NC Budget and Tax Center

NC Budget and Tax Center

As we honor the service and sacrifices made by veterans today to protect our freedom and the American Dream, we should not forget that for too many veterans the American Dream remains out of reach. Some veterans and their families face the same economic struggles of the many families working to make ends meet and provide a better opportunity for their children in today’s economy, an economy characterized by high unemployment and low-wage work. For veterans, like their non-veteran neighbors, public policies have proven effective at improving their opportunity to meet basic needs and get ahead. And when policy choices have sought to limit access to health care or supports for workers earning low-wages, for example, veterans have also been hurt.

Veterans overall have a lower unemployment level than the national average, nearly one percentage point lower. But as of October 2014 Gulf War II-era veterans—those who served in Iraq and Afghanistan—had a 7.2 percent unemployment rate, representing a full 188,000 veterans who are out of work. Young veterans have also been disproportionately impacted by the lack of jobs. In 2013, 24.3 percent of male veterans between 18 and 24 years old and 14.3 percent of female veterans between 18 and 24 years old were unemployed. Given the large presence of military bases in North Carolina and active duty personnel it is not surprising that North Carolina’s veteran unemployment rate is slightly lower than these national numbers with an unemployment rate for Gulf War II-era veterans at 6.5 percent as of 2013.

For those veterans in North Carolina who are working, median income is $35,080 higher than that the income of nonveterans ($23,193) but still nearly $15,000 short of what it takes for a family of four to make ends meet according to the Living Income Standard. One in thirteen veterans in North Carolina live in poverty compared to one in five North Carolinians overall.

Absent public policies targeted at increasing access to opportunity for veterans it is likely that economic hardship would be far greater for these Americans. Read More

NC Budget and Tax Center

North Carolina officials will soon have spent all available financial incentives the state offers to businesses that are considering locating or expanding in the state. Each year the state awards millions of dollars in subsidies to businesses through its Jobs Development Investment Grant (JDIG) program.

The state is now one project announcement away from spending all of the $22.5 million in funding allocated to JDIG for the current year, accordingly to state Commerce Secretary Sharon Decker. Governor McCrory is being urged by proponents to call a special legislative session before January 2015 to increase funding for the JDIG program. Yet, this is coming at a time when state revenue collections are $62 million below projections for the first quarter of the current fiscal year as the cost of the tax plan passed last year continues to increase. The reality is that absent additional revenue, increasing funding for the JDIG program means cuts in other areas of the state budget to pay for the additional spending.

Secretary Decker states that “Tax reform has helped us because we are no longer the highest in the Southeast, and that is great” and goes on to assert “But, we will not be competitive for those jobs without JDIG.” Yet, it is tax reform that was supposed to spur job creation and boost the economy, but is nevertheless hindering our ability to invest in JDIG and core public services that are stronger determinants of sustainable job creation and economic growth. State revenue collections are $62 million below projections for the first quarter of the current fiscal year and as we have written elsewhere, the cost of the tax plan for the current fiscal year could be more than $1 billion. The tax plan passed last year, sold as a job-creation package, reduced the state’s personal and corporate income tax rates to largely benefit the wealthy and profitable corporations. Still, more corporate subsidies are being asked for in the name of job creation.

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NC Budget and Tax Center

This week’s Prosperity Watch uses newly available data from the Economic Policy Institute to shed light on the experience of unemployment for different groups in North Carolina.  While the state performs better than the nation by having a lower barrier to employment for African-American and Latino workers in particular, the unemployment rate for these groups still remains far above where it was before the Great Recession started and is still greater than that for white workers. You can check out the full Prosperity Watch here.

The Economic Policy Institute data is presented in this interactive map that shows North Carolina’s better than average performance in the race to recovery for all groups but the continued need to focus public policies that would reduce barriers for workers of color in our state.

 

NC Budget and Tax Center

Voters in Mecklenburg, Guilford, and Rockingham counties each rejected a ballot initiative to increase its local sales tax by one-quarter cent. Under these referendums, consumers would have paid 25 cents in additional sales tax per $100 spent on goods and services subject to sales tax. The sales tax increase was expected to generate around $32 million for Mecklenburg County, $14 million for Guilford County, and $1.5 million for Rockingham County in additional local revenue each year.

This rejection of a sales tax increase highlights the tenuous reality of funding for public education in North Carolina. Last year, state lawmakers passed a tax plan that significantly reduced revenue available for public schools and other important public services. The tax plan has proven to be more costly than state policymakers’ initial estimate and the implications of this self-imposed revenue crisis will reverberate across the state in the years ahead. Meanwhile, some local governments are bracing for the revenue losses associated with the elimination of the local privilege license tax, which goes into effect next July.

Of the three counties rejecting a proposed sales tax increase, Mecklenburg County has experienced significant growth in its student population in recent years. Charlotte-Mecklenburg Schools (CMS) is the second largest, and one of the fastest growing school systems in the state. For the most recent 2013-14 school year, more than 144,000 students were enrolled in CMS, with nearly 10,000 additional students entering CMS classrooms since 2008. Guilford County has experienced modest growth in its student population (1,326 additional students) while the student population for Rockingham County has declined (990 fewer students) since 2008. Read More

Missing Workers, NC Budget and Tax Center

The official unemployment rate ticked down in September slightly to 6.7 percent but if you count the number of workers missing from the labor force–those who would be looking for work if employment opportunities were stronger–that rate would be 12.8 percent.

As Patrick Conway, an economist at UNC Chapel Hill, shared in the News & Observer this week, the untold story of the state’s labor market is the story of these missing workers and the inefficiency in the economy that must be addressed when the state does not ensure those who want to work have job opportunities.

Our September update to the number of missing workers in North Carolina demonstrates the failure of the unemployment rate alone to signal this very real problem in the labor market and the need for sound public policy responsesMissing Workers September 2014.