2019 Fiscal Year State Budget, Commentary, NC Budget and Tax Center

Legislative leaders refuse to engage with counteroffer on the table, risk community well-being statewide

Legislative leaders have failed to engage with the Governor’s counteroffer after his veto of a budget that continues to cut taxes for big companies while failing to invest in our children’s education, our workers’ opportunities for training, and our community’s infrastructure to protect our air and water.

Senator Berger and Speaker Moore seem to believe that inaction on a two-year spending plan for the state and even leaving town without a budget is perfectly acceptable since the state can operate under a provision in state statute that Republican leaders established a few years ago that sets out the spending rules when no agreement be reached between the legislative and executive branches.

And yet North Carolinians and communities across the state know that there is nothing acceptable about their inaction in the face of the responsibility they have been given to steward our tax dollars and support our collective well-being.

The failure to follow a budget process that seeks to negotiate priorities in the face of mounting community needs is a dangerous practice to engage in.  As has been evidenced with the use of federal shutdowns, the breakdown of the budget making process allows for problematic decision-making that is often ad-hoc, is beholden to special interests and a small segment of the legislative body, and ignores the responsibility of elected leadership to come to agreement on where to invest taxpayer dollars.

As the days and weeks drag on without engagement with the Governor’s counteroffer, legislative leaders will be forced to confront increasingly challenging budget issues. Stop-gap spending bills that have made their way through the Senate and House respectively can’t possibly address these challenges in a comprehensive and thoughtful way.

There will be no ignoring the need for a state budget as state employees receive their first paychecks without step increases, federal funds languish without the ability to deploy them, schools go back in session and there are more children than there are resources, and their policy choices like Raise the Age or Medicaid transformation require funding for implementation.  Read more

2019 Fiscal Year State Budget, NC Budget and Tax Center

What the House budget should include

The state budget is about our priorities for North Carolina, a reflection of what we value and how we plan to invest in our people and communities for the future.  Indeed, in its best version, a budget can serve as a roadmap for how we ensure each and every community in our state thrives.

But for years our vision for North Carolina’s future has been arbitrarily constrained by policymakers because of their focus on cutting taxes for the rich and big companies, an approach that isn’t going to help our long-term economic growth and is reducing our annual revenue by at least $3.6 billion so that we can’t invest in opportunity today.

As House members gather to discuss proposals for how our tax dollars will be invested in our collective well-being and begin full debate on their proposal next week, here are some key issues that a House budget (and any budget for North Carolina) should address:

  1. The arbitrarily low level of public investments despite a growing state. North Carolina continues to spend at a 45-year low as a share of the economy which means that we aren’t providing the same foundation we did in years past even as we seek to support stronger economic performance.  The research is clear that public investments in education, infrastructure, and health matter for our economic growth, potential, and quality of life. North Carolina can afford to make these investments if our leaders choose to invest in us rather than give tax cuts to the few.

Read more

2019 Fiscal Year State Budget, NC Budget and Tax Center

Governor Cooper proposes budget within confines of current tax code

Governor Cooper released a proposed budget for the next two years, but long-term structural challenges in funding services and programs will continue to plague North Carolina due to tax cuts that have primarily benefited the wealthy and big corporations.

Indeed, Governor Cooper’s boldest investments in education and health are made possible through bond financing, tapping heretofore untapped federal funding streams and enacting provider assessments to meet the state match for Medicaid expansion.

Given the political realities that remain on Jones Street, the Governor’s budget makes no changes to the state tax code, which is upside-down and inadequate to meet the needs of a growing state.

In many areas, priorities identified in communities and by North Carolinians will continue to go unmet.  This budget proposal makes clear the damage of cutting taxes for the wealthy and profitable corporations to our communities.

Let’s hope members of the General Assembly embrace the fiscally responsible approach to our state’s health care crisis and recognize that a similarly sustainable and fiscally responsible approach to supporting all aspects of the lives of North Carolinians is needed and must include raising revenue.

Here are four points that provide a review of the Governor’s budget proposal.

  1. State spending as a share of the economy will continue below the 45-year average.

The proposed budget for the next two years holds spending at historically and arbitrarily low levels as a share of the economy.  The first fiscal year of the two-year budget would invest at 5.04 percent of state personal income, while the second fiscal year appropriates state dollars at 4.98 percent of state personal income. A base level of public programs and services can support the growth and health of an economy, support family and community well-being, and ensure children have a path to greater opportunity. Arbitrarily low levels of spending as a share of the economy that don’t reflect community needs undermine that role for public investments. Read more