NC Budget and Tax Center

NC Budget and Tax Center, Poverty and Income Data 2013

Below are the five key findings from the Budget and Tax Center’s analysis of the new 2013 poverty and income data from the US Bureau of the Census.

  1. The state is making no progress towards eliminating poverty. North Carolina’s high poverty rate (17.9 percent) remained statistically unchanged in 2013. This means that there has been no progress towards alleviating poverty (as measured by the official poverty measure) since before the recession hit. One in five North Carolinians lived in poverty, equating to less than $24,000 in income per year for a family of four. North Carolina has the 11th highest poverty rate in the nation. High rates of hardship persist because of the state’s ongoing job shortage and the rapid acceleration of low-wage work that fails to provide a pathway to the middle class.
  2. Children are the state’s poorest age group—and children of color, especially those under age 5, face shamefully high rates of poverty. One in four Tar Heel children lived in poverty in 2013. Poverty maintains the fiercest grip on children of color, with rates approaching, and in some cases, exceeding 50 percent for certain communities of color under age 5. As North Carolina shifts to being a state where a majority of residents are people of color, persistently high poverty rates among children of color will harm the state’s economy in the long run.
  3. Where you live shapes your access to economic opportunities. A large and growing body of research shows that where one lives can determine if one has access to the educational and employment networks that can pave a pathway to the middle class. Of the 40 counties in North Carolina for which 2013 data is available, the average poverty rate in rural counties is 2.3 percentage points higher than the average for urban counties. With that said, the pockets of deepest hardship exist primarily in inner-city urban areas in the state. So even within a county that is thriving overall, economic hardship can—and often does—vary greatly from neighborhood to neighborhood.
2015 Fiscal Year State Budget, NC Budget and Tax Center

State revenues are coming in $62 million under projection for the first three months of the fiscal year, according to the Fiscal Research Division’s (FRD) new General Fund Revenue Report. This report provides an assessment of revenue collection performance for the state on a quarterly basis and is particularly important considering the state’s inadequate and unsustainable budget (a point that has been fleshed out in this Budget and Tax Center’s blog series). The growing cost of the 2013 tax plan further challenges state lawmakers ability to rebuild what was lost in the aftermath of the Great Recession.

Despite state revenues having not yet fully recovered from the downturn, lawmakers overhauled North Carolina’s tax code last year in a way that significantly reduced state revenue. In its first year of implementation, the tax plan is already costing far more than expected. Fiscal Research Division estimated that in FY2015, the plan would cost $512.8 million—but it is already costing $191 million more than that. By the end of the fiscal year, the revenue shortfall could reach as high as $600 million—for a total cost of the tax plan of more than $1.1 billion—according Institute on Taxation and Economic Policy estimates using up-to-date taxpayer data (see the chart below).

In other words, the $62 million revenue shortfall in the first quarter of the state’s fiscal year foreshadows what’s to come by the end of the fiscal year, assuming ITEP’s estimates turn out to be accurate. Read More

2015 Fiscal Year State Budget, NC Budget and Tax Center

North Carolina is among 14 states that have cut per-student state funding by more than 10 percent for the current school year compared to before the Great Recession, a new report by the Center on Budget and Policy Priorities (CBPP) highlights. This waning commitment to public education by state lawmakers in recent years has heightened the challenge of public schools having to do more with fewer resources.

K12_CBPP Ed Report 2014

Read More

2015 Fiscal Year State Budget, NC Budget and Tax Center

Numerous researchers have pointed to the benefits of a strong public university system. First and foremost, we often think of the individual benefits of providing an affordable education to the state’s citizens so that more can join the middle class. North Carolina took this role so seriously for its public university system that the idea of an education that is “free as far as practicable” is inscribed in the state constitution. But there are other broader benefits of a public university system that are equally important: universities serve as a hub for research & development that can spark private sector innovation and improve the quality of life for millions, they also support community economic development by serving as an anchor around which private and public investments can take hold and revitalization can be planned.

Some have said that the successive cuts to the UNC system have had no measurable impact on the quality of its education or its ability to serve these additional goals of supporting local economies. The reality, however, is that the state’s investment continues to remain far below pre-recession levels by 9.4 percent. Since the recession ended, lawmakers have ordered the Board of Governor to cut $1.1 billion through management flexibility, nearly equivalent to the operating state budget of the entire community college system. And North Carolina is one of just four states that made additional cuts to higher education this year, while other states began to reverse cuts made during and after the recession. The reductions to the UNC system have had an immediate harmful impact and will hamper the state’s future economic potential.

Here are three reasons why continued cuts to the UNC system will harm us all. Read More

2015 Fiscal Year State Budget, NC Budget and Tax Center

The 2015 state budget for creating jobs and growing the economy doubles down on the wrong turn taken by the legislature on economic issues over the last year. First it was the decision to continue to last year’s ill-advised tax cuts for the wealthy instead of investing in job training and education—the real building blocks of sustainable economic growth. Then it was the decision to privatize the business recruiting activities of the Department of Commerce—despite evidence from other states these initiatives produce more scandals than jobs—and eliminate regional planning initiatives that helped small communities coordinate their economic development efforts.

And now the state budget completes this trifecta of poor choices for economic development by spending more of our state’s limited resources on programs that are both ineffective at creating jobs and are overwhelmingly targeted to the wealthiest urban areas of the state instead of the more distressed areas in rural North Carolina.

Read More