Commentary, NC Budget and Tax Center

Twelve good ideas for the General Assembly to move forward on now

This week was the filing deadline for legislative proposals at the General Assembly. While it isn’t the last opportunity for legislators to introduce policy ideas for consideration, it presents an important milestone in the session and a crucial time to review the priorities of policymakers.

The work of the General Assembly will be critical to address the public health threat of the COVID-19 pandemic and its ripple effects through the economy. There remain many gaps in the response from federal and state policymakers and the result is persistently high needs for families and communities across North Carolina.

The following are a dozen legislative proposals that would support the well-being of our neighbors and secure a stronger recovery for our state.

  1. House Bill 1229 (Howard, Wray, Saine) would provide funding for the unemployment insurance system, which has been overwhelmed by a historic number claims and pays out only half of those claims to individuals. It would also extend a temporary waiver on the time limit on food assistance. House Bill 1075 (Alston, Batch, Holley, Hunt) and Senate Bill 792 (Nickel, Chaudhuri) would also make important fixes to the system to protect workers and the economy when federal programs expire at the end of July.
  2. House Bill 1120 and Senate Bill 778 (Murdock, Smith, Foushee) would expand anti-hunger programming on college campuses  and provide funding to UNC institutions for this purpose. With college students excluded from federal food assistance and often facing higher rates of food insecurity, this program makes sense anytime, but particularly when hardship is likely to persist. Senate Bill 849 (Petersen), another important anti-hunger proposal, would remove the ban on food assistance for certain people with drug felonies and would support their successful re-entry from prisons and jails to society.
  3. House Bill 1040 (Batch, Brewer, Clark, Gailliard) and Senate Bill 834 (Robinson, Foushee, Blue) would close the Medicaid coverage gap. It would ensure that people who have lost health insurance during COVID-19, as well as those who were blocked from accessing Medicaid before the virus hit, can receive affordable care. In addition to creating a healthier, stronger community, researchers estimate the state would increase its business activity by $11.7 billion in just three years between 2020-2022 which could be spent on education, infrastructure and other needs.
  4. A series of bills would make important steps in addressing the state’s affordable housing challenge, including the unique pressures on renters and homeowners whose income has been disrupted by COVID-19. House Bill 1134 (Autry, Holley, Harris, Butler) and House Bill 1135 (Autry, Holley, Harrison, Butler) would provide rental and foreclosure assistance, respectively, while House Bill 1200 (Szoka, Saine, Baker, P. Jones) would do the same. House Bill 1208 (Lambeth) would put more dollars towards the state’s Workforce Housing Loan Program, supporting the development of more affordable units across the state. Read more
Commentary, Education

Memo to charter school advocates: Get your facts straight; stop undermining traditional public education

North Carolina charter advocates continually complain of an “unfair” funding system despite regularly outspending comparable traditional public schools. An analysis of expenditure data from the ’18-19 school year indicates that charter schools maintain a small, $83 per-student local funding advantage over similar public schools. Charter advocates seeking greater investment in charter students should stop trying to take money from the less-advantaged traditional sector and instead work together to ensure state leaders deliver adequate funding for all students.

North Carolina’s schools – both traditional schools and charters – receive funding from three sources: state, local, and federal. In all cases, funding for charters is on par with funding for traditional public schools.

In the ’18-19 school year, federal funding (excluding child nutrition funding) comprised just 6% of operating expenditures in traditional schools, compared to 4% in charter schools. But traditional and charter schools compete for federal funds on relatively equal funding. The vast majority of federal funding supports students from families with low incomes (Title I) and students with disabilities (IDEA). Traditional schools’ “advantage” in federal spending simply reflects that traditional public schools enroll a higher share of students from families with low incomes and students with disabilities.

Traditional and charter schools compete on pretty much equal funding when it comes to state funding, as well. Essentially, charters receive the same per-student funding of the district in which the charter school is located, except that a charter’s amounts for English learners and students with disabilities are calculated based on actual enrollment in the charter school. Contrary to the claims of charter advocates, charter schools receive an equal per-student share of transportation funding. To the extent charters are shortchanged, it’s that they aren’t eligible for state funding for replacement school buses (they should be). But charters also benefit from allotments like At-Risk and Disadvantaged Student Supplemental Funding that are calculated based on county-wide estimates of student need despite charters having fewer at-risk or disadvantaged students.

It’s local funding that has consistently been the subject of charter advocates’ dishonest whining. Specifically, they have falsely claimed that, when it comes to local funding, “for every one dollar sent to traditional public schools, public charters receive less than 75 cents.” The claim appears absurd on its face, as per-student spending in charter schools exceeded spending in traditional public schools by $246 per student in ’18-19 (see Tables 25 and 40.2 of DPI’s Statistical Profile). To be fair, that comparison overstates charters’ local spending advantage. Charter students disproportionately hail from urban districts with higher levels of local spending. But the charter advantage remains even after adjusting for students’ residence. Per-pupil local spending in traditional districts where the average charter student lives was $2,485 in 18-19, while their charter schools spent $2,567 per student, a difference of $83 per student.

The difference is quite small in the grand scheme of things. But hopefully the analysis of actual data will finally convince charter leaders from pretending they receive “a fraction of the funding that traditional public schools receive.” If charter leaders think their funding is too low (in most charter schools it probably is!), then they should be advocating for greater funding for all public schools. More specifically, the state’s plan for bringing an end to the long-running Leandro court case by providing a constitutional education to all students would increase state funding in charter schools by about 40 percent, or $2,500 per student.

For charter schools, there is little to be gained from continually trying to slice away funding from their traditional school counterparts. Charter leaders sincerely interested in securing additional funding for their students should stop the dishonest whining, and instead unite with the public school advocates seeking to deliver adequately funded schools for all of North Carolina’s public school students.

Kris Nordstrom is a Senior Policy Analyst with the North Carolina Justice Center’s Education & Law Project.

Commentary, COVID-19, NC Budget and Tax Center

Big falloff in revenues dictates an obvious course for state leaders

As economic projections worsen across the country, the outlook on state budget shortfalls is equally bleak. While there is still much we don’t know, North Carolina’s fiscal picture is now a little clearer with the release of the state’s first revenue forecast since the start of the COVID-19 pandemic.

Last week’s consensus revenue forecast expects revenue collections to be down $4.2 billion –  $1.6 billion (6.6%) this fiscal year and $2.6 billion (9.9%) next year. That means fewer public resources at a time of growing demand for services and supports. Without additional revenue, $1.6 billion less in North Carolina’s General Fund is equivalent to the total state funding currently allotted to the Community College System plus NC State University, combined. Next year, a $2.6 billion hit would be equivalent to the entire state allocation for Justice and Public Safety.

State economists have repeatedly emphasized the unprecedented and uncertain nature of the current crisis. There will not be a final account of state revenue until after the new tax filing deadline, which was pushed back from April 15 to July 15. But economic indicators, such as skyrocketing unemployment and plummeting GDP, suggest that this recession could be deeper and longer than any in modern history.

Unfortunately, as the chart indicates, North Carolina’s current fiscal position has been hampered by past policy choices that provided tax breaks for the wealthy at the expense of everyone else.

The state is estimated to currently collect $3.6 billion less per year than it would had lawmakers not enacted the tax cuts that commenced in 2013. Starting this downturn from a diminished level of revenue collection means our public institutions were already under-resourced and unable to fully meet people’s basic needs, long before our current public health and economic crisis began.

The latest revenue forecast paints a troubling picture of state finances and points to the urgent need for additional and flexible federal aid to state and local governments. According to U.S. Treasury guidance, federal funding cannot be used to cover revenue shortfalls, and it must be received by recipients by the end of 2020 and spent on COVID-related expenses incurred before the new year.

A recent proposal passed by the U.S. House would provide critical aid to state and local governments, with estimates suggesting it would deliver about $6.8 billion in state aid to North Carolina and more than $11 billion to the state’s local governments.

Without additional federal funds or state revenue, budget cuts could cause thousands of people to lose access to public resources and services at a time during which they need them most. North Carolina’s leaders should act quickly by asking the federal government for more flexible state aid and requiring companies that have profited from the pandemic – like big banks and online retail giants – to pay their fair share in state taxes.

Building a more vibrant and inclusive economy will depend on thoughtful fiscal policies that put people before profits.

Leila Pedersen is a policy analyst at the N.C. Budget & Tax Center.

Commentary, COVID-19

Bipartisan election reform bill is a fine first step

In a rebuke to the nonsensical rants and kooky conspiracy theories promoted by President Trump, Republicans in North Carolina have, to their credit, recently joined with Democrats to introduce bipartisan election reform legislation.

House Bill 1169 contains many provisions requested by the State Board of Elections and voting rights advocates to help the state prepare for conducting an election during the COVID-19 pandemic:

 

  • reduce the requirement for absentee mail-in ballots from two witnesses to one;
  • give counties greater flexibility as to where they assign poll workers;
  • allow voters to submit an absentee ballot request form via email, an online portal, and fax, — as well as the current methods — by mail or in person; and
  • draw down and allocate federal dollars to support election administration during the pandemic.

An on-the-money Capitol Broadcasting Company editorial on WRAL.com put it this way:

The legislation will make it less cumbersome to cast ballots by mail – an option many voters may choose who have health concerns amid this COVID-19 pandemic. Typically, about 5% of ballots are cast by mail. Election officials say that might surge to as much as 40% this year. “It’s been a long time since we’ve had a bipartisan elections bill,” said state Rep. Pricey Harrison, D-Guilford, a key architect of the elections package. “It seems to be a really good basis for protecting the 2020 election.”

Rep. Holly Grange, R-New Hanover, a co-chair of the House Elections Committee and a sponsor of the bill, said it will give election officials on the local and state level “the flexibility and resources needed to accommodate the expected increase in absentee ballot requests due to the pandemic.”

The bill still needs improvement, but as Bob Phillips of the good government group Common Cause observed, it is “a positive step toward ensuring every eligible North Carolina voter is able to safely and securely cast a ballot in this year’s elections.”

The sponsors from both political parties deserve our thanks. Let’s hope the bill moves swiftly and productively through the General Assembly.

Commentary

How Cooper should respond to Trump’s mad convention rant

Photo: Chip Somodevilla/Getty Images

It will probably be a difficult task given the political realities that accompany demands issued by the President of the United States, but Gov. Roy Cooper should, if at all possible, ignore yesterday’s Trump tantrum about the planned GOP convention in Charlotte this summer.

As you’ve probably heard by now, King Donald decreed that he would remove the convention from the Queen City (probably to light in some Trump-owned property in Florida) unless Cooper guarantees that it will be allowed to proceed with “full attendance” — i.e. without any of those pesky limitations on attendance that have been made necessary for large gatherings as a result of the COVID-19 pandemic.

As the Charlotte Observer reported, Trump tweeted the following:

“I love the Great State of North Carolina, so much so that I insisted on having the Republican National Convention in Charlotte at the end of August. Unfortunately, Democrat Governor, @RoyCooperNC is still in Shutdown mood & unable to guarantee that by August we will be allowed full attendance in the Arena,” Trump wrote on Twitter.

“In other words, we would be spending millions of dollars building the Arena to a very high standard without even knowing if the Democrat Governor would allow the Republican Party to fully occupy the space. Plans are being made by many thousands of enthusiastic Republicans, and others, to head to beautiful North Carolina in August.

“They must be immediately given an answer by the Governor as to whether or not the space will be allowed to be fully occupied. If not, we will be reluctantly forced to find, with all of the jobs and economic development it brings, another Republican National Convention site. This is not something I want to do. Thank you, and I LOVE the people of North Carolina!”

Cooper’s office responded diplomatically later in the evening by saying:
“State health officials are working with the RNC and will review its plans as they make decisions about how to hold the convention in Charlotte. North Carolina is relying on data and science to protect our state’s public health and safety.”

Let’s hope Cooper (as well as Charlotte leaders and all other North Carolinians who care about public health) stick to this responsible stance. There could be significant progress in combating the pandemic between now and then, but it’s hard to see how bringing thousands of unmasked conventioneers to North Carolina’s largest city to hang out in close quarters for a week just 90 days from now is not going to pose a serious threat to public health. In any event, we hardly know for sure at this point.

And for what purpose? To serve as a studio audience for a reality TV show with a foregone conclusion — the latest self-coronation of a nattering and narcissistic nabob who probably can’t name three cities in North Carolina?

Honestly, political conventions have become obsolete anyway. Yes, it would be nice to bring some business to Charlotte at a time when the economy is struggling, but given Trump’s long track record, he and his minions will probably stiff us for for many of the bills associated with the event anyway.

The bottom line: Tt’s hard to see how the whole thing is worth the risk. Cooper should, at a minimum, stick to his guns.