Last night, the House and Senate held a press conference, and they subsequently released their joint budget agreement, which will be voted on over the next week or so in both chambers.
The final budget holds to the rigid formula of population plus inflation, spending only $22.3 billion to operate core public services, as well as meet the needs of a growing state population undergoing significant demographic shifts and the persistent challenges in ensuring that every community has access to opportunity. This spending level is a mere 2.8 percent above spending for the current fiscal years and does not reflect the actual needs of North Carolina. Opportunity exists to invest in North Carolina to meet those challenges and pursue every opportunity for greater success and well-being; however, policymakers have instead chosen to reduce the state’s collective commitment bringing state spending to 4.14 percent relative to the size of the economy, well below the historic average of 6 percent.
Lawmakers are relying on a largely disproven theory that cutting public spending and reducing taxes for the wealthy and profitable corporations will deliver improved economic outcomes for all North Carolinians. Some point to the state’s apparent recovery, which mimics the overall national recovery, but lawmakers have failed to address the fact that wages aren’t recovering for everyday North Carolinians, there aren’t jobs for everyone who wants to work in the majority of North Carolina counties, and there is persistently high poverty in urban and rural communities alike.
Our leaders’ loyalty to severe budget constraint and lopsided tax cuts, which primarily benefit profitable corporations and the wealthy, are making it impossible for them to meet the needs of communities and families across the state. And as research and prior experience shows, this tax-cut, disinvestment approach will not deliver the economic gains they promise. It diminishes the ability of the state to pursue the investments that do deliver returns to the broader economy: preparing every child for kindergarten, increasing post-secondary attainment of the workforce, and targeting investments in main streets and small business development in struggling areas, for example.
While most of the public budget debate this week will be on the spending side (see our initial take here), examining how the North Carolina General Assembly plans to pay for their proposal is just as important. They pay for their 2017 budget proposal in the following way: Read more