NC Budget and Tax Center

2015 Fiscal Year State Budget, Falling Behind in NC, NC Budget and Tax Center

This week the Budget & Tax Center released a new report on North Carolina’s 2015 fiscal year budget. While other states across the country are beginning to reverse the worst cuts made during the Great Recession, North Carolina continues to underfund crucial public investments in order to pay for tax cuts that took effect this year. Lawmakers failed to provide a high-quality education for all children, protect natural resources, support community-based economic development, or provide adequate health and human services to North Carolina residents.

Under the final budget, state investments are 6.6 percent below pre-recession levels five years into the official economic recovery. The new budget for the 2015 fiscal year is the 7th budget enacted since the Great Recession hit, and North Carolina has yet to bounce back to its pre-recession investment level. This is in contrast to spending during previous economic recoveries – spending did not dip after the 1981 and 2001 recoveries and state lawmakers restored investments to the levels that were in place when the 1990 recession hit within three years. Read More

NC Budget and Tax Center, Poverty and Income Data 2013

Social SecurityAccording to data released last week by the U.S. Census Bureau, in 2013 the percentage of older adults (65+) whose incomes fall below the federal poverty threshold is lower than it is for children and non-elderly adults. 1 in 10 (10% exactly) older adults in North Carolina lived in poverty in 2013, compared to 17.9% of the state’s population overall and 25.2% of children. The percentage of North Carolina’s older adults living in poverty in 2013 is one percentage point higher than it was in 2007 when the recession hit.

The reason for the comparatively low rate of poverty amongst older adults is plain and simple – Social Security. Established in 1935, this relatively simple and universal public program continues to accomplish its primary purpose of providing basic economic security for older Americans. Read More

NC Budget and Tax Center, Poverty and Income Data 2013

The connection between economic recoveries and declining economic hardship is often assumed and yet it is no longer necessarily the case in reality. While poverty rates have traditionally moved in tandem with economic variables that often signal an economic recovery—job creation, declines in unemployment rates and adequate investments in anti-poverty strategies—the recoveries from the most recent downturns have not reduced poverty quickly and significantly.

Data from the country as a whole analyzed by the Center on Budget and Policy Priorities provides even greater historical context for the national picture showing that poverty rates fell within one to two years from the start of official national economic recoveries in the 1960s and 1970s. In more recent recoveries, it has taken four to five years for the poverty rate to fall. The data released last week showed the first statistically significant decline in the poverty rate for the country four years into the current recovery.

At Prosperity Watch this week, we documented the trends in North Carolina regarding recoveries and poverty rates. In the 2000s, the poverty rate failed to fall despite the official recovery that began in 2001 before the onset of the Great Recession. The recovery that began in 2009 has yet to significantly bring down the state’s poverty rate which last week we learned remained at 17.9 percent.

The disconnect between economic expansions and declining poverty is further evidence of a broken economic model in which the benefits of growth are not broadly shared. It is a clarion call for public policies to bind together once again improved economic performance and greater economic security.

This is the fifth post in a series that takes a detailed look at the 2013 US Census Bureau poverty data released on September 18th. The first post looked at how North Carolina is faring overall. The second post looked at how poverty varies by race, and the third post compared poverty by counties in North Carolina. The fourth post looked at child poverty. Read the entire series here.

2015 Fiscal Year State Budget, NC Budget and Tax Center

The final budget for fiscal year 2015 – which runs from July 2014 through June 2015 – includes a pay raise for public school teachers for the first time in several years. What the pay raise translates into regarding additional dollars in teachers’ paychecks is unclear based on differing comments by the governor and state lawmakers. Whereas Governor McCrory proclaims an average pay increase of 5.5 percent for teachers, state lawmakers tout a 7 percent average pay raise.

Beyond the on average presentation of the teacher pay raise by state policymakers, the amount of additional money teachers will see in their paychecks varies greatly – particularly among early-career teachers compared to more experienced teachers.

Not all teachers are provided a long-awaited, meaningful pay increase under the new teacher pay structure. The new six-step pay structure for teachers included in the final budget replaces the existing 36-step pay scale – these steps are based on years of teaching experience and determine when a teacher gets a pay increase. Reducing 36 steps down to six entailed much maneuvering by state lawmakers, resulting in some teachers getting a boost in pay at the expense of other teachers.

Under the new pay scale, the starting pay for early-career teachers jumps to at least $33,000 from $30,800 under the old pay schedule—a 7.1 percent increase. However, salary increases for more experienced educators are much lower. In fact, some teacher would actually earn less under the new pay scale compared to the old pay scale; these teachers will continue to earn salaries based on the old pay scale for the 2013-14 school year along with a flat annual $1,000 bonus. Read More

Missing Workers, NC Budget and Tax Center, Uncategorized

The official unemployment rate ticked up in August to 6.8 percent but if you count those missing workers who would be in the labor market if job opportunities were stronger that rate would be 12. 6 percent.

Our update to the number of missing workers in North Carolina reflects the ongoing challenge for workers when there are too few jobs for those who want to work. It also demonstrates the failure of the unemployment rate alone to tell the story of what is happening in the state’s labor market.

The number of missing workers at Missing Workers August 2014the state level is calculated based on expected labor force participation rates while accounting for demographic trends like an aging population. As an indicator, the number of missing workers and an unemployment rate that accounts for them provides information about how far the current labor market is from meeting all the needs of workers in the economy.

North Carolina’s recovery will continue to struggle to deliver benefits broadly as long as so many workers remain missing from the labor force because there are too few jobs.