NC Budget and Tax Center, Uncategorized

Top 10 state budget missteps in 2015

The 2015 year brought plenty of budget missteps on Jones Street—from another round of tax cuts to state investments that are mired at historic lows. Here’s a look at the top 10 missteps that state policymakers should address in 2016.

  1. State lawmakers once again chose to cut taxes that primarily benefit the wealthy and profitable corporations over meaningful levels of reinvestment. The tax plan will reduce revenue by $1 billion annually when fully implemented, cutting off pathways to greater economic success like early childhood development, public schools, and community economic development while also failing to boost the economy or create jobs.
  2. State lawmakers failed to restore the state Earned Income Tax Credit (EITC), which benefited nearly 1 million families and their 1.2 million children. Yet, they chose to expand the sales tax to new services like maintenance, repair, and installation, effectively further shifting the tax load onto middle- and low-income taxpayers.
  3. The 2015 tax changes make our tax system more upside-down by asking even more from people who are already struggling to pay the bills. Under full implementation of the tax package, the lowest income working families will end up paying a tax increase of $7, on average, whereas millionaires are the big winners again with a tax cut of more than $1,800 on average.
  4. This budget doesn’t address falling wages, just as the last two budgets failed to do. In 2013 an hour’s work in NC earned around $2.50 less than the national average; now that gap has grown to almost $3.00. Allowing the state’s lowest-income families to keep more of what they earn through an EITC is a key way to build a stronger economy, along with a higher minimum wage and collective bargaining rights, but legislators failed to restore the tax credit and raise the minimum wage.
  5. State investment is at historic lows. State lawmakers passed a budget that keeps state spending as part of the economy below the 45-year average. That would be fine if needs have shrunk but they’ve grown. State budgets typically allow spending to grow as the population grows and the economy changes, especially after an economic downturn when revenues plummet and services are frozen or cut.
  6. State investments break an unwelcome modern record as they remain diminished. Lawmakers passed a budget that caps off the only period since 1971 in which state spending declined as a part of the economy for seven and eight straight years while the economy itself grew. Continuing on a tax-cut path means there simply won’t be enough revenue left over to repair critical investments or to position our state to compete.
  7. Eight years later, state investment remains below pre-recession levels despite more children to educate, more older adults to care for, and more citizens to serve and protect. Such long-term disinvestments have translated into significant unmet needs for our state’s growing population—a shortage of K-12 textbooks, school nurses, and community services for older adults.
  8. This budget continues to hold us back from ensuring educational success for every child. For the current school year, lawmakers invested more per student compared to the 2015 fiscal year budget but well below 2008 pre-recession levels—nearly $500 less per student. This will cause real harm to the classroom and educational outcomes. The number of students in North Carolina schools has continued to increase since 2008, yet the amount of funding per student— and, therefore, the resources available to educate each student—has not been state lawmakers’ priority over tax cuts.
    • For example, textbook spending is below half its 2010 peak level, leaving some schools with outdated textbooks or with no textbooks at all.
  9. Continuing down a tax-cut path is deepening cracks in NC’s opportunity structure—and it has left several vital areas of public programs and services inadequate.
    • For example, lawmakers kept year-over-year spending flat for the pre-kindergarten program that serves at-risk 4-year olds. They failed to restore the more than 6,400 slots lost since 2009 or give opportunity to the 7,200 children stuck on the waiting list.
    • For example, tuition at community colleges rose for the seventh consecutive year to $76 per credit hour from $72—an 81 percent increase since 2009—increasing the likelihood of a college education being out of the reach of many.
  10. This tax-cut path—and the revenue losses that come with it—also mean that some investments are completely missing from the budget.
    • For example, there is no cost-of-living adjustment for retired public employees like former state troopers and teachers despite their shrinking purchasing power due to changes in the economy.
    • For example, there is no Medicaid expansion, which means lawmakers denied affordable health care to about 500,000 North Carolinians.
    • For example, there is no support to ensure that all rural communities have reliable high-speed internet access that is increasingly essential to participating in the global economy—which leaves struggling rural communities further behind urban areas.

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Uncategorized

As GOP presidential frontrunners double down on immigration, NC Latinos combat discord (video)

The latest Elon University poll shows support for real estate mogul Donald Trump and retired surgeon Ben Carson virtually tied among North Carolina Republican voters.

The poll released this week shows Trump with 22 percent of the vote, Carson at 21 percent, and Carly Fiorina trailing at 10 percent in their bid to capture the 2016 Republican Presidential nomination.

Over the past several weeks, the candidates have spoken out strongly on the issue of immigration. Trump has advocated for deportation and suggested a review of birthright citizenship. Carson said this week that while anyone is welcome in America, immigrants cannot alter who we are. For her part, Fiorina has said she would not support a pathway to citizenship.

Local Latino advocates hope to tone down the negative political stereotypes aimed at immigrants this weekend as they celebrate the 22nd annual Fiesta del Pueblo.

“The political debate on immigration has taken a negative turn in recent months,” says Angeline Echeverría, Executive Director of El Pueblo.  “La Fiesta del Pueblo counteracts this rhetoric by helping Latino and non-Latino community members to come together and learn from each other in a fun way.  It also encourages community members of all backgrounds who value diversity to connect with local organizations and promote civic engagement.”

In addition to the art and cultural exhibits, more than 50 non-profit organizations and state agencies will share information and resources with festival-goers. El Pueblo will also register voters and recruit for its on-going leadership programs.

Click below to hear Echeverría talk more about the anti-immigrant rhetoric in the presidential race. The full radio interview with NC Policy Watch can be accessed here. For more on the Elon University poll, click here.

Commentary, Uncategorized

New ads ask Gov. McCrory, “Where’s the plan to expand coverage?” (AUDIO)

The North Carolina Justice Center launched radio and digital ads this week urging people to ask Gov. Pat McCrory to release a plan that expands affordable health insurance in our state.

We have the opportunity to tap federal funds to extend affordable insurance coverage to more than 500,000 people struggling to pay for care. Our tax dollars are sitting in Washington waiting to be used to boost rural health care in our state and save more than 1,000 lives every year.

We can expand Medicaid with this money or we can develop a state-specific plan to experiment with new coverage ideas. Conservative Governors in Arkansas, Iowa, Indiana, Montana, Utah, Tennessee and elsewhere have proposed specific policies. Gov. McCrory told news outlets at the beginning of the year that he was considering doing the same. The hold up, he claimed at the time, was the latest Affordable Care Act challenge at the U.S. Supreme Court. He would announce his support, or opposition, to expanding coverage after the high court ruled in King v. Burwell.

King v. Burwell came and went and still no word from the Governor.

The Governor and legislators all have access to taxpayer funded healthcare so they can afford to delay a decision. Many others in our state aren’t so lucky.

These 500,000 North Carolinians are mostly the working poor with jobs in construction and food service that do not provide health insurance benefits. They don’t currently qualify for Medicaid because eligibility is restrictive in our state. They can’t afford to buy private insurance. Now they are stuck and just need action from their elected representatives.

It starts with the Governor. He can change the dynamic by showing leadership and proposing a plan. Go to NC Left Me Out and share your story if you or a loved one are in the coverage gap. And then use the phone number listed to contact Gov. McCrory and ask him, “Where’s the plan to expand coverage?” We can’t wait any longer.

Uncategorized

McCrory still opposed to sales tax plan and still unwilling to talk to reporters

Gov. Pat McCrory, who has never met a groundbreaking in Charlotte on a Friday that he didn’t like, was at another one today and didn’t feel much like answering questions from pesky reporters, according to the Charlotte Business Journal.

The former Charlotte mayor, while walking to his SUV to depart for another meeting, said he did not have time to take questions. Asked for a quick comment on the sales-tax proposal, McCrory told me, “My position hasn’t changed.” As he ducked his head into the car, I asked what he thought the chances are for the sales-tax plan to be approved. The governor chuckled and said, “My position hasn’t changed.”

The problem for McCrory is that currently the sales tax proposal that changes the way local sales tax revenue is distributed is now part of legislation that funds business incentive programs that he is desperate for lawmakers to approve.

Reporters would have probably asked him about that had he talked to them for five minutes, but he couldn’t seem to find the time. Thursday he also avoided reporters waiting with questions after his remarks at an N.C. Chamber education event.

Wonder why the governor is so media averse lately? What questions is he scared to answer?

Uncategorized

Celebrating Medicare and Medicaid with a little help from our friends

Fifty years ago today President Lyndon B. Johnson created two of our most important safety net programs, Medicare and Medicaid. Medicare gave many seniors the health care access and financial security they lacked, and Medicaid gave many children a stable start in life. To help celebrate the occasion we decided to share several historical and policy-minded blog posts about these critical programs from some of our favorite national partners.

Community Catalyst says that we should celebrate the achievements of Medicare and Medicaid but notes that now is no time to rest:

At the time of enactment, roughly half of all older adults in the United States had no health insurance. Today, Medicare and Medicaid cover nearly 1 out of every 3 Americans – more than 100 million people. But there are still millions more without coverage of any kind, or with coverage, but inadequate access to care and services they vitally need.

While a pause for celebration is in order today, complacency is not.

The United States continues to spend almost twice as much per capita on health care as any other western democracy, with far less “bang for our buck,” in terms of health status and outcomes to show for it. Significant health disparities and unequal access to quality care continue to be hallmarks of our health system. These issues pose a threat to the sustainability of Medicare and Medicaid, as well as new programs established under the Affordable Care Act.

The Georgetown Center for Children and Families is celebrating because Medicaid has made a critical difference in the lives of so many kids (They even have a bonus video!):

With 50 years of experience serving growing numbers of America’s children, a new body of research is able to take a look at the long-term effects of childhood Medicaid coverage. Medicaid expansions in the 1980s and 1990s provided a natural experiment for researchers to evaluate how Medicaid eligibility affects children later in life. This longitudinal research tells us that children eligible for Medicaid grow up to be healthier, more academically successful, and financially secure adults than their non-Medicaid-eligible peers. We released a report that summarizes these findings earlier this week.

The Center on Budget and Policy Priorities has a post with 10 facts about Medicaid and Medicare. You should read them all but for our purposes number 9 is especially important:

9. Health reform’s Medicaid expansion is saving states money. The federal government will pay the entire cost of health care for newly eligible beneficiaries through 2016, and many states that have expanded Medicaid have found that it has produced net savings for their budgets. States will spend just 1.6 percent more on Medicaid and CHIP with the expansion than they would have without health reform, CBO estimates. Hospitals in expansion states are treating fewer uninsured patients, and the amount of uncompensated care they are providing is declining steeply. Meanwhile, hospitals in the states that have not expanded Medicaid continue to provide large amounts of uncompensated care, and the states are missing the opportunity to leverage billions of dollars in new federal funding through the expansion.

And, to commemorate the occasion, FamiliesUSA posted its many resources on Medicaid expansion with a reminder that Medicaid protects people from every walk of life.

Medicare and Medicaid were signature health care and anti-poverty achievements that we must work everyday to protect and strengthen. In our state that means pushing to expand the benefits of health care access to 500,000 more of our neighbors to give them a fair shot at living full, productive lives. Fifty years of experience tells us that’s the right thing to do.