NC Budget and Tax Center

NC Budget and Tax Center

Immigrants are increasingly important to North Carolina’s long-term economic vitality. The smokescreen of rhetoric surrounding immigration can obscure facts on the ground, but that makes it all the more important to take a sober look at the actual evidence. As documented in a recent Budget & Tax Center report, immigrants bring needed skills and expertise, swell the ranks of Main Street entrepreneurs, help to reverse population decline in many rural parts of the state, and ultimately improve our communities.

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Comparing North Carolina counties with sizable immigrant populations to counties that have relatively new residents who were born outside of the United States provides perhaps the most compelling evidence that immigrants help communities to prosper. As shown in the table to the left, counties made up of more than 6% immigrants fare significantly better than counties where the immigrant population is less than 3%.

By allowing hard fact to scrub the political air, it is clear that immigrants help communities across North Carolina to prosper. On average, communities with substantial immigrant populations have lower unemployment rates and levels of poverty, and higher wages than communities with few immigrants. This trend also holds when you look at rural counties, evidence that immigrants help communities large and small.

This kind of evidence has more and more communities across the country extending a helping hand to immigrants. Cities like St. Louis, Detroit, and Charlotte, just to name a few, recognize that immigrants will play a huge role in their economic prospects going forward. Immigrants have always been part of America’s economic foundation. Our future economic vitality will depend on how well we build upon that legacy.

Legislative Update

House Bill 328, sponsored by Representative Harry Warren (Republican, Rowan County) was recommended by the House Finance Committee earlier this week on a 22-11 vote. The bill would allow undocumented immigrants who pass a criminal background check to receive a temporary driver’s license in North Carolina. The bill received bi-partisan support, but has an uncertain future. It is not clear when, or if, the bill will be debated by the full House. Governor McCrory has said that he opposes the bill and it is unclear how it would be received in the Senate. Still, the Finance vote is the second favorable vote in a House committee and the bill has support from a variety of constituencies.

For more on the Finance Committee vote, visit

 

NC Budget and Tax Center

The state Senate unveiled a proposal yesterday that would take the modest revenue gains that our state is experiencing and give them away in the form of tax cuts rather than reinvest them in the building blocks of community well-being. That would be a mistake. Lawmakers already deeply cut revenue collections in 2013 and this plan would double down on those cuts and flawed strategy.

The proposal would hand out more costly tax cuts to large, profitable corporations, lower the personal income tax for the third time, and slightly expand the sales tax to more services—all at the expense of everyday North Carolinians. It will neither enable the state to replace the worst cuts enacted in the aftermath of the recession nor restore the state’s economy to a sound footing, as my colleague explained yesterday.

The cost of the Senate leadership’s proposal grows to nearly $1.1 billion per year once the plan is fully phased in.* That cost is roughly the amount of money that the state invests in the entire Community College system, which serves all 100 counties and is tasked with preparing today and tomorrow’s workforce. Over the next biennium alone, revenue losses would total $951 million. That means a lost opportunity to catch up, rebuild, and keep up with the needs of children, families, and communities across the state.

All North Carolinians will the pay price. The graphic below illustrates the potential reach of those revenues and highlights how the revenue could instead be reinvested in things that benefit us all. Read More

Falling Behind in NC, NC Budget and Tax Center, Raising the Bar 2015

A tax plan state Senate leaders presented this week would promote neither shared economic opportunity nor prosperity across North Carolina. Far from it.

The proposal would cost more than $1 billion in annual revenue loss as the tax plan continues down the path of handing out more costly tax cuts to large, profitable corporations at the expense of everyday North Carolinians. This approach won’t restore the state’s economy to a sound footing.

The proposed tax plan does nothing about persistent stagnant wages, an uneven economic recovery in which all gains are going to the wealthiest North Carolinians, and the lack of economic and job growth in many parts of the state. Senate leaders would pay for only a portion of the income tax cuts by having North Carolinians pay more in sales taxes, which hit people making relatively low incomes the hardest. And the state would continue to walk away from its responsibility to make much-needed investments in our public schools, public colleges and universities, repair the state’s eroding infrastructure, and other building blocks of a strong economy.

Key aspects of the Senate tax plan stand out as strong reasons why its adoption would fail to promote broad prosperity.

  • The proposal’s reduction of the personal income tax rate to 5.5 percent from 5.75 percent has no benefits to the state’s economy or its competitiveness. At the cost of much-needed public revenue, the tax rate cut won’t drive significant job creation, motivate businesses or people to locate in North Carolina or encourage local investment. Not only do income tax rates affect these factors negligibly, if at all, North Carolina’s personal income tax rate is already in line with the region’s, falling in the middle among southeast states.
  • While putting a limit on how much in itemized deductions a taxpayer can claim is good policy, using the added revenue this produces to reduce tax rates isn’t. Because this proposal would place all itemized deductions—mortgage interest, charitable contributions, medical expenses, etc.—under the cap, it creates greater equity in the treatment of taxpayers. Capping itemized deductions reduces revenue loss from these deductions and helps address inequities in the tax code, as wealthier taxpayers typically benefit more from deductions.
  • Increasing the standard deduction is a wasteful way to address the problem of too many North Carolinians struggling to make ends meet because it deprives the state of much-needed public resources that could boost public investments that promote economic growth. A better way to help hard-working taxpayers keep more of what they earn is to adopt a strong refundable state EITC to help offset not only income taxes, but sales and property taxes that fall hardest on those with lower incomes.

Read More

NC Budget and Tax Center

Despite the clear need to make investments that will put North Carolina on sounder economic footing, the Senate is proposing another round of tax cuts that will hinder the state’s progress, including more income tax cuts and tax breaks for certain businesses. This is a strategy that has failed in many other states.

Now is a critical moment in the economic recovery, and we must leverage this moment to reposition the state’s economy to work for everyone. But this requires that lawmakers raise enough revenues to ensure a quality education for every child, support an efficient and impartial judicial system and provide for the health and safety of all North Carolinians.

If the Senate continues to pursue tax cuts above reinvestment, it will compromise our quality of life and competitiveness now and in the future.

NC Budget and Tax Center

Women will join together at the Bicentennial Mall (near the state legislature) at 5pm today to demand better public policies that would improve the lives of women and families. The rally is part of the North Carolina NAACP’s Moral Monday Movement Summer of Moral Resistance, with support from women’s coalitions such as NC Women United.moralwednesday

Speakers will lift up the fallout from Governor McCrory’s and the state legislature’s policies that have been to the detriment—not the benefit—of Tar Heel women. These policy decisions include the underfunding of education from early education and care to college, shifting taxes away from the wealthy and onto everyone else, failing to expand Medicaid, refusing to give workers the dignity of a minimum wage increase, and enacting the nation’s worst voter suppression law.

Just on the economy issue alone it is easy to see why women will show up tonight and use their voices for change. Women have made tremendous economic strides over the last few decades. Yet, women are still more likely than men to live paycheck to paycheck and struggle to pay the bills.

The fact that women face more economic hardships than men is well-documented in the data. Here are some quick facts from my latest poverty report, North Carolina’s Greatest Challenge, that put Tar Heel women’s economic struggle into perspective:

  • The poverty rate for women in the state was 19.3 percent in 2013 compared to 16.4 percent for men. That year, Tar Heel women earned just 82.9 cents for every dollar men earned.
  • Nearly 156,500 women in the state would have to be lifted out of poverty for women to have the same poverty rate as men.
  • Women of color face particularly high rates of poverty. In 2013, Latina, American Indian, and African American women were more than twice as likely to live in poverty as Asian and white women.
  • Three in four children who were poor lived in families with at least one worker.
  • Gender inequality extends into retirement age too: older female adults are far more likely to struggle to make ends meet than men.

Put simply, from Murphy to Manteo the economy is just downright broken for many women and their families. North Carolina needs policies that create equal opportunity and ensure that prosperity is broadly shared so that all North Carolinians can reach their potential. Yet, the policies that lawmakers are prioritizing are not aligned with the research and fail to meet this standard. Women and allies will join forces tonight to demand better choices to help ensure a better future for us all.

Your silence will not protect you—as Audre Lorde declared. Details are here if you want to join them.