NC Budget and Tax Center

Approach to disaster relief funding is in need of drastic change

Last week, Congress passed a bill that included over $15 billion in disaster relief funding dedicated to the Federal Emergency Management Agency (FEMA). The bill, which included another provision that extends the debt-ceiling for three months, is in response to a cry from FEMA officials earlier this week who warned that the agency could run out of funds as soon as this weekend. The legislation, which awaits the president’s signature, includes $7.4 billion dedicated to Hurricane Harvey recovery efforts in Texas and Louisiana, another $7.4 billion for community block grants, and $450 million towards Small Business Administration (SBA) loans for damaged businesses.

Although 90 House and 17 Senate Republicans voted against the bill, largely on the grounds of extending the debt ceiling, lawmakers on both sides of the aisle agreed that funding disaster recovery efforts in light of Harvey and ahead of Hurricane Irma is a priority.

This action signals a welcome departure from previous stances Congress has taken toward funding disaster recovery. A recent Slate article details the typical contradiction in lawmakers’ attitudes towards federal disaster relief. In 2005, after Hurricane Katrina hit, then-Rep. Mike Pence expressed his hesitancy in providing disaster relief without spending cuts. In 2012, following Superstorm Sandy, lawmakers in both chambers threatened to withhold relief funding by tying the recovery bill to $17 billion worth of spending cuts.

The way our state and nation are bearing the financial and human costs of natural disasters is drastically changing. In just over the past 30 years, we have seen a significant increase in billion-dollar disasters. In North Carolina, in particular, these events will have disproportionate and catastrophic impacts of many of our poorest and rural communities. And yet without a commitment to investments over the long-term to prepare and plan for these costs, we will be leaving communities aside

After almost a year, Eastern NC is still not whole

Lawmakers have been inconsistent in funding unmet needs for those impacted by natural disasters and have neglected to have serious conversations about ensuring that infrastructure exists to minimize future devastation. This could not be more evident than here in North Carolina where the state was awarded only 1 percent of a $929 million aid request to support recovery and rebuilding efforts for Hurricane Matthew.

It is hopeful that in this emerging bipartisan commitment to helping communities recover, Eastern NC will finally receive some badly needed support. According to the NC Insider, nearly a year after Hurricane Matthew flooded much of the eastern part of the state, almost 3,000 families are still waiting to be bought out of their damaged and flood-prone homes. The state, however, only has enough funding to buy out one-third of the properties. Additionally, only a small number of businesses have received SBA loans and the state lacks funding needed to support low-income homeowners in need of repairs.  The estimated unmet need in the region according to state officials is $450 to $600 million.

We should applaud lawmakers for stepping up and choosing to support communities in the wake of Hurricane Harvey and Irma. But if we hope to build a stronger and more resilient North Carolina, we’ll need more than just disaster relief; we’ll need the investments and choices that ensure everyone, regardless of where they live or how much money they make, live in safe and thriving communities.

Brian Kennedy II is a Public Policy Fellow with the Budget & Tax Center, a project of the North Carolina Justice Center.

Environment, NC Budget and Tax Center

Here’s how much climate change will cost each county in North Carolina

Climate change is not just an environmental issue, but an economic issue as well that impacts all 100 counties across North Carolina. As the country experiences an increasing number of billion-dollar disasters, the challenge for us all is to minimize the harm to families and communities and plan for the future. Since 1980, we have seen the number of billion-dollar weather and climate disasters in the U.S. increase by 400 percent. Profound weather shifts from rising sea levels and flooding to drought and forest fires require effective preparation, planning and response from our leaders.

The financial impact is increasingly relevant to county and state governments as federal officials, despite increasing disasters, consider scaling back federal assistance, and push states to take on greater responsibility for disaster preparation and recovery with their own resources. Here in North Carolina after Hurricane Matthew displaced thousands of families and caused $4.8 billion in damages across 50 counties we all saw that the federal withdrawal approach did not work and instead hurt our state. North Carolina policymakers have made just a $300 million commitment to Eastern NC to date despite documented unmet need of nearly $900 million.

A recent study published by Science that represents a major breakthrough for the field of climate economics finds climate change will aggravate economic inequality in the U.S. as there are “enormous disparities in how rising temperatures will affect American communities.” After simulating the costs of global warming in excruciating detail, modeling every day of weather in every U.S. county during the 21st century, the study finds the “South and lower Midwest will bear the brunt of the economic costs associated with climate change through the end of the century.” Coastal communities are projected to take a toll from rising seas and strengthening hurricanes while the South will be hurt by a decline in farming caused by rising temperatures, along with increasing energy demands to keep up with the heat.

For North Carolina this means many poor and rural parts of the state will be affected the most. Below is a sortable table that shows how much of its income each county in North Carolina stands to lose through the end of the century; linking climate projections with economic effects like mortality, labor productivity, energy demand and crop yields. Based on the analysis it is clear that in order to protect North Carolina’s economy and quality of life for people today and future generations, the state and all 100 counties must be cognizant of climate change and plan for its economic effects – especially in communities most in need.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

Climate Change Cost in Each County of North Carolina

CountyTotal Estimated Damages: % of GDP
(percentage of economy lost)
Agricultural Damage
(changes in average yields for
corn, wheat, soybeans and cotton)
Alamance6.7-32.8
Alexander4.7-31.4
Alleghany-2.60
Anson9.1-19.9
Ashe-1.20
Avery-1.50
Beaufort6-5.5
Bertie89.4
Bladen8.9-22.4
Brunswick6.3-22.1
Buncombe3.60
Burke5.9-35.4
Cabarrus5.8-33.7
Caldwell6.6-35
Camden3.7-12.8
Carteret5.7-22.4
Caswell8.2-20.4
Catawba5.4-21
Chatham4.6-27.6
Cherokee8.3-47.3
Chowan7.521.4
Clay1.9-13.7
Cleveland6.8-5.4
Columbus8.4-18.4
Craven5.7-1.7
Cumberland5.4-15.9
Currituck4.2-11.2
Dare3.90
Davidson6.2-31.1
Davie3.7-25.1
Duplin7.9-17.2
Durham4.6-15
Edgecombe8.91.8
Forsyth5-30.1
Franklin5-21.3
Gaston5.56.7
Gates7.1-2
Graham5.10
Granville5.2-16.3
Greene8.8-9.1
Guilford4.7-25.7
Halifax718.1
Harnett6.8-11.6
Haywood-0.734.2
Henderson2.8-38.6
Hertford9-3.7
Hoke7.6-7.5
Hyde7.8-6.2
Iredell3.2-21.3
Jackson-0.70
Johnston4.9-9.3
Jones7.310.4
Lee6.8-11.6
Lenoir8-5.7
Lincoln5.3-22.6
Macon2.40
Madison2.60
Martin822.6
McDowell-0.517.9
Mecklenburg3.3-18.7
Mitchell-0.20
Montgomery7.6-4.4
Moore6.1-18
Nash6.6-5.8
New Hanover5.9-39.8
Northampton7.816.2
Onslow3.6-11.8
Orange3-29.4
Pamlico6.9-10.5
Pasquotank6.2-14.3
Pender7.9-18.3
Perquimans6.72.9
Person5-15.5
Pitt5.8-7.5
Polk6.9-1.5
Randolph6.5-26
Richmond9.20.6
Robeson11-24.7
Rockingham6.5-15.2
Rowan7.7-27.9
Rutherford8.43.7
Sampson7.7-8.8
Scotland10-7.1
Stanly7.7-10.4
Stokes4.7-19.6
Surry3.5-22.7
Swain2.70
Transylvania8.4-66.9
Tyrrell7.9-17.3
Union4.5-26
Vance8-27.8
Wake3.1-24.5
Warren8.3-14
Washington8.2-12.5
Watauga-0.60
Wayne6.9-15.9
Wilkes4.9-50.1
Wilson7-9.3
Yadkin4.7-24.4
Yancey-8.10
NC Budget and Tax Center

Labor Day fact: SNAP helps 1 in 9 NC workers put food on the table

For many working North Carolinians, their wages alone are not enough to make ends meet. The Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) is a critical tool many working families rely on in order to put food on the table. According to new analysis from the Center on Budget and Policy Priority, SNAP helps 1 in 9 workers in North Carolina and 495,900 people in working households. SNAP and similar programs are becoming increasingly important as our state economy continues to loose middle-wage jobs. Between 2007 and 2016, North Carolina saw a loss of nearly 81,000 middle-wage occupations and an increase of over 90,000 low-paying jobs.

SNAP helps many workers who earn low wages, who have unpredictable schedules and paychecks, and who are in between jobs.

The report finds that:

  • Many workers and their families participate in SNAP while they are working or are looking for work. SNAP’s program and benefit structure supports work. While many participants work while participating in SNAP, many also apply for benefits to support them while they are between jobs.  Thus, many workers participate in SNAP for part of the year and stop participating when they are earning more.  Three-quarters of the working poor who were eligible for SNAP at some time during the year were eligible for only part of the year, an Agriculture Department study found.
  • Millions of Americans work in jobs with low pay. For example, a recent analysis found that up to 30 percent of Americans work in jobs with pay that would barely lift a family above the poverty line, even if they were working full-time, year-round.
  • Occupations that pay low wages are numerous and many are growing. Six of the 20 largest occupations in the country which together employed about 1 in 8 American workers, had median wages close to or below the poverty threshold for a family of three in 2016:  retail salespersons, cashiers, food preparation and serving workers, waiters and waitresses, stock clerks, and personal care aides). And eight of the ten jobs that are expected to add the most new jobs over the next decade have median wages below the national median, and many much lower.

To learn more about how SNAP supports workers, read the full report here.

NC Budget and Tax Center, Trump Administration

In N.C., 42% of Trump’s proposed tax cuts would go to the few making more than $1 million

On July 27, the White House released a statement on Tax Reform that stated tax-writing committees in Congress would work this fall to “develop and draft legislation that would result in the first comprehensive tax reform in a generation.” The White House statement was blunt in stating “the American people have elected a President and Congress that are fully committed to ensuring that ordinary Americans keep more of their hard-earned money.”

However, a newly released report confirms that the White House is not really interested in tax reform that helps “ordinary Americans”. Instead, under President Trump’s proposed tax cut plan, “ordinary Americans” will hardly benefit at all, as nearly half of Trump’s proposed tax cuts would go to people making more than $1 million annually, according to the report by the Institute for Taxation and Economic Policy (ITEP).

As it pertains to North Carolina, the new report is clear in pointing out:

“A tiny fraction of the North Carolina population (0.5 percent) earns more than $1 million annually. But this elite group would receive 42.4 percent of the tax cuts that go to North Carolina residents under the tax proposals from the Trump administration. A much larger group, 50.8 percent of the state, earns less than $45,000, but would receive just 5.9 percent of the tax cuts.

The first group, the millionaires, would receive an average tax cut of $150,550 in 2018, equal to 6.4 percent of their income. The second group, those making less than $45,000, would receive an average tax cut of just $190, equal to 0.8 percent of their income.”

That report concludes with the confounding fact that the Trump tax principles would also reduce revenue in the U.S. by at least $4.8 trillion over 10 years. If this drastic approach took effect at the federal level it would put NC and our local governments at risk, as our state would not be able to sustain vital programs that help people thrive due to the costly tax cuts at both the federal and state level. In a recent brief the NC Budget & Tax Center stated: “The costly tax cuts in the new [NC] budget represent missed opportunities by lawmakers to ensure that the needs of a growing state are adequately met and to boost public investments that promote opportunity and broadly shared prosperity.”

If you are wondering how all of this is possible, here are the known Trump tax cut proposals that would primarily help the super-rich and would reduce U.S. revenues by $4.8 trillion over 10 years:

– Repeal of the 3.8 percent tax on investment income for the rich.
– Repeal of the Alternative Minimum Tax.
– Repeal of personal exemptions and doubling of the standard deduction.
– Replacement of current income tax brackets with three brackets: 10 percent, 25 percent, and 35 percent.
– Elimination of all itemized deductions except those for charitable giving and home mortgage interest.
– Special tax rate (15 percent) for businesses that do not pay the corporate income tax.
– New deduction and tax credit for child care.
– Repeal of special tax breaks for businesses and reduction in the corporate income tax rate from 35 percent to 15 percent.
– Repeal of the estate tax.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center

Busting the myths about affirmative action

As the federal government moves to investigate the perceived harm that affirmative action has inflicted on white college hopefuls, it’s important to separate truth from fiction. This investigation is powered largely by myths. The truth is, people of color continue to face barriers to higher education and economic stability. And affirmative action hasn’t gone far enough in removing those barriers.

Myth: Affirmative action exclusively benefits people of color

Reality: Decades of data show that white women are the primary beneficiaries of affirmative action policies. So white women get the economic stability that comes with removing unjust barriers to success, but people of color continue to miss out.

Myth: People of color now make up the majority of college students

Reality: Harvard University recently made headlines because its incoming freshman class is less than 50 percent white for the first time in its history. However, most college and universities aren’t following that trend. And while the white-Latinx college enrollment gap has narrowed over the last decade, the white-Black enrollment gap has not. Higher education remains predominantly available to white people.

Myth: Affirmative action gives people of color a free ride to college

Reality: Nationwide, just under 40 percent of Black 25- to 55-year-olds carry student loan debt. The number drops to around 30 percent for Latinx and white people. But the incidence of student loan debt isn’t the sole issue. There’s also a wide racial gap in average debt amounts. Black students and their families incur twice as much student loan debt upon graduation. According to a 2016 Brookings Institute report, four years after graduation the Black-white debt gap more than triples from $7,400 to $24,720.

Instead of intergenerational wealth, communities of color are more likely to suffer intergenerational debt. And as North Carolina tuition costs continue to rise, this problem will worsen and the barriers to racial equity will grow.

Nearly two-thirds of North Carolina college graduates collect student loan debt along with their degrees. Meanwhile, state funding for public universities has declined since 2008, which puts the burden of funding on tuition-paying students and their families. And the debt amounts bear that burden out. Over the past 10 years, the average student loan debt has increased from roughly $16,000 to $25,000. Meanwhile the median income in our state has barely budged.

So while the federal government continues to question minority students’ presence in colleges, those same students are increasingly getting priced out of a college education and the ladder to the middle class that that education used to provide.

Marion Johnson is a Policy Advocate with the Budget & Tax Center, a project of the NC Justice Center.