growth.

Unfortunately it is now clear—based on newly released spending targets—that the Senate is poised to severely limit spending rather than follow the House’s lead on making modest improvements. Low spending targets may be linked to the Senate leadership’s desire to “significantly” cut income taxes even further—a move that would hinder reinvestment in programs and fail to generate promised economic returns.

The Senate’s low spending targets make plain the shortsightedness of such an approach. For example, investments in public schools would only increase by .013 percent after accounting for enrollment growth. School systems and students would have to go without essentials that support academic achievement and completion, hindering the long-term growth potential of the state.

As the Senate moves forward in the budget process, budget writers should keep and build upon the House’s planned investments in the things that build a more inclusive economy so the state can better position itself to be competitive. Further deep tax cuts hinder lawmakers’ ability to achieve this goal. Below is a list of ten examples of economy-boosting investments and policy changes that the House included in its budget plan. Read More

NC Budget and Tax Center

Another round of tax cuts for corporations, extended tax breaks for selected industries, and considerable fee hikes for families and businesses are included in the tax and budget package that the House leadership unveiled yesterday afternoon. Because tax changes affect the level of state resources that are available for investment, lawmakers must decide on its tax priorities ahead of approving their budget bill for the upcoming 2015-17 biennium. The House Finance committee tweaked the tax changes last night and now the budget bill is moving through the committee process with the expectation of a final vote on the House floor by Friday.

How the state raises the money that supports public schools, health care, courts and other core supports to the economy and communities should get just as much scrutiny as the spending side of the budget debate—but this is rarely the case. Examining how lawmakers pay for the budget is important in light of the 2013 tax plan that continues to drain resources, which otherwise could have been used to build opportunity and replace the worst cuts enacted since the economic downturn.

The House leadership pays for its FY2016 budget proposal in the following way: Read More

NC Budget and Tax Center

This piece was originally featured on Women AdvaNCe’s blog and is cross-posted here.

Working Tar Heel moms are never off the clock. From laboring at the workplace all day to tucking kids in at night, we put in a lot more than a full day’s work. Much of the work is tireless, thankless, and unpaid. But for the paid work, every dollar moms work for is hard earned. These are some of the many reasons why we celebrated moms this week.

Flowers and breakfast were great, but this Mother’s Day we needed to keep our sights on what’s happening in Washington, D.C. Congress can help 750,000 moms right here in North Carolina by making permanent improvements to tax credits that put money back into the pockets of moms who’ve earned it. Without action from Congress, these credits expire at the end of 2017.

The state’s economy is experiencing a boom in low-wage work—a trend that is falling disproportionately hard on women. For more than 21 million working moms across the country, including 763,000 in North Carolina, the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) are important tools that help them make ends meet in today’s economy. By offsetting income and sales taxes, these credits boost income, support work, and reduce poverty—especially among children.

Allowing moms to keep more of what they earn also helps keep poverty in check. Read More