NC Budget and Tax Center

NC Budget and Tax Center

The latest quarterly revenue report by the General Assembly’s Fiscal Research Division (FRD) highlights that tax cuts do not explain the better-than-projected income tax revenue collections for the most recent fiscal year 2015.

According to FRD, two factors likely affected income tax collections for the most recent fiscal year.

  • Corporate taxable profits accelerated as wages remained low and write-offs on losses from the recession dwindled. This pushed collections 21.2% above forecast expectations.
  • Timing in personal income tax collections from changes enacted beginning with the 2014 tax year meant lower monthly withholding revenue – but higher final payments and smaller refunds in April. The forecast didn’t fully capture those dynamics leading to a shortfall the previous fiscal year and a surplus in FY 2014-15.

There’s evidence to support these two points. Corporate profits are at a record high as the economy recovers in part due to a steady increase in productivity. Meanwhile, wages for workers have remained stagnant – an indication that workers have not participated in the economic gains during the ongoing recovery. Furthermore, FRD notes that tax changes in recent years made it difficult to determine the timing of income tax revenue collections, resulting in a projection that was well below actual collections for FY 2014-15. Read More

NC Budget and Tax Center, News

Earlier this month, Congresswoman Alma Adams of the 12th District penned a letter urging Governor McCrory to veto a bill that would unnecessarily restrict food aid for childless adults who are very poor and live in areas where jobs are scarce—regardless of how hard they are looking for work.Adams_McCrory

States can temporarily suspend work-related time-limits on federal food aid for areas with sustained high levels of unemployment. North Carolina officials applied for a waiver in July for 77 of the state’s 100 counties due to a severe lack of jobs available that hampers North Carolinians’ ability to meet the work requirements. The bill, however, would permanently ban the Governor from ever pursuing this option irrespective of how local economies are faring or whether employment and training opportunities actually exist.

Between 85,000 and 105,000 unemployed childless adults in North Carolina would lose food aid in 2016 if the Governor signs this bill into law.* See this map of where they live.

“House Bill 318 is [a] significant step backwards for supporting the hungry as they look for work,” wrote Congresswoman Adams. “All this bill does is punish people in high unemployment areas and limits the state’s ability to meet the needs of the unemployed,” she continued.

Congresswoman Adams is part of a growing chorus of voices calling upon the governor to veto this measure, including the NC Justice Center, the NC NAACP, and the state Legislative Black Caucus. Governor McCrory has until October 30th to veto or sign the bill, which will become law if he takes no action.

See Representative Adams’ letter to the Governor below.


*Special data request to the Center on Budget and Policy Priorities. September 2015.

NC Budget and Tax Center

This week marks the 50th anniversary of the Immigration and Nationality Act, which helped to make the United States into a more diverse and economically vibrant country. At the same time however, there is a bill (HB 318) sitting on Governor McCrory’s desk that would make it harder for immigrants to integrate into local communities, make police work more difficult, and hurt North Carolina’s reputation on the global stage.

The Immigration and Nationality Act of 1965 is one of the most important pieces of legislation in our nation’s history. The Act put immigrants from all countries of origin on equal footing, ending a quota system that essentially ensured most new immigrants came from Europe. This shift in policy allowed immigrants from around the world to realize the dream of joining the American experiment, and helped to fuel the last fifty years of economic growth in our country.

Graphic for Post - Immigrant Entrepreneurs Countries of Origin

Examining immigrant business owners’ countries of birth illustrates how opening immigration up to non-European counties has strengthened our economy. As the chart shows, immigrant proprietors have come to North Carolina from all over the world.

The immigrant business community is not just broad, it is deep as well. In North Carolina, immigrants make up less than 8% of the population, but own more than 20% of the main street businesses. In many communities, both rural and urban, immigrant entrepreneurs have helped to revitalize crumbling downtowns and neighborhoods. Read More

NC Budget and Tax Center

The General Assembly used a few of the last hours of the 2015 session to cut back how long unemployed North Carolinians in economically distressed counties can receive food assistance. Even though this weeks’ labor market data show that 9 out of 10 counties have more out of work people than job openings, the new rule would cut unemployed people off regardless of how hard it is to find work. The change could take food off more than 100,000 tables across North Carolina, and will pull money out of already struggling local economies, a doubly bad deal.

The one-sentence provision in the ratified bill (see section 16.a) permanently prevents the state from seeking to extend food assistance for people who can’t find work in their local economies, except in times of emergency. The federal Supplemental Nutrition Assistance Program (SNAP) allows states to temporarily waive a three-month time limit for unemployed childless adults who live in areas where few jobs are available.77 waiver counties - Updated for Blog Post

Recognizing that cutting off food aid to areas where there aren’t enough jobs hurts entire local economies, North Carolina sought this waiver for 77 of our 100 counties earlier this year. If the Governor signs this measure and SB119 into law, the ban on the waiver would go into effect in July 2016. Without the modest support of SNAP (formerly known as food stamps), between 85,000 and 105,000 North Carolinians would be subject to the three month-time limit and potentially will not be able to purchase food at their local grocery stores, depressing consumer demand further and driving use of food banks already stretched to capacity. Read More

NC Budget and Tax Center

Amidst a flurry of legislation during this session’s waning hours, one provision added to HB 318 last week that would restrict how local communities deal with immigration will be heard in the House. As is so often the case with last minute bills, the real costs of this measure are not well understood, and they could be major.

The provision in question (on pages 5 and 6 of the bill) would invalidate local identification or policies that support local law enforcement efforts to achieve their goals for public safety and community building. This provision seems designed only to prevent local communities from implementing common-sense measures that protect public safety, and it could have negative consequences for local economies and local budgets.

Local public safety officials in Greensboro joined community leaders yesterday to caution state policymakers against moving ahead with this legislation.  They cited in particular the challenges it will have in helping immigrants report crimes and the likelihood that it will increase arrests as police will be unable to identify community members. A Burlington police officer shared: “If they limit the type of ID that we can accept, you’re gonna have a whole lot more people that are arrested and booked into jails tying up valuable law enforcement resources.” Read More