2018 Fiscal Year State Budget, NC Budget and Tax Center

Statement: This budget deal is not worthy of North Carolinians

Statement on the budget deal from Alexandra F. Sirota, Director of the Budget & Tax Center, a project of the NC Justice Center:

The final budget that state lawmakers will vote on in the coming days reflects missed opportunities for North Carolina.  By pursuing more tax cuts even as states like Kansas have reversed course and abandoned their own failed tax-cut experiment, leaders of the NC General Assembly have chosen to stay the course and continue to do less for more North Carolinians.

The final state budget includes many of the worst ideas and budget decisions from the House and Senate proposed budgets — including cutting legal assistance for low-income residents, failure to provide needed additional funding for K-12 classroom teachers, and using increasingly uncertain federal dollars to meet ongoing state priorities.

North Carolina’s leaders should put forward a budget that truly reflects the priorities of our growing state, including healthy and safe communities, quality educational opportunities and skills training, thriving communities, and broadly shared economic prosperity. They should make a sustained commitment to rebuilding Eastern North Carolina after Hurricane Matthew instead of offering just a fraction of what is needed. Instead, lawmakers have chosen to give even more benefits to the wealthy and profitable corporations. As state leaders continue to dig their heels in on their failed tax cut experiment, it is time for leaders across the state to emerge and demonstrate the harm of another budget that is not worthy of North Carolinians.

NC Budget and Tax Center, Trump Administration

GOP’s health plan secrecy and Medicaid per-capita caps should raise alarms in NC

As Americans we should always expect a transparent and open government. An open government strengthens our democracy and promotes accountability, efficiency and effectiveness in government. Unfortunately, the U.S. Senate has continued to promote secrecy when it comes to its draft legislation to repeal the Affordable Care Act.

Yesterday, the New York Times covered this topic and was precise in pointing out that this secrecy has raised concerns among both Republicans and Democrats, stating:

“Senate Republican leaders are aiming to transform large sections of the American health care system without a single hearing on their bill and without a formal, open drafting session. That has created an air of distrust and concern — on and off Capitol Hill, with Democrats but also with Republicans.

I’ve said from Day 1, and I’ll say it again,” said Senator Bob Corker, Republican of Tennessee. “The process is better if you do it in public, and that people get buy-in along the way and understand what’s going on. Obviously, that’s not the route that is being taken.”

“In theory, the bill-writing process is open to any of the 52 Republican senators, but few seem to have a clear, coherent picture of what will be in it. Senator Ron Johnson, Republican of Wisconsin, offered a hint of the same frustration felt by Democrats seeking more information about the bill.

“I come from a manufacturing background,” Mr. Johnson said. “I’ve solved a lot of problems. It starts with information. Seems like around here, the last step is getting information, which doesn’t seem to be necessarily the most effective process.”

This secrecy, along with the fact that Senate Republicans plan to retain the Medicaid per-capita caps without major changes in their version of the House bill, is bad news for North Carolina. While per-capita caps would shift substantial Medicaid costs and risks to all states, North Carolina would face disproportionately larger cuts. [Note: Under a Medicaid per capita cap, the federal government would set a limit on how much to reimburse states per enrollee.]

The reason is simple, North Carolina is a state that meets most of the criteria laid out by the Center on Budget and Policy Priorities for states that would be most harmed by Medicaid per-capita caps. Below is a table with the criteria and a brief assessment of North Carolina against it. Read more

Commentary, NC Budget and Tax Center

Temporary economic slowdown or signs of worse to come?

The state and national economies continued to grow in May, but there are signs that economic momentum may be waning. Job growth through the first five months of 2017 was slower than in same period for either of the last two years, North Carolina has largely stopped making progress in bringing people back into the labor market, and our unemployment rate remains higher than the national average.

It’s too early to tell whether we are looking at a temporary blip or a major inflection point, but these signs are not encouraging. Given where the labor market is and where it could be headed, it is crucial that we bolster the systems such as Unemployment Insurance that protect people when the economy takes a downturn.

Here are a few of the indicators that point to a dip in economic growth:

Job growth has slowed in recent months: Year-over-year job growth in North Carolina averaged 2.5 percent for the first five months of 2017, below the 2.9 and 2.7 percent rates for 2016 and 2015, respectively. This slowdown underscores the need to ensure that our Unemployment Insurance system is prepared if the economy takes a turn for the worse. The U.S. has seen an unprecedented run of consecutive months of job growth, yet as we see weakening in the labor market, we must ensure we are not caught unprepared when the next economic downturn takes hold.

North Carolina’s unemployment rate is still above the national average: North Carolina’s headline unemployment rate remains below 5 percent, which still translates into over 220,000 individuals looking for a job and a higher rate of unemployment than the national average. In fact, North Carolina’s unemployment rate has been higher than the national average for the last six months, and has only been at or below the national rate for four months out of the last two years.

We have stopped making progress in bringing people back into the labor market: One of the most concerning indicators in recent months has been the lack of growth in labor force participation rate, or the share of North Carolinians who are either employed or actively looking for work. A lack of job opportunities drove many North Carolinians out of the job market during the Great Recession and although the state and nation had been making progress in bringing people back, that momentum has stalled over the last year. In May, 61.8 percent of North Carolinians were working or looking for a job, exactly where we stood in May of 2016. Given that we have never returned to pre-recession levels of labor force participation, this is a clear sign that recovery in North Carolina remains incomplete.

 

2018 Fiscal Year State Budget

If we care about our children, why do we lunch shame?

Have you ever watched an 11-year-old, short a dollar, pleading with the cafeteria worker to “please let me pay you back” in order to avoid the embarrassment of handing back over his hot meal?

I have. And it’s heartbreaking.

This school year, a Buncombe County elementary school made headlines when a student was threatened with being excluded from the school’s field day as punishment for unpaid lunch debt. While this particular incident gained national attention, “lunch shaming” – the practice of punishing or embarrassing students who do not have enough money for lunch – is prevalent in schools across the state and nation.

In far too many schools, it is common practice to shame children for failing to come up with the $2 or so that a hot meal at lunch costs. In many cases, their meals are thrown away and children are forced to eat an alternative (often a cold sandwich). In some of the more extreme cases, students are forced to work off their debts. Using shame by distinguishing them from their peers who are able to pay is not acceptable. And in many situations, children avoid the embarrassment altogether by skipping meals.

This year, the NC Senate’s budget proposed eliminating categorical eligibility in SNAP (formally known as food stamps), which threatened free and reduced lunches for up to 51,000 children. State legislators have not only failed to address the issue of childhood hunger, they have actively taken steps to make it worse.

Our leaders are also missing the larger picture, to the detriment of our communities and children. If we, as a state, value the health and well-being of our children, we should be focusing on how to ensure that no child, anywhere, is ever hungry.

Thankfully, there are policies that can help us to achieve this goal. One way is to make sure that food and nutrition services in schools are not based on receipts alone but are funded fully. House Bill 891 sought to make school breakfast and lunch available, free of cost, to any child who wanted it. Other states such as New Mexico have passed legislation to prevent lunch shaming and to prioritize feeding children.

At the federal level a policy that allows for universal provision of breakfast called community eligibility is available to North Carolina school districts.  More than 700 schools in North Carolina participated and even more are eligible for the program.

It’s time that we take the fight against childhood hunger seriously.

In North Carolina, 1 in 6 households with children are food insecure, making school lunches a critical source of nutrition for many students. Denying children of a nutritious meal, for whatever reason, is not in line with our state’s values.

NC Budget and Tax Center

Bad “Workforce Development Week” news: Trump administration order threatens quality apprenticeships for NC workers

The Trump administration is closing out national “Workforce Development Week” with an executive order that undermines quality apprenticeships across the country. Apprenticeships are a growing workforce development strategy that combine education and paid on-the-job training in specialized trades. The Obama administration committed to growing a skilled workforce by investing $265 million in apprenticeship programs with the goals of expanding apprenticeships into new industries and integrating programs into state education and workforce systems, among others. But the current administration’s new executive order (EO) threatens these efforts by loosening the federal definition of apprenticeship programs. The Center for American Progress released its analysis of the new EO. Here is an excerpt:

  • So-called industry-certified apprenticeship programs would undermine quality apprenticeshipsUndermines the definition of apprenticeship. The executive order defines an apprenticeship as an “arrangement that includes a paid-work component and an educational or instructional component, wherein an individual obtains workplace-relevant knowledge and skills,” a major departure from the existing federal definition, which is much more specific regarding the structure of on-the-job training, and the wage schedule.
  • Undermines quality assurance. According to the executive order, the secretary of labor could allow third parties broad discretion in how they ensure that these programs meet quality standards. It is unclear from the order whether those standards would be the existing federal standards, or new standards developed by the third party or by the DOL.
  • Undermines wage requirements. The executive order only addresses wages to the extent that it acknowledges that an apprenticeship arrangement is paid. It does not address scheduled wage increases, meaning that workers enrolled in these programs may not be guaranteed a raise as their skills progress. Additionally, the new definition of apprenticeship offered by the executive order, coupled with the lack of clarity on wages and wage progression, makes it totally unclear whether apprentices would be classified as employees and paid at least minimum wage.
  • Opens the door to federal funding without safeguards. As Registered Apprenticeships, these new programs—which would not necessarily have to adhere to existing federal standards—would also be eligible to access federal dollars through programs such as the Workforce Innovation and Opportunity Act (WIOA).

To read the full post, click here.

Victoria Crouse is a Public Policy Intern for the Budget & Tax Center, a project of the North Carolina Justice Center.