2017 Fiscal Year State Budget, NC Budget and Tax Center

Highlights of Justice and Public Safety Budget in joint budget agreement

The joint budget for Justice and Public Safety for the upcoming fiscal year entails a 3.5 percent increase to the original JPS budget passed by state lawmakers last year. Despite unmet needs in North Carolina such as re-entry services for ex-offenders returning into local communities, little progress is made beyond funding for pay raises and one-time bonuses.

Highlights from the joint budget for Justice and Public Safety:

Public Safety Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

Highlights of Higher Education budgets in the joint budget agreement

Under the joint budget, state support for higher education – the UNC System and Community College System – fails to ensure that adequate resources are available to provide quality education services to the more than 400,000 students enrolled in public colleges and universities across the state.

The joint budget includes a new fixed-tuition payment option that would guarantee that tuition does not increase during a specified time period for future students attending public four-year universities within the UNC System. The joint budget also limits the amount of revenue raised through student fees at public four-year universities each year. While these actions aim to address the cost of college, they fail to ensure that North Carolina’s four-year public universities have the resources required to ensure quality education services.

Steady erosion of state support for higher education in recent years has played a direct role in the increasing cost of college in North Carolina. Tuition at community colleges has increased by 81 percent since 2009. At public four-year universities, state funding per student remains more than 15 percent below its 2008 pre-recession level when adjusted for inflation – equating to hundreds of millions of dollars in funding cuts. This pressing reality is unaddressed in the joint budget negotiated by lawmakers.

Highlights from the joint budget for higher education: Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

First look at the Health and Human Services Budget in the joint budget agreement

The joint budget relies on two particular sources of dollars for narrow expansions to targeted programs and services that promote the health and well-being of North Carolinians through Health and Human Services. The first is the $318 million reduction in Medicaid that   is largely due to projections that suggested the demand for Medicaid services would grow even beyond what has been experienced in recessionary periods, as NC Health News reports.  The second is an increased use of federal funds through available block grants to expand access to programs like child care, which limits the state commitment to fund these programs.

Here are a few of the key items in the HHS budget: Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

Follow the Money: How the joint budget is funded

Last night, the House and Senate held a press conference, and they subsequently released their joint budget agreement, which will be voted on over the next week or so in both chambers.

The final budget holds to the rigid formula of population plus inflation, spending only $22.3 billion to operate core public services, as well as meet the needs of a growing state population undergoing significant demographic shifts and the persistent challenges in ensuring that every community has access to opportunity. This spending level is a mere 2.8 percent above spending for the current fiscal years and does not reflect the actual needs of North Carolina. Opportunity exists to invest in North Carolina to meet those challenges and pursue every opportunity for greater success and well-being; however, policymakers have instead chosen to reduce the state’s collective commitment bringing state spending to 4.14 percent relative to the size of the economy, well below the historic average of 6 percent.

Lawmakers are relying on a largely disproven theory that cutting public spending and reducing taxes for the wealthy and profitable corporations will deliver improved economic outcomes for all North Carolinians. Some point to the state’s apparent recovery, which mimics the overall national recovery, but lawmakers have failed to address the fact that wages aren’t recovering for everyday North Carolinians, there aren’t jobs for everyone who wants to work in the majority of North Carolina counties, and there is persistently high poverty in urban and rural communities alike.

Our leaders’ loyalty to severe budget constraint and lopsided tax cuts, which primarily benefit profitable corporations and the wealthy, are making it impossible for them to meet the needs of communities and families across the state. And as research and prior experience shows, this tax-cut, disinvestment approach will not deliver the economic gains they promise. It diminishes the ability of the state to pursue the investments that do deliver returns to the broader economy: preparing every child for kindergarten, increasing post-secondary attainment of the workforce, and targeting investments in main streets and small business development in struggling areas, for example.

While most of the public budget debate this week will be on the spending side (see our initial take here), examining how the North Carolina General Assembly plans to pay for their proposal is just as important. They pay for their 2017 budget proposal in the following way: Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

Statement from Budget & Tax Center Director Alexandra Sirota on final state budget

All of the state budget proposals this year have fallen short of what it will take to get North Carolina back on track. The final budget agreement appears to be no exception based on the press conference releasing topline details this evening. Rather than respond to what families, communities and the economy need to thrive, policymakers have followed a rigid formula divorced from our day to day realities.

The final budget agreement continues to plow ahead on the path to a reduced income tax and an expanded sales tax that will continue to benefit the wealthiest North Carolinians and profitable corporations at the expense of our communities and working families.

The reality is that North Carolinians know the path to a better future is built through shared commitment to good schools, protection of air and water quality, support for main street development and other building blocks of a strong economy and healthy community. It’s time for lawmakers to see that as well.