Falling Behind in NC

Falling Behind in NC, NC Budget and Tax Center

Late last evening, the House leadership released their full $20.6 billion budget proposal (with money report) for the next fiscal biennium. This proposal includes a placeholder for their long-awaited tax reform plan, which anticipates deep reductions in tax rates and significant revenue losses, putting North Carolina on an unfortunate path to mediocrity.  Along with the effort to repeal the estate tax, the House tax plan represents a major tax shift and would strip the state of more than $525 million that could be used to fund vital public services, help get North Carolinians back to work, and build a strong economy.

North Carolina cannot afford to pay for tax cuts for the top at the expense of teacher layoffs, growing waiting waits for critical public services, and higher tuition rates. As the chart below illustrates, state spending under the House proposal would continue to remain well below pre-recession levels even though spending over the base budget would slightly increase thanks to the slight uptick in revenue. See this chart to see how the House proposal compares to the Senate and Governor’s proposals. Read More

Falling Behind in NC, NC Budget and Tax Center

Governor McCrory’s budget proposal, while representing a small step toward overall reinvestment, fails to fully support crucial public investments and North Carolina’s most vulnerable residents, according to a new report from the Budget & Tax Center. The Center also released a companion factsheet that highlights the report’s analysis of five important issues that remain part of the untold story on the proposal. The five points are summarized below. Read More

Falling Behind in NC, NC Budget and Tax Center

It is true that the Governor’s budget proposal reinvests in some programs and services to achieve an overall increase in General Fund appropriations.  This reinvestment was made possible by improvements in the availability of revenue under current law, 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 are failing to keep up —let alone make progress back to pre-recession levels of spending.

There are two primary vantage points for analyzing the Governor’s budget proposal and making comparisons over time.  One method is to measure his proposal against the current law budget, which reflects the actual dollars that were appropriated last year per the final FY2012-13 budget.  The other method measures his recommendations against the continuation—or base—budget, which reflects the dollars needed in the next year to maintain current service levels.  The latter comparison provides a better sense of what is necessary to maintain residents’ current experience of public service because it accounts for the changing costs required to deliver the same level of services approved by the previous General Assembly. The chart below contrasts the Governor’s budget proposal to each of these vantage points. Read More

Falling Behind in NC, NC Budget and Tax Center

North Carolina’s transportation system helps form vital social and economic structures by connecting people to services, jobs, and other opportunities across the state and beyond. Although North Carolina has been known as the Good Roads State, its transportation system is under considerable pressure due to aging infrastructure, increasing demand, and declining revenue sources that are failing to keep pace with rising costs to maintain and improve the system.

Just last August, the North Carolina Department of Transportation confirmed that there is a large and growing gap between transportation needs and funding. They released a report estimating that the state is facing a $60 billion shortfall for transportation improvements through 2040, and that the state needs to come up with $32 billion just to keep the status quo. Ultimately, legislators control the purse strings as well as revenue options so solving this budget shortfall is largely up to them. Read More

Falling Behind in NC, NC Budget and Tax Center

Since the Great Recession and well-into the economic recovery, the state’s commitment to the well-being and safety of North Carolinians has wavered. The current FY2012-13 state budget provides the proof because it falls far short of investing adequately in the health, safety, education, and economic security of families and their children in the state. The budget’s shortcomings in the health and human services (HHS) infrastructure affect North Carolinians at nearly every life stage and can literally impact their longevity and vitality.

HHS funding aims to ensure that the state’s future citizens thrive early, seniors have access to quality and affordable health care, people with disabilities have the supports they need to contribute to their communities, and that food consumed by diners is safe. The HHS budget totals nearly $4.7 billion, making up 23 percent of the total General Fund budget. And, funding for this section of the budget is down by 8.3 percent compared to pre-recession levels (FY2007-08). The figures below highlight the top 3 ways the HHS budget is falling behind anticipated demand for services. Read More