NC Budget and Tax Center

Floor debate brings false claims, misses key facts

Tuesday night, the Senate debated and passed House Bill 3, a proposal containing multiple changes to the state Constitution including provisions that would set arbitrary and low income tax rates in the state Constitution and limit access to the state’s savings in times of emergency.

The debate itself was full of false claims, and it represented a failure to embrace the reality of how North Carolinians are doing and communities are faring under the tax-cut-for-millionaires regime of the current General Assembly leadership.

Here are some of the false claims made and key facts missed:

False Claim #1: Cutting the income tax and expanding the sales tax base has given North Carolinians a net tax cut.  Changes to the tax code have resulted in nearly $1.3 billion less in revenue coming in to the state, which has made it impossible for policymakers to provide teachers and state employees a pay raise or make sure college remains affordable for students with low-incomes, children have textbooks and pre-schoolers at risk are prepared for kindergarten.  Those losses in revenue have generated losses for families and communities, and the broader economy has missed opportunities.

At the same time, it has not given every North Carolinian a net tax cut.  In fact, those taxpayers with incomes below $34,000 have seen their taxes go up on average, and those with incomes averaging $1 million (the top 1 percent of taxpayers) have seen their taxes cut by $15,000 on average. Read more

2016 Fiscal Year State Budget

Budget takes one step forward, two steps back on job training

North Carolina’s workers have been waiting for weeks to see how state legislators would address their needs, and now that the wait is over, they’re getting very little besides bad news. Not only does the compromise budget eliminate workplace health and safety inspectors at the NC Department of Labor, it also represents a missed opportunity for reinvesting in the state’s job training and workforce development system after years of cutbacks. This startling lack of investment is due largely to recent rounds of tax cuts that will reduce state revenues by as much as $2 billion in future years.

First, the good news: the budget strengthens state support for apprenticeship programs that allow participating workers to receive occupational job training from local community colleges while working for a participating employer. These programs provide workers with classroom instruction and on-the-job training on the way to earning an associates’ degree or a recognized occupational credential—and they have proven to be effective at ensuring workers get the training they need and securing job placement when they finish.

Specifically, the budget allocates $500,000 in state funding to support the administration and curriculum development of these programs and $110,000 in tuition waivers for students participating in apprenticeship programs. In effect, the tuition waivers reduce or eliminate the cost of enrollment for participating students.

But while the budget takes a step forward with apprenticeships, it takes two steps back in other areas of workforce development. After years of shortchanging community colleges and an enormously complex administrative overhaul of the state’s workforce development system, the budget does almost nothing to put these economically essential programs back on a path to success.

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2017 Fiscal Year State Budget, NC Budget and Tax Center

ANER budget doubles down on marketing, spreads a few modest investments around

The Agriculture and Natural and Economic Resources (ANER) budget makes one thing clear: North Carolina has image problems. Scattered throughout this section of the budget are a variety of additional funds to support marketing, promotion, and public relations work. New funds are made available to market North Carolina’s agricultural products overseas, to boost the state’s image as a business destination, to promote tourism, and to recruit foreign companies to the Tar Heel State. All of these activities were already supported to some degree by state funds, so the new appropriations show that budget writers are concerned about North Carolina’s image across the U.S. and around the world.

Some important new investments are included, but the ANER budget leaves many of the fundamental economic and environmental challenges facing our state unaddressed. Some of the notable funding increases include additional support for rural downtown revitalization, water and wastewater infrastructure, and shellfish industry development. While there is merit to most of the areas where additional funding is allocated, the ANER budget lacks a cohesive vision for a prosperous future.

See below for a list of selected changes included in the ANER section of the budget: Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

Highlights of Justice and Public Safety Budget in joint budget agreement

The joint budget for Justice and Public Safety for the upcoming fiscal year entails a 3.5 percent increase to the original JPS budget passed by state lawmakers last year. Despite unmet needs in North Carolina such as re-entry services for ex-offenders returning into local communities, little progress is made beyond funding for pay raises and one-time bonuses.

Highlights from the joint budget for Justice and Public Safety:

Public Safety Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

Highlights of Higher Education budgets in the joint budget agreement

Under the joint budget, state support for higher education – the UNC System and Community College System – fails to ensure that adequate resources are available to provide quality education services to the more than 400,000 students enrolled in public colleges and universities across the state.

The joint budget includes a new fixed-tuition payment option that would guarantee that tuition does not increase during a specified time period for future students attending public four-year universities within the UNC System. The joint budget also limits the amount of revenue raised through student fees at public four-year universities each year. While these actions aim to address the cost of college, they fail to ensure that North Carolina’s four-year public universities have the resources required to ensure quality education services.

Steady erosion of state support for higher education in recent years has played a direct role in the increasing cost of college in North Carolina. Tuition at community colleges has increased by 81 percent since 2009. At public four-year universities, state funding per student remains more than 15 percent below its 2008 pre-recession level when adjusted for inflation – equating to hundreds of millions of dollars in funding cuts. This pressing reality is unaddressed in the joint budget negotiated by lawmakers.

Highlights from the joint budget for higher education: Read more