Commentary, NC Budget and Tax Center

Get the real facts on North Carolina’s economy

Some would like to suggest that Governor McCrory’s election-year campaign slogan, “The Carolina Comeback,”  is a fact-based explanation of the current conditions on the ground in North Carolina.

With the national economy growing, it makes sense that North Carolina leaders would try to take some of the credit for themselves, but there isn’t any credible evidence that policy decisions made in Raleigh have buoyed North Carolina’s economic prospects.

North Carolina’s economy is certainly better than during the Great Recession, but that shouldn’t be mistaken for success. The Carolina Comeback narrative might be excused as simple political rhetoric, if it didn’t distract from the real barriers that still undermine far too many North Carolinians’ livelihoods today, and upend their quest for a better future.

Here are just 10 facts that shouldn’t be ignored:

  1. North Carolina has 411,100 fewer jobs than pre-Recession employment levels.
  2. Since the Recession began, North Carolina’s job growth has been 4.1 percent, compared to the nation’s 4.6 percent change.
  3. There has been a growth in the number of North Carolinians working part-time jobs who would prefer to work fulltime but take what they can find.
  4. North Carolina’s median household income is $3,200 less than it was in 2007 and has grown at one of the slowest rates in the country in recent years.
  5. Tax changes since 2013 mean that North Carolina will bring in at least $1.4 billion less than would have been available under the old tax code. $1.4 billion would have allowed the state to do all of the following combined:
    1. Eliminate the NC Pre-K Waiting List;
    2. Restore funding for public education to pre-recession levels on a per-student basis;
    3. Fund an additional 960 nursing positions to achieve the ratio of one nurse to every 750 students, as recommended by the National Association of School Nurses;
    4. Restore literacy coaches in middle schools;
    5. Support the implementation of nutrition standards in the Child Nutrition Program, per the suggestion of the NC Department of Public Instruction;
    6. and Invest $500 million in affordable housing programs, job training programs for adults facing barriers to work, and other ECE initiatives.
  6. North Carolina’s State Economist notes that while revenue has come in over projections, sales tax collections are below what was anticipated and the economy appears unlikely to accelerate.
  7. The tax changes since 2013 have delivered a nearly $15,000 tax cut annually for millionaires in NC, while average taxpayers with incomes averaging $11,000 are paying even more.
  8. Job growth has not occurred in middle-wage industries.
  9. Poverty remains 15 percent above 2007 levels.
  10. There are 120,000 North Carolinians earning at or below the minimum wage, two and a half times more than several years ago.
NC Budget and Tax Center

PATRIOTIC MILLIONAIRES make strong case for raising the minimum wage

A group of successful well-off business leaders makes it clear that raising the minimum wage is a good thing for businesses, North Carolina and the national economy. A statement released by Patriotic Millionaires, a group of high-net-worth Americans who are committed to building a more prosperous, stable and inclusive nation, states that the core intent of recent legislation passed by North Carolina state lawmakers – known as the “bathroom bill”—was designed to prevent cities and towns across North Carolina from putting more money in the hands of potential customers. This was achieved by state lawmakers prohibiting the ability of local governments to increase their respective minimum wages.

Here are some facts regarding public support for raising the minimum wage.

  • 80 percent of business leaders nationally support a higher minimum wage, finds a survey conducted by the US Chamber of Commerce. The public is likely unaware of this fact because the US Chamber is against raising the minimum wage, so suppressing this important fact serves the national Chamber’s interest.
  • The majority of Americans support raising the minimum wage, with nearly half supporting raising it to $15 an hour.
  • 62 percent of North Carolinians support a minimum wage of $15 an hour. Despite this majority support, state lawmakers refuse to take action on this issue.
  • Consumer demand represents 70 percent of the nation’s economy. Accordingly, increasing the amount of dollars in workers’ paychecks by raising the minimum wage contributes to a stronger, more robust national and state economy.

Read more

NC Budget and Tax Center

Latest revenue forecast shows state’s economy only in line with national recovery

Even though North Carolina has collected more money than initially projected this quarter due to a moderate but steady ongoing economic recovery, it’s still far too little to pay for the investments our state needs to thrive. Tax cuts for the wealthy and powerful have reduced the money that would have otherwise been available to North Carolina to invest in our communities.

For the first quarter of the current fiscal year (July through September), General Fund revenue was $158 million, or about 3 percent, above the cautious target set by state officials. This does not suggest that all is well here in North Carolina, which becomes evident when assessing the health of state investments in local communities across the state. There is still far too little commitment to building thriving communities through investments in the classroom, community economic development, infrastructure, public health and environmental protection.

Beyond the $158 million figure, the latest quarterly revenue report released by the NCGA Fiscal Research Division highlights additional noteworthy points regarding the state’s economic and revenue landscape.

  • The early months of the fiscal year are typically the least important months as an indicator of revenue outcomes for the full fiscal year. Revenue performance during the second half of the fiscal year provides a better sense of overall revenue performance.
  • The national economy hasn’t been able to accelerate into overdrive and continues to move at a steady, moderate pace. North Carolina has yet to experience a robust expansion as a result. The revenue report also highlights that the improving economy has been insufficient to produce robust employment and consumer markets.
  • State officials see no sign of acceleration on the horizon.

The report also notes that state officials were necessarily cautious with their forecast and expect moderate, steady economic performance for the remainder of the fiscal year. In the wake of tax cuts passed by state lawmakers in recent years that largely benefit the well-off and that will reduce annual revenue by more than $2 billion once fully in place, the report supports two particular realities.

  • The costly tax cuts have not spurred economic growth and the creation of new jobs. The revenue outlook report notes that North Carolina economy mimics that nation’s steady, moderate recovery. The tax cuts have reduced resources available to invest in public schools, health services for seniors and the poor, and ensure that communities across the state can thrive.
  • For the most recent fiscal year, sales tax revenue collections were $190.4 million below expected collections. Since 2013, tax changes have resulted in a steady increase in reliance on sales tax and away from income taxes. Expanding the sales tax base with newly taxed services makes projecting revenue collection difficult. Furthermore, a greater reliance on the sales tax disproportionately impacts low-income taxpayers who spend a larger share of their income on state and local taxes compared to the state’s highest income earners who have benefited the most from income tax cuts in recent years. This tax shift also could create a tax code that does not adequately fund the investments that help build thriving communities.
NC Budget and Tax Center

Deadlines approach on some federal assistance programs for those affected by Hurricane Matthew

While we continue to learn about the many ways that Hurricane Matthew has delivered destruction and hardship to our communities, we know that there will be the need for many months and even years of rebuilding.  The North Carolina Justice Center stands at the ready to promote the best policies to support an equitable and inclusive recovery that builds thriving and resilient communities.

Right now, there are deadlines approaching to apply for critical federal assistance that we want to make sure Pulse readers have and share with their families, friends and neighbors in Eastern North Carolina.

  1. Food assistance is available to residents who have NOT been receiving food assistance but who need help accessing food in the following counties: Beaufort, Bladen, Columbus, Cumberland, Dare, Duplin, Greene, Harnett, Hoke, Hyde, Johnston, Jones, Lenoir, Pender, Robeson, Sampson, Tyrrell, and Wayne. More information can be found here.  The deadline is Wednesday, October 26th.
  2. Disaster unemployment insurance is available for residents in the following counties: Beaufort County, Bertie County, Bladen County, Columbus County, Cumberland County, Dare County, Edgecombe County, Greene County, Harnett County, Hoke County, Hyde County, Johnston County, Jones County, Lenoir County, Nash County, Pitt County, Robeson County, Sampson County, Wayne County, and Wilson County. Individuals affected by the disaster and are unable to continue working can apply for disaster unemployment insurance.  Be sure to apply by November 14, 2016.  You can call 1-866-795-8877  and visit: to apply online.
  3. General disaster assistance for housing, home repairs and other damage is available. Individuals—homeowners and renters— and business owners who sustained losses in the designated area can begin applying for assistance tomorrow by registering online at or by calling 1-800-621-FEMA (3362).  It is recommended that you should apply even if you have insurance. Disaster assistance applicants, who have a speech disability or hearing loss and use TTY, should call 1-800-462-7585 directly; for those who use 711 or Video Relay Service (VRS), call 1-800-621-3362. The toll-free telephone numbers will operate from 7 a.m. to 10 p.m. (local time) seven days a week until further notice.

For more information regarding local services and resources, you can also dial 211 or visit


NC Budget and Tax Center

For many low-income North Carolinians, Matthew’s damage is deeper than broken buildings

As the state begins recovery efforts following Hurricane Matthew, we begin to see unexpected damages. These damages are beyond the ruin of physical structures. These damages are not the effects of harsh winds and high waters. Instead, they are the years old damages – the damages of persistent poverty, underinvestment, and systemic neglect.

But what does poverty have to do with recovery from Matthew? While the hurricane itself did not distinguish between the rich and the poor, the ability of communities and families to recover will depend largely upon just that.

A recent N.C. Budget and Tax Center report (“North Carolina’s Greatest Challenge—Elevated Poverty Hampers Economic Opportunity for All”) finds that 1.6 million North Carolinians live in poverty – that’s a poverty rate 15 percent higher than before the Great Recession. North Carolina has the 12th highest poverty rate, child poverty rate, and deep poverty rate in the nation, and people of color, women and children are more likely to be in poverty than their white, male counterparts. Additionally, the report found that in North Carolina in 2014, the 20 counties with the highest rates of poverty were all rural. North Carolina had a serious issue with poverty even before Matthew hit.

In “Poor, Displaced and Anxious in North Carolina as Floods Climb After Hurricane,” New York Times reporter Jess Bidgood highlights the disproportionate impact the hurricane had on our poorest communities. The story notes that families with vehicles, or who could afford moving trucks, were able to evacuate their families and valuables. Additionally, workers with paid time off or savings are able to absorb the financial burden that comes with evacuation and recovery. Families in poverty and without savings or paid leave policies were more likely to lose valuables and essentials and have fewer means to replace them. Families living paycheck to paycheck can barely afford a day off, let alone weeks out of work. Even FEMA admits it will only be able to provide very modest short term support for even the neediest families.

This is from the story:

“But even when state and federal officials work to disburse flood aid, experts said, it is often harder for families living on the margins to bounce back. The Food Bank of Central and Eastern North Carolina estimated that 356,000 people in the 21 counties it was monitoring for storm and flood effects did not have access to enough healthy food, even before the floods.”

In “Flooding from hurricane hits lower-income North Carolina residents hard,” Washington Post reporters Chico Harlan and Angela Fritz drew attention to some of the pre-existing inequalities that will impact recovery. Read more