NC Budget and Tax Center, Trump Administration

Report: “Budgets” a top 5 issue for cities, particularly 98% of all towns in North Carolina (and why Trump’s budget could bankrupt them)

President Trump and the NC Senate have already proposed drastic budgets that would hurt millions of low and middle-income households across the country and here in North Carolina. If all politics is local, it is important to listen to what cities and towns have to say.

The 2017 State of the Cities report released this week by the National League of Cities (NLC) finds that economic development, public safety, infrastructure and budgets are the top issues for communities around the nation.

The report points out that ‘budgets’ are particularly a top issue for states in the South, especially in towns and cities that have populations under 100,000. For NC, this is very concerning considering that 98 percent of all cities and towns in the state, spread across 89 mainly rural counties, have populations under 100,000. Moreover, 75 percent of all cities and towns in North Carolina have populations under 5,000. In other words, 543 cities and towns in NC – out of 552 – are highly likely to be concerned about their budget and therefore see it as a top issue.

The report points out that ‘budgets’ has remained one of the top 4 issues for cities each of the past 4 years.

Here’s the full list of the top 10 issues that matter to cities in 2017:

  1. Economic Development: (Job creation, business attraction, downtown development)
  2. Public Safety: (Investing in police and fire departments, increasing transparency)
  3. Infrastructure: (Addressing maintenance issues with roads and aging infrastructure)
  4. Budgets: (A focus on planning for the future amid grand funding concerns)
  5. Housing: (Affordable housing, homelessness, and zoning ordinances)
  6. Education: (Preparing the workforce of the future)
  7. Energy and Environment: (Impact of climate change and the need to be resilient)
  8. Health: (Addressing the opioid crisis and creating a culture of health)
  9. Demographics: (Countering national fervor by embracing diversity)
  10. Data & Tech: (Becoming innovative by integrating technology into city operations)

Trump’s Proposed Budget Could Bankrupt Cities and Towns

As it pertains to budgets, it is worth noting the National League of Cities issued the following statement this week after President Trump released his proposed budget:

“The administration’s budget proposal would be devastating to cities and towns. No community in America would be better off with this budget, and it could bankrupt smaller cities and towns. It does nothing to create jobs in our communities, and violates the president’s core campaign promise to lift up Americans in communities across the nation.

The White House ignored more than 700 city officials who urged the administration to protect crucial programs, including Community Development Block Grants, TIGER grants and the HOME Investment Partnership Program. These vital programs allow communities to invest in public safety, economic development and infrastructure, and create private-sector jobs.

The budget proposal would have a disproportionate impact on America’s small cities and towns, whose budgets are already stretched thin. In these communities, the programs being targeted are a lifeline for maintenance and investment. For those communities, this budget would spell disaster — and, in many cases, bankruptcy.

As the leaders of America’s cities, we call on Congress to throw out this budget proposal and develop a new plan focused on building prosperity, expanding opportunity and investing in our future. Congress must reject this budget proposal or risk derailing local economies nationwide.”

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.
NC Budget and Tax Center, Trump Administration

President Trump’s budget does not add up ($2 trillion math error)

President Trump’s proposed budget was unveiled earlier this week and it includes a $2 trillion math mistake.

According to the proposed budget, “a comprehensive overhaul to our tax code will boost economic growth and investment”, and assumes an aggressive 3 percent growth in the economy. This of course differs significantly from the Congressional Budget Office (CBO) projection of moderate 1.9 percent economic growth over the next ten years reported in its most recent budget and economic outlook. [Note: this large a gap between an administration’s growth forecast and CBO’s is unprecedented (see graph).]

Due to the exaggerated growth assumption, Trump’s budget assumes a $2 trillion increase in revenue through economic growth that will balance the budget. However, the math does not add up as the Trump tax cut is also supposed to pay for the Trump tax cuts. So the $2 trillion is a double-counting error.

In other words, the assumed $2 trillion from higher growth is a double-count as it pays for the Trump tax cuts, and then it pays again for balancing the budget.

Overall, it is clear that Congress must step up and craft a budget that actually adds up and is grounded in serving all of the American people.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.
NC Budget and Tax Center, Trump Administration

Trump budget goes after vulnerable children and families. Sad!

President Trump vowed to support working families by beefing up crucial supports like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). In an unsurprising twist, Trump has reneged on that promise and proposed slashing the EITC and CTC by $40 billion. Instead of supporting working families, he’s proposing raising taxes on the most vulnerable.

The 22 percent of North Carolina households who qualify for these income tax supports are working hard to raise their children and put food on the table. In stark contrast, the President’s budget proposes tax cuts for the country’s wealthiest taxpayers and estates.

Working family tax credits pay off in the short term by alleviating poverty. They also produce long term benefits. Low-income families receiving supports such as the EITC tend to have improved infant and maternal health, better school performance and college enrollment, and increased work and earnings in the next generation.

This budget proposal shifts a huge burden of responsibility onto state governments. Not the least of which will be renewed urgency for state leaders to establish a state Earned Income Tax Credit.  As I wrote about last week, we’ve just fallen behind South Carolina in this regard.

The White House has made it clear that it won’t prioritize working families. Instead, it’s making it harder for them to make ends meet, while the wealthy get another break. North Carolina families need their lawmakers to embrace their responsibility to us all. We need leaders who understand that building a strong economy means making sure all families can thrive, not just rich ones.

Marion Johnson is the Policy Advocate for the Budget & Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center

Putting a face on Hunger in North Carolina

North Carolina is the 8th hungriest state in the U.S. Each night, nearly 630,000 households, many with children, do not have enough food to eat. The Supplemental Nutrition Assistance Program (SNAP, also known as FNS or food stamps) is an extremely important tool in fighting hunger in our state. In 2015, 1.6 million North Carolinians benefited from SNAP. In addition to placing food on the table, SNAP benefits pumped $2 billion into the North Carolina economy last year.

Here’s a story driving home how critical SNAP is for North Carolinians supporting their families:

Despite SNAP’s efficiency and history of success, the program is under attack.

This year, state lawmakers are attempting to reduce the number of families who receive SNAP benefits. The N.C. Senate budget aims to eliminate SNAP for 133,000 low-income North Carolinians by eliminating a policy known as categorical eligibility.

Last year, state lawmakers imposed an unnecessary three-month time limit on adults who need SNAP who are living in communities with little or no job opportunities. As a result of this policy, up to 100,000 people may be denied SNAP benefits while they work to get themselves back on their feet.

The president’s budget, released yesterday, aims to shift the costs of SNAP away from the federal government, and onto the states. Over the next ten years, North Carolina would have to come up with $3.9 billion in order to continue to provide SNAP to people who need it.

Many of the attacks on SNAP and other programs are based on stereotypes and misconceptions about who in our state needs help. If policy makers took a closer look, they would see that programs like SNAP help people like Darrell who are simply doing their best to make ends meet in spite of circumstances.

A strong North Carolina is one where everyone—children, adults, the elderly, the employed and those out of work—is in a position to succeed and do their best. If we choose support those who need help the most, rather than punishing them, we can help North Carolina thrive.

Brian Kennedy II is a Public Policy Fellow with the Budget & Tax Center, a project of the North Carolina Justice Center.

 

2018 Fiscal Year State Budget, NC Budget and Tax Center

Twelve more big policy changes buried in the N.C. Senate budget

There are a lot of issues with the N.C. Senate budget proposal as drafted. One issue is the sheer number of major substantive policy changes, including in the biennial spending proposal. Absent a full debate by policymakers and public input on each of these items, it is impossible to fully consider the multitude of ways in which the systems serving North Carolinians and communities will change as a result of the passage of this single bill. We noted a dozen such items in a post last week. Here are another dozen that should give further support to the notion that the House needs to start from scratch with a budget proposal that truly seeks to serve the broader good:

  1. Increases expenditures on ads for the North Carolina Education Lottery to 2 percent up from 1 percent (page 10, Section 5.3 (b))
  2. Converts state’s drivers education program provided to students to a reimbursement program that will likely price-out and reduce the number of low-income students served by program (page 31, Section 7.21 (b))
  3. Establishes individual county Departments of Social Services as financially responsible for erroneous issuance of Medicaid benefits and Medicaid claims payments (page 174, Section 11H.22(f))
  4. Eliminates the local school board statutory authority to file funding lawsuits against its county (page 53, Section 7.30)
  5. Eliminates longevity pay for principals and assistant principals (page 57, Section 8.3(a))
  6. Creates the Legislative School to replace the Governor’s School and gives the authority to approve the curriculum to the UNC Board of Governors (page 74, Section 10.16(a))
  7. Increases the age of juvenile jurisdiction except for certain felonies but without funding for the juvenile justice system (Section 16D.4(a))
  8. Aligns Department of Transportation program for participation by disadvantaged minority-owned and women-owned businesses with federal law to limit requirements and application to specific projects or contracts (page 317, Section 34.15(a))
  9. Requires the return of Bicycle and Pedestrian Planning Grant funds if projects in a municipality or county fail to be completed within six years despite long-time frames for securing all funding needed, review by all relevant agencies (page 32, Section 34.22(a))
  10. Eliminates Pesticides Advisory Committee (Page 195, Section 12.1)
  11. Creates new Site and Building Development Fund, a loan fund designed to help communities put up shell buildings, water/sewer, access roads with no clarity on how it will interact with the existing Industrial Development Fund, which provides grants for the same purpose (except buildings) (Page 229, Section 15.7)
  12. Earmarks Rural Division grants for specific projects in lawmakers’ districts (Page 232, Section 15.8)