NC Budget and Tax Center

Many items you may have not heard about in the General Government budget

Often overlooked amidst the hubbub over big ticket budget items, the General Government section of the joint budget catches a range of items from one-off technology purchases to the operation of many of the state’s administrative functions. While a more complete list is provided below, a few items deserve to be highlighted.

First, the North Carolina Senate will give themselves more operating funds, without a similar bump for the House. There may be perfectly legitimate reasons that the NC Senate needs more funds to do its work, but it is curious to see the chamber that generally takes a harder line on reducing government spending going in the other direction when it comes to its own operations.

Second, increased funding was made available to manage ConnectNC Bond Act projects. While bond proceeds will pay for primary construction activities, budget writers still needed to increase the state’s capacity to oversee the process. As many observers have noted, the ConnectNC Bond act will accelerate the building of new state infrastructure, but it will also require General Fund appropriations to maintain and use the new facilities that will be built.

Third, the legislature wants even more study on how to lease or sell “underused” state properties.  The budget includes $600,000 to study which properties are good candidates to be leased or sold, even though this topic has been the subject of substantial review over the last several years. There likely are some state properties that could be sold or leased, but it’s unlikely that the scope of the unknowns in this arena justify more than half a million dollars’ worth of new study. Let’s hope the analysis correctly identifies enough truly dispensable state assets to at least cover the cost of the study.

Fourth, additional funds were made available to invest in low-income housing. Here budget writers seem to recognize that the need for affordable housing in North Carolina far outstrips the supply, so it is heartening to see additional resources directed to this area of need. Read more

NC Budget and Tax Center

Floor debate brings false claims, misses key facts

Tuesday night, the Senate debated and passed House Bill 3, a proposal containing multiple changes to the state Constitution including provisions that would set arbitrary and low income tax rates in the state Constitution and limit access to the state’s savings in times of emergency.

The debate itself was full of false claims, and it represented a failure to embrace the reality of how North Carolinians are doing and communities are faring under the tax-cut-for-millionaires regime of the current General Assembly leadership.

Here are some of the false claims made and key facts missed:

False Claim #1: Cutting the income tax and expanding the sales tax base has given North Carolinians a net tax cut.  Changes to the tax code have resulted in nearly $1.3 billion less in revenue coming in to the state, which has made it impossible for policymakers to provide teachers and state employees a pay raise or make sure college remains affordable for students with low-incomes, children have textbooks and pre-schoolers at risk are prepared for kindergarten.  Those losses in revenue have generated losses for families and communities, and the broader economy has missed opportunities.

At the same time, it has not given every North Carolinian a net tax cut.  In fact, those taxpayers with incomes below $34,000 have seen their taxes go up on average, and those with incomes averaging $1 million (the top 1 percent of taxpayers) have seen their taxes cut by $15,000 on average. Read more

2016 Fiscal Year State Budget

Budget takes one step forward, two steps back on job training

North Carolina’s workers have been waiting for weeks to see how state legislators would address their needs, and now that the wait is over, they’re getting very little besides bad news. Not only does the compromise budget eliminate workplace health and safety inspectors at the NC Department of Labor, it also represents a missed opportunity for reinvesting in the state’s job training and workforce development system after years of cutbacks. This startling lack of investment is due largely to recent rounds of tax cuts that will reduce state revenues by as much as $2 billion in future years.

First, the good news: the budget strengthens state support for apprenticeship programs that allow participating workers to receive occupational job training from local community colleges while working for a participating employer. These programs provide workers with classroom instruction and on-the-job training on the way to earning an associates’ degree or a recognized occupational credential—and they have proven to be effective at ensuring workers get the training they need and securing job placement when they finish.

Specifically, the budget allocates $500,000 in state funding to support the administration and curriculum development of these programs and $110,000 in tuition waivers for students participating in apprenticeship programs. In effect, the tuition waivers reduce or eliminate the cost of enrollment for participating students.

But while the budget takes a step forward with apprenticeships, it takes two steps back in other areas of workforce development. After years of shortchanging community colleges and an enormously complex administrative overhaul of the state’s workforce development system, the budget does almost nothing to put these economically essential programs back on a path to success.

Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

ANER budget doubles down on marketing, spreads a few modest investments around

The Agriculture and Natural and Economic Resources (ANER) budget makes one thing clear: North Carolina has image problems. Scattered throughout this section of the budget are a variety of additional funds to support marketing, promotion, and public relations work. New funds are made available to market North Carolina’s agricultural products overseas, to boost the state’s image as a business destination, to promote tourism, and to recruit foreign companies to the Tar Heel State. All of these activities were already supported to some degree by state funds, so the new appropriations show that budget writers are concerned about North Carolina’s image across the U.S. and around the world.

Some important new investments are included, but the ANER budget leaves many of the fundamental economic and environmental challenges facing our state unaddressed. Some of the notable funding increases include additional support for rural downtown revitalization, water and wastewater infrastructure, and shellfish industry development. While there is merit to most of the areas where additional funding is allocated, the ANER budget lacks a cohesive vision for a prosperous future.

See below for a list of selected changes included in the ANER section of the budget: Read more

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