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Despite the growing revenue challenge North Carolina faces, a new round of tax cuts went into effect with the start of the new year. While the growing revenue shortfall warrants immediate attention during the upcoming General Assembly legislative session that begins next week, inaction up to this point has already  dug a deeper hole as of January 1, 2015.

New personal income and corporate income tax rates are now in effect for 2015. The now-flat personal income tax rate dropped to 5.75 from 5.8 percent (the top marginal rate was 7.75 percent in 2013) and the corporate income tax rate dropped to 5 percent from 6 percent (it was 6.9 percent in 2013). These tax cuts will further reduce revenue for public investments and will largely benefit the wealthy and profitable corporation at the expense of low- and middle-income taxpayers.

The cost of the tax plan continues to grow higher than what state officials originally estimated. As of the end of the November, revenue collections are coming in $190 million below expectations. This loss is built on top of the already revised and anticipated revenue loss of $704 million due to the tax plan. Combined, this result in a nearly $900 million revenue loss for the state – much higher than the original $512 million cost estimate.

By the end of the fiscal year, BTC estimates a total revenue loss of around $1.1 billion Read More

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There is lots of talk on right-wing avenue this week about North Carolina’s big jump in the business climate rankings published by the right-leaning Tax Foundation.

Imagine that, a conservative think tank that evaluates states solely on their tax rates giving North Carolina a higher ranking for cutting taxes on corporations and the wealthy. More on that later this week on the main NC Policy Watch site.

But business leaders care about a lot more than just  tax rates when deciding where to set up shop—things like the quality of life for their employees, a well-educated workforce, good transportation infrastructure, etc. And they care about how states treat their workers.

That was the message from Apple CEO Tim Cook in a recent speech in his native state of Alabama.

Alabama was “too slow” to guarantee rights in the 1960s, Cook said, and it removed a ban on interracial marriage from its Constitution only 14 years ago.

And (Alabama is) still too slow on equality for the LGBT community. Under the law, citizens of Alabama can still be fired based on their sexual orientation,” said Cook, a native of coastal Baldwin County. “We can’t change the past, but we can learn from it and we can create a different future.

Workers in North Carolina can also still be fired based on their sexual orientation. Our state  leaders need to listen to Cook and create a different future here too.

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McCrory-with-Polar-bear (2)Governor Pat McCrory was all smiles today at the N.C Zoo as he cut the ribbon for the new polar bear exhibit. It’s not the first time that state politicians have talked about polar bears.

In the 2010 and 2012 elections, Republican-allied groups ran ads against Democrats in the General Assembly for supporting funding for polar bears at the zoo.

A 2012 story by WRAL-TV had the details.

One other ad targets former lawmaker Cullie Tarleton, a Democratic (sic) who is running against Rep. Jonathan Jordan in a rematch of the 2010 race, which Jordan won. This year’s anti-Tarleton ad features the lines: “He (Tarleton) voted to spend $200,000 on a Shakespeare festival and $2 million on a playground for polar bears. Real Jobs used the polar bear accusation to great effect in mailers during the 2010 election.

Now Republican Governor McCrory is posing with people in polar bear costumes to celebrate the exhibit that was attacked by the groups working to elect legislators of his own political party.

It is apparently not very far from Real Jobs to Real Hypocrisy.

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.