Falling Behind in NC

Falling Behind in NC, NC Budget and Tax Center

The NC Budget and Tax Center released a new report today showing that the two-year budget approved by state legislators and signed by Governor McCrory falls far short of what is required to meet the needs of children, working families and communities. Although the 2014 budget exceeds last year’s in overall dollars, spending falls short of what is needed in 4 of the 6 major budget areas—including public education (see the chart below). And, spending as a share of the economy is still below the 40-year average.

Instead of investing adequate resources in schools and the other building blocks of a strong and enduring economy, state lawmakers chose to make room for tax cuts for the wealthy and profitable businesses that will cost more than $2 billion over the next five years. State lawmakers could have made better choices by pursuing true tax reform that would have strengthened revenues and allowed the tax system to grow with the economy.  That would have put North Carolina on a stronger path to recovery.  Instead, they chose to go in the opposite direction. Read More

Falling Behind in NC, NC Budget and Tax Center

It is true that the final budget reinvests in some programs and services to achieve an overall slight increase in General Fund appropriations. This reinvestment was made possible by using unspent dollars from last year’s budget, budget gimmicks, the reliance on tuition increases and fees, as well as reductions in other areas of the budget. However, state investments in most areas of the budget—including education—are failing to keep up after years of budget cuts.

There are two primary vantage points for analyzing the final budget and making comparisons over time.  One method is to measure the final budget against the actual dollars that were appropriated last year in the 2013 budget.  The other method measures the final budget against the continuation—or base—budget, which reflects the dollars needed in the next year to maintain current service levels.  The Governor’s Office of State Budget and Management, which is headed by Art Pope, collaborates with the various departments and agencies to determine the continuation requirements.

So, which vantage point makes for the best comparison? Read More

Falling Behind in NC, NC Budget and Tax Center

Yesterday evening, legislators released a $20.6 billion budget compromise that will likely to be voted upon and sent to the Governor’s desk for final approval later this week. This budget shorts investments in vital public services, and fails to catch up and keep up with the needs of a growing North Carolina population across major service areas (see the chart below). Some of the budget cuts could have been avoided had lawmakers decided not to drain available revenues by $524 million over the next two years through an ill-advised series of tax cuts that primarily benefit the wealthy and profitable corporations.

As the Director of the NC Budget and Tax Center asserted in her statement, “This revenue loss isn’t just a number on a piece of paper—it means fewer teachers in more crowded classrooms, higher tuition rates and elevated debt load for families, scarcer economic development opportunities for distressed communities, and longer waiting lists for senior services.”

Final_falling behind

Here is a short list of noteworthy items in the major budget areas:

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Falling Behind in NC, Uncategorized

North Carolina has dropped one place since last year to rank 35th in the nation according to an annual KIDS COUNT data report about the overall well-being of children in the United States. This data report determines and ranks states on the basis of performance in sixteen level indicators across four domains; economic well-being, family and community, health, and education.

North Carolina’s drop to the 35th spot largely results from the state’s lackluster performance in improving its economic well-being. Currently, North Carolina is ranked 38th in the nation for economic well-being, three spots below last year’s ranking. This data report breaks down economic well-being into four categories, each of which North Carolina failed to show any progress. The KIDS COUNT State Profile for North Carolina reports that twenty-six percent of children are impoverished and thirty-four percent of parents lack secure employment in this state alone. Accordingly, in North Carolina, the amount of children living in households with high housing burden costs has seen a four percent increase since 2005, and ten percent of teens are currently not working or in school.

In comparison to last year’s report, Read More

Falling Behind in NC, NC Budget and Tax Center

This is the fourth post of a week-long blog series that seeks to uncover just how far behind North Carolina’s current services levels are compared to pre-recession levels as well as how far behind the state would fall if the House and Senate tax plans were implemented. Previous posts are available here, here, and here.

North Carolina’s revenues are slowly recovering but still deeply damaged by the recession. Regaining the ground that we have lost will be more difficult in the coming years because state lawmakers are pursing deep and lopsided tax cuts that will put at risk the critical public services that help build the engines of long-term economic growth.

There is much ground to be regained in North Carolina’s public education system, which prepares our children for the jobs of the future and participation in civic engagement.

North Carolina is investing less in public education than when the recession began. Total state funding declined by 10 percent since the 2008 fiscal year while enrollment increased by 2 percent—a modest but steady rate. This means that there are $883.1 million fewer dollars (adjusted for inflation) in state funds available today for education compared to 2008 despite having 31,000 more students to educate. Read More