NC Budget and Tax Center

Yesterday I read about the new #BrandNCProject that the Department of Commerce had launched with UNC’s business school. News of the effort immediately drew mockery from some those who don’t like the direction the state is going in in comments sections of news articles and on Twitter.

The survey asks us what words best describe our enduring core values we hold as North Carolinians. The examples include kindness, diversity, loyalty, friendliness, compassion and courage.survey screen shot

“Enduring core values are basic fundamental principles that guide our individual behavior and both determine and reflect how we think and act toward others,” the survey’s instructions state.

I earnestly tried to answer this survey as a North Carolinian who cares deeply about my state’s future and wants its brand stand out, and as someone who wanted to possibly shape this project’s development.

I tried, but I couldn’t.  That’s because I believe holding values and practicing values are two different things. Building, sustaining and practicing “enduring core values” is hard work that is never completed. It takes investment and examination.

Living a principled life is a journey, maybe even a battle. It’s about the sum of our actions.

So maybe we should step back and reflect on some different questions: How are we as North Carolinians living up to our values?  Are we on the right path to being the friendly, diverse, compassionate, fair, creative place we aspire to be? If not, how do we get there?

However important a brand might be –and I don’t dispute it is— it just feels like our leaders are again putting appearances first. And that is not an enduring core value I want for my state.

Unless lawmakers reverse course, nearly one million North Carolina families will claim the state Earned Income Tax Credit (EITC) for the last time this tax season—one year after Gov. McCrory signed a bill ending the tax credit, according to a new report from the NC Budget and Tax Center.

In 2013, North Carolina lawmakers put an end to the state EITC, which helps low-wage workers keep more of their income so they can afford basic necessities, like child care, while pursuing deep tax cuts that primarily benefit wealthy individuals and profitable corporations. Combined with the income tax cuts that benefit the wealthy, the loss of the state EITC tilts the tax system even more out of balance. The state’s tax system already asked more from low- and middle-income families than it did from those earning the most, and this makes the disparity even worse. The resulting tax shift is neither true tax reform nor good for North Carolina’s economy. Read More

“We can’t afford it.” This is the prevailing refrain of state leaders nowadays in their efforts to explain away or rationalize their waning support for investing in North Carolina’s future.

Whether the issue is pay raises for K-12 teachers and other state employees, supporting targeted economic development initiatives, protecting the state’s natural resources and environment, one repeated excuse is that revenue is not available for such public investments.

This excuse was used once again in a memo by Art Pope, State Budget Director, in response to the UNC Board of Governors’ (BOG) 2014-15 budget request. In the memo, Pope informs the BOG that its budget “simply is not realistic” and warns that funding the respective budget request “would require the Governor and General Assembly to make major reductions in other state agencies and programs, such as our courts, the “K-12” public schools, and health care.

North Carolina is NOT broke. The costly tax plan passed by the NC General Assembly and signed into law by Governor McCrory last year has created a self-imposed budget challenge. This challenge is occurring, as Pope acknowledges, even as the economy is improving. Read More

Last year state leaders passed a tax plan that will overwhelmingly benefit the wealthy and profitable corporations. The plan does little to rid the tax code of costly tax loopholes, it makes the state’s upside-down tax system even worse, and it reduces annual revenue by more than $650 million once all the new tax changes are in place.

As Gov. McCrory and state leaders try and “find’ revenue to provide a modest pay raise to only a portion of North Carolina’s public school teachers, more tax cuts for profitable corporations look to be on the horizon.

This week BTC released a policy brief that highlights an arcane tax policy change proposed by members of the NC General Assembly’s Revenue Laws Committees. This tax change – referred to as a single sales factor (SSF) apportionment formula – would only consider the sales component in determining the amount of state income taxes paid by corporations. The state’s current tax system uses a formula that considers a corporation’s property, payroll, and sales in North Carolina.

This tax change would provide a tax cut to only certain corporations, with no guarantee of job creation or a boost in economic growth for the state and would reduce revenue available for public investments by $90 million for FY 2015. This revenue loss would be in addition to the massive annual revenue loss under the tax plan passed last year. Read More

AF-Jobs

Crossposted on NC Policy Watch

Over the past few months, Governor McCrory has been claiming his policies—especially cutting unemployment benefits—are responsible for reducing the state’s unemployment rate. He’s even branded this the “Carolina Comeback.” But as it turns out, the Governor’s claims largely rest on treating jobs numbers like fruit—like apples, oranges, and cherries. In fact, the evidence for a Carolina Comeback is just plain rotten, and we’re still waiting for a real recovery in the state’s jobs market.

Most economists prefer to compare apples to apples by looking at job growth from year to year. And by any comparison of apples, the year stretching from December 2012 to December 2013 was worse than the year before.  Specifically, the year between December 2011 and 2012 saw the creation of 89,900 jobs, while the same period in 2013 saw the creation of just 64,500 jobs.

Even worse, over the last year, only three of every ten jobless workers who moved out of unemployment actually moved into a job in 2013. The rest just left the labor force altogether. Since December 2012, the labor force contracted by 66,500 workers, more than 1.5 percent, to the lowest levels in three years. At the same time, only 32,600 unemployed workers found employment. And all this while the state’s working age population continued to grow.

Read More