NC Budget and Tax Center

NC Budget and Tax Center

The release of the 2013-2014 Economic Snapshots for all 100 counties provides another opportunity to reflect on how our communities are faring in today’s economy. The official economic recovery began in mid-2009 but has been slow to replace the jobs lost during the Recession and quick to produce primarily low-wage jobs that are holding incomes down and keeping poverty high.

A new interactive at NC Policy Watch features a few socio-economic indicators from the snapshots, including the change in employed persons since 2007, the poverty rate, the graduation rate, life expectancy and nominal median hourly wage change over the recovery. Below is a preview of the findings but you can find all the county profiles here and one for North Carolina too. Read More

NC Budget and Tax Center

This week at Prosperity Watch, we featured analysis of the role that immigrants are playing in communities that would otherwise be experiencing population decline. Immigrants represent not only a benefit in changing the demographic picture in a county.  Since immigrants are more likely to be of prime-working age, participate in the labor force and own a business than the native-born population, immigrants can make a powerful economic contribution to North Carolina’s rural counties in particular. Research has shown that immigration supports employment growth, that immigrant integration into diverse occupations delivers greater resiliency to a region and that immigrant-owned businesses can have a powerful revitalization force in communities.

Now new analysis from the Center for American Progress finds that, not surprisingly given the work referenced above, that the Executive Orders on immigration that would provide temporary status to parents of children born in the United States (DAPA) and enhance the program for childhood arrivals would generate economic benefits for the country.  From their analysis: Read More

NC Budget and Tax Center

Deep in the weeds of the House budget is a provision that would authorize the state to issue just shy of $300 million in new debt to pay for five large projects. Each of these projects (listed below) has merit, but this proposal raises two important questions:

1) Why do we have to issue debt to pay for these projects?

2) What will we have to give up down the road when the bill comes due?

North Carolina shouldn’t have to borrow the funds for these projects. Don’t forget, the tax cuts passed in 2013 already cost the state nearly a billion dollars this year, much more than would be needed to cover the costs of these projects.

The 2013 plan will also slash corporate taxes even further over the next two years. If the scheduled corporate tax cuts go into effect, it will cost the state an additional $100 million next year and another $300 million the year after that. If we hold off on additional corporate tax cuts, North Carolina could pay for these projects outright.

Ultimately, this means throwing money out the door in interest payments to keep cutting taxes for wealthy individuals and corporations. The Fiscal Research Division estimates that interest payments on the new bonds will start at $22.7 million next year and then rise past $28 million in the subsequent years.

The interest payments alone would be enough to cut the waiting list for pre-K in half, or put 1300 teacher’s assistants back into North Carolina classrooms, or avoid raising tuition at Community Colleges (as is slated to happen in the House’s budget).

Overall, the House spending plan is moderate compared to budgets we’ve seen over the last few years. But, even while it’s taking a step in the right direction, the House still cannot get around the enormous hole that we started digging in 2013. That’s why, when we need to invest in North Carolina’s future, the House is reaching for the credit card instead of writing a check.

Projects to be funded with bond revenues:

  • Phase 1 of new Highway Patrol Training Academy ($30 million)
  • DHHS Medical Examiner Lab ($13 million)
  • NC State Engineering Building ($65 million)
  • UNC Charlotte Sciences Building ($90 million)

Appalachian State Health Sciences Building ($71 million)

2015 Fiscal Year State Budget, NC Budget and Tax Center, Raising the Bar 2015

Raising the Bar in North CarolinaThis post was written by Michael C. Behrent, associate professor of history, Appalachian State University and is part of the Raise the Bar series featuring expert views on the North Carolina budget debate.

Is our state government doing all that it can to offer North Carolinians the affordable, high quality education they need to secure twenty-first century jobs? Based on data in a recent report from the Center on Budget and Policy Priorities, the answer is clearly “no.”

Affordable public education in North Carolina is a right. Our state constitution states that the legislature must ensure that “the benefits of The University of North Carolina and other public institutions of higher education, as far as practicable, be extended to the people of the State free of expense.” Yet today, free public education is little more than a distant memory. To make matters worse, our citizens find themselves in a college crunch: they are being asked to pay more and more for public universities that are providing less and less.

According to the report, since 2008, tuition at North Carolina’s public universities has grown by 35.8% (or $1,759). The main reason? The 2008 recession, which cut the flow of tax dollars into state coffers at the very moment when many people were choosing college over a grim job market. As state funds dried up, most public universities turned to tuition hikes as an easy fix.

Yet the recession doesn’t bear all the blame: many state legislatures, including North Carolina’s, took advantage of the budget crisis to push questionable ideological agendas. Specifically, they rejected a balanced approach that would combine spending cuts with tax increases, preferring to slash budgets. Universities thus had little choice but to ask students to pay the balance. Read More

2015 Fiscal Year State Budget, NC Budget and Tax Center

As an exercise in reflecting the state’s priorities, the House budget falls short. North Carolinians know that ensuring our children’s education is of the highest quality, that our communities can thrive and that our public services—from courts to transportation to environmental inspections—are effective and efficient means committing to fund those things together.

The House budget, like the Governor’s budget before it, assumes that the state can’t afford to invest. But our current availability is limited by policymakers’ own tax choices that reduce resources that support the foundations of an economy that will work for everyone. Policymakers already allowed a second round of tax cuts for profitable corporations and wealthy taxpayers go into effect in January and will cut taxes again for profitable corporations because revenue collections exceeded expectations and met the trigger for further tax cuts. Because the trigger threshold was set arbitrarily low, however, meeting the trigger does not reflect the realities of needs in our communities.

This choice—to hold back the state from reinvesting by prioritizing tax cuts over building a stronger economy—means that there is a lot missing from the House budget. In light of the historic decline in revenues resulting from the recession and its aftermath, policymakers have effectively curbed the state’s ability to reinvest due to tax cuts. The result is missing investments that can mean the difference for children, families, businesses and communities in doing well in our state and the missed opportunity to grow our economy stronger and more competitive.

Here are five missing investments that the Budget & Tax Center has identified: Read More