NC Budget and Tax Center

Investing in early childhood would have substantive, long-lasting benefits for children and North Carolina

Yesterday, early education workers and thought leaders joined together at the North Carolina Child Care Coalition’s annual Early Education Forum to discuss ways to use research, policy, and advocacy to address the high cost of early education as well as to transform the early care and education workforce.

Those concerns are substantiated in a new Economic Policy Institute report that details the high cost of child care in every state. In the new report, It’s time for an ambitious national investment in America’s children, the authors outline the benefits of public investment in early childhood care and education (ECCE), to children, families, society, and the economy. They also propose that lawmakers enact critical public investments, including:

  • The public provision of early childhood education, including high-quality pre-kindergarten education;
  • Subsidies to allow parents to afford high-quality child care; and
  • Expanded public funding for home visits by trained nurses to help parents both before and after childbirth.

These recommendations would help address some of issues that attendees raised at the forum yesterday. Child care is one of the biggest expenses that North Carolina families face. It’s so sizeable that infant care in North Carolina now costs $2,677 more than in-state tuition for 4-year public college. High costs mean that many families cannot send their children to high-quality education centers—even for low-income families because long waiting lists persist for subsidies. That hurts children, families, and our economy. Read more

NC Budget and Tax Center

SNAP time limit is problematic because there are too few jobs, not too few people willing to work

Most non-disabled, childless adults on Supplemental Nutrition Assistance Program (SNAP) who can work do so, according to new analysis published by the Center on Budget and Policy Priorities — an important finding given that the harsh three-month time limit for SNAP returns for this population in North Carolina over the course of 2016. More than 100,000 of the state’s poorest adults could be cut off SNAP if they can’t find a job, job-training program, or volunteer opportunity for 20 hours per week.

Due to federal law, the time limit returned for 23 of North Carolina’s 100 counties last month. The remaining 77 counties qualified for a year-long waiver due to a very weak labor market but the Governor and legislature permanently banned state waivers after July 2016. Now, the three-month time limit is returning at least six months sooner for those 77 counties, potentially harming very poor adults who are doing their best to get by in a weak economy.

Lawmakers supporting the ban and voluntary re-implementation of the time limit claimed that the policy change would encourage people to find a job or an education opportunity. Yet, the Center’s new report shows that claim is rooted in misunderstanding. Most childless adults on SNAP are in fact strongly attached to the labor force and they stay on assistance for shorter periods of time compared to the average participant.

Among the key findings in the Center’s report include: Read more

NC Budget and Tax Center

Policymakers should be wary of most policy proposals discussed at the Kemp Forum on Poverty

2016 may be the year that families working in low-wage jobs get the spotlight that they deserve from policymakers. Policymakers and candidates on both sides of the political spectrum are finally discussing economic policies that they purport will improve the lives of people who work hard to provide for their families but struggle to afford the basics.

Several Republican presidential candidates turned their attention to economic hardship and income inequality at the Kemp Forum on Poverty last weekend. In a positive development, one candidate voiced his support for expanding the Earned Income Tax Credit for low-income childless workers so they can keep more of what they earn and make ends meet. Another candidate lifted up the benefit of adopting and expanding state EITCs—advice that is in line with a growing body of research that shows how the credit helps at every stage of life. Both policies would reduce poverty for children and families.

Unfortunately, such endorsements for stronger EITCs are out-of-step with GOP policy choices here in North Carolina, where state lawmakers axed the state credit in 2013—despite the fact that in one in three Tar Heel workers earn poverty-level wages.

While it is welcome news for candidates to pay unprecedented attention to poverty, it is concerning that a good share of the discussion falsely portrayed fundamental truths about poverty trends, the effectiveness of work and income supports (i.e. the safety net), and how the proposals discussed would in reality increase material hardship and poverty. Read more

NC Budget and Tax Center

With the start of the New Year, some will lose food aid across parts of North Carolina

For some of North Carolina’s poorest adults living on the edge, the New Year is not bringing cheers or hopeful expectations. For these folks, the year kicked off with the return of a policy that could push them further into material and economic hardship regardless of their efforts to find work.

More than 100,000 of the state’s poorest adults face losing federal Supplemental Nutrition Assistance Program (SNAP) benefits this year due to the return of the harsh three-month time limit for childless, non-disabled adults aged 18-49. These adults will lose their food aid after three months if they can’t find a job, job-training program, or volunteer opportunity for 20 hours per week regardless of labor market and economic conditions in their community.

Last summer, state lawmakers elected to re-implement the time limit statewide even though parts of North Carolina qualify for a waiver this year due to sustained high levels of unemployment. The time limit would have returned this month for 23 of the state’s 100 counties regardless of state action because of an improving economy in those counties. The remaining 77 counties qualified for a year-long waiver but the governor and legislature permanently banned state waivers after July 2016. Read more

NC Budget and Tax Center, Uncategorized

Top 10 state budget missteps in 2015

The 2015 year brought plenty of budget missteps on Jones Street—from another round of tax cuts to state investments that are mired at historic lows. Here’s a look at the top 10 missteps that state policymakers should address in 2016.

  1. State lawmakers once again chose to cut taxes that primarily benefit the wealthy and profitable corporations over meaningful levels of reinvestment. The tax plan will reduce revenue by $1 billion annually when fully implemented, cutting off pathways to greater economic success like early childhood development, public schools, and community economic development while also failing to boost the economy or create jobs.
  2. State lawmakers failed to restore the state Earned Income Tax Credit (EITC), which benefited nearly 1 million families and their 1.2 million children. Yet, they chose to expand the sales tax to new services like maintenance, repair, and installation, effectively further shifting the tax load onto middle- and low-income taxpayers.
  3. The 2015 tax changes make our tax system more upside-down by asking even more from people who are already struggling to pay the bills. Under full implementation of the tax package, the lowest income working families will end up paying a tax increase of $7, on average, whereas millionaires are the big winners again with a tax cut of more than $1,800 on average.
  4. This budget doesn’t address falling wages, just as the last two budgets failed to do. In 2013 an hour’s work in NC earned around $2.50 less than the national average; now that gap has grown to almost $3.00. Allowing the state’s lowest-income families to keep more of what they earn through an EITC is a key way to build a stronger economy, along with a higher minimum wage and collective bargaining rights, but legislators failed to restore the tax credit and raise the minimum wage.
  5. State investment is at historic lows. State lawmakers passed a budget that keeps state spending as part of the economy below the 45-year average. That would be fine if needs have shrunk but they’ve grown. State budgets typically allow spending to grow as the population grows and the economy changes, especially after an economic downturn when revenues plummet and services are frozen or cut.
  6. State investments break an unwelcome modern record as they remain diminished. Lawmakers passed a budget that caps off the only period since 1971 in which state spending declined as a part of the economy for seven and eight straight years while the economy itself grew. Continuing on a tax-cut path means there simply won’t be enough revenue left over to repair critical investments or to position our state to compete.
  7. Eight years later, state investment remains below pre-recession levels despite more children to educate, more older adults to care for, and more citizens to serve and protect. Such long-term disinvestments have translated into significant unmet needs for our state’s growing population—a shortage of K-12 textbooks, school nurses, and community services for older adults.
  8. This budget continues to hold us back from ensuring educational success for every child. For the current school year, lawmakers invested more per student compared to the 2015 fiscal year budget but well below 2008 pre-recession levels—nearly $500 less per student. This will cause real harm to the classroom and educational outcomes. The number of students in North Carolina schools has continued to increase since 2008, yet the amount of funding per student— and, therefore, the resources available to educate each student—has not been state lawmakers’ priority over tax cuts.
    • For example, textbook spending is below half its 2010 peak level, leaving some schools with outdated textbooks or with no textbooks at all.
  9. Continuing down a tax-cut path is deepening cracks in NC’s opportunity structure—and it has left several vital areas of public programs and services inadequate.
    • For example, lawmakers kept year-over-year spending flat for the pre-kindergarten program that serves at-risk 4-year olds. They failed to restore the more than 6,400 slots lost since 2009 or give opportunity to the 7,200 children stuck on the waiting list.
    • For example, tuition at community colleges rose for the seventh consecutive year to $76 per credit hour from $72—an 81 percent increase since 2009—increasing the likelihood of a college education being out of the reach of many.
  10. This tax-cut path—and the revenue losses that come with it—also mean that some investments are completely missing from the budget.
    • For example, there is no cost-of-living adjustment for retired public employees like former state troopers and teachers despite their shrinking purchasing power due to changes in the economy.
    • For example, there is no Medicaid expansion, which means lawmakers denied affordable health care to about 500,000 North Carolinians.
    • For example, there is no support to ensure that all rural communities have reliable high-speed internet access that is increasingly essential to participating in the global economy—which leaves struggling rural communities further behind urban areas.

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