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.
- 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