NC Budget and Tax Center

Deep in the weeds of the House budget is a provision that would authorize the state to issue just shy of $300 million in new debt to pay for five large projects. Each of these projects (listed below) has merit, but this proposal raises two important questions:

1) Why do we have to issue debt to pay for these projects?

2) What will we have to give up down the road when the bill comes due?

North Carolina shouldn’t have to borrow the funds for these projects. Don’t forget, the tax cuts passed in 2013 already cost the state nearly a billion dollars this year, much more than would be needed to cover the costs of these projects.

The 2013 plan will also slash corporate taxes even further over the next two years. If the scheduled corporate tax cuts go into effect, it will cost the state an additional $100 million next year and another $300 million the year after that. If we hold off on additional corporate tax cuts, North Carolina could pay for these projects outright.

Ultimately, this means throwing money out the door in interest payments to keep cutting taxes for wealthy individuals and corporations. The Fiscal Research Division estimates that interest payments on the new bonds will start at $22.7 million next year and then rise past $28 million in the subsequent years.

The interest payments alone would be enough to cut the waiting list for pre-K in half, or put 1300 teacher’s assistants back into North Carolina classrooms, or avoid raising tuition at Community Colleges (as is slated to happen in the House’s budget).

Overall, the House spending plan is moderate compared to budgets we’ve seen over the last few years. But, even while it’s taking a step in the right direction, the House still cannot get around the enormous hole that we started digging in 2013. That’s why, when we need to invest in North Carolina’s future, the House is reaching for the credit card instead of writing a check.

Projects to be funded with bond revenues:

  • Phase 1 of new Highway Patrol Training Academy ($30 million)
  • DHHS Medical Examiner Lab ($13 million)
  • NC State Engineering Building ($65 million)
  • UNC Charlotte Sciences Building ($90 million)

Appalachian State Health Sciences Building ($71 million)

News

When state lawmakers get ready to tackle Medicaid reform this year, they’ll be working with a new state Medicaid Director.

DHHS Secretary Aldona Wos announced Thursday that Robin Gary Cummings will step down from the post in June to become the Chancellor of the University of North Carolina at Pembroke.RichardandCummings2

Dr. Cummings,  who assumed the duties of  North Carolina’s Medicaid director just 13 months ago, said he’s looking forward to changing directions to focus his attention on higher education.

“It’s the highest position I can go home to,” said Cummings. “Serving under the leadership of Secretary Wos as the state’s Medicaid Director has been an honor and one of the most valuable experiences of my career.

“This has given me a better understanding of our citizens’ needs and has prepared me to be an effective leader in my next role as the chancellor of UNC-Pembroke.”

Taking over as the state’s new Medicaid director will be Dave Richard, Deputy Secretary of Behavioral Health and Developmental Disability Services.

From DHHS’ media advisory:

Richard has extensive experience with the Medicaid program throughout his 33-year career. In his work with The Arc, he was involved in advocacy and policy development related to the Medicaid program at the state and national level. In his tenure as executive director of The Arc of North Carolina, he led The Arc’s effort to become a provider under the Medicaid program and provided leadership for its successful programs.

Since joining DHHS as director of the Division of Mental Health, Developmental Disabilities and Substance Abuse Services and in his current role as Deputy Secretary, he has been directly involved with the oversight of the Local Management Entities and Managed Care Organizations (LME-MCO) system, which is responsible for more than $2 billion of Medicaid funding in a managed care delivery system.

Richard will become North Carolina’s third Medicaid director since January of 2013.  Progressive Pulse readers may recall the N.C. Department of Health and Human Services (DHHS) initially brought in Carol Steckel from Louisiana to manage the Medicaid program.

Steckel resigned from the post eight months later to take a position with WellCare Health Plans in Tampa, Florida.

Cummings’ last day on the job is June 5.

News

A private Christian school in Fayetteville that has received more than $100,000 in taxpayer-funded school vouchers is now the subject of a criminal investigation into allegations that the head of school knowingly allowed a registered sex offender to work on campus. No criminal charges have been filed in relation to the case.

The offender, whose wife was also a teacher at Freedom Christian Academy, was on that school’s campus doing handyman work during the 2011-12 school year, occasionally coming into contact with students, according to a report filed by the Fayetteville Observer.

The Cumberland County Sheriff’s office executed a search warrant Wednesday to determine if the head of school, Joan Dayton, knowingly allowed the sex offender, Paul Conner, to work at the school.

Conner was found guilty in 2001 of taking indecent liberties and committing a sexual offense with an 8-year-old child. The offense occurred in 1994, when Conner was 30, and he served two years in state prisons from 2001-2003, according to the N.C. Department of Corrections.

“Yes, it’s a long story they obviously don’t want out,” said Dayton in a February 2012 email response contained in the search warrant that was addressed to another teacher who pointed out that Conner was a registered sex offender. “I have had many talks with him and he like lin [sic] were falsely accused. Do you want to hear the story from me?”

The sheriff’s office also investigated complaints that school officials changed grades for athletes and other favored students.

In a statement emailed to parents Wednesday evening and reported on WRAL.com, Dayton said Conner was simply helping his wife with her classroom after school hours and building some shelving for the school.

Ronnie Mitchell, a spokesperson for the Cumberland County Sheriff’s office, says the complainants in the investigation—a parent, teacher and former administrator—say otherwise, noting Conner was on the campus multiple times. Search warrant records also indicate Conner was paid for his work.

Based on the findings of the investigation to date and the affidavit in the search warrant, Mitchell said Dayton did conduct a criminal background check on Conner and knew that he was a registered sex offender, but employed him anyway. Once it was revealed to others that he was a sex offender, she terminated his employment, according to the search warrant.

State law says that registered sex offenders cannot come onto school grounds, regardless of whether they would or would not have arranged contact with students in the form of instruction or caregiving.

Cumberland County Schools Superintendent Frank Till said this would never happen at the district’s public schools.

“It wouldn’t be allowed. We screen all of our people and the principal does not have discretion,” said Till, with regard to hiring registered sex offenders.

Some with criminal backgrounds of lesser offenses are considered for school-based positions, like those who may have shoplifted in the past, said Till.

“But once you abuse a child, there’s no second chance. You’re finished,” Till said, adding that if Freedom Christian’s head of school somehow made it past the elaborate screening process the public schools use, he’d fire her.

Freedom Christian Academy is one of the top five private schools that have received taxpayer-funded school vouchers, formally known as Opportunity Scholarships.

The private religious school has received $108,254 in public dollars to date—the state’s fifth largest voucher recipient. Twenty-six of its 500+ students have each been able to use up to $4,200 in public funds to pay for tuition at the school.

State lawmakers passed a 2013 budget that tagged $10 million to be used for the “Opportunity Scholarships” beginning last fall. The vouchers, worth $4,200 per student annually, funnel taxpayer funds to largely unaccountable private schools–70 percent of which are affiliated with religious institutions. Teachers at private schools do not have to be licensed, and, as noted before, do not have to undergo criminal background checks.

The private voucher schools are also free to pick and choose who can attend their schools, in spite of the fact that they receive tax dollars. Freedom Christian Academy requires its applicants to accept Jesus Christ as their Lord, have at least one parent be a follower of Christ and provide a pastoral reference as part of the admissions process.

Superior Court Judge Robert H. Hobgood found the state’s new school voucher program to be unconstitutional last year, but the program has been allowed to proceed while a court battle over the program’s legality continues.

The state Supreme Court is expected to hand down a decision on the constitutionality of school vouchers within weeks, as the House debates a budget bill that could expand the program significantly, adding nearly $7 million to its coffers.

*Investigative reporter Sarah Ovaska contributed to this report.

2015 Fiscal Year State Budget, NC Budget and Tax Center, Raising the Bar 2015

Raising the Bar in North CarolinaThis post was written by Michael C. Behrent, associate professor of history, Appalachian State University and is part of the Raise the Bar series featuring expert views on the North Carolina budget debate.

Is our state government doing all that it can to offer North Carolinians the affordable, high quality education they need to secure twenty-first century jobs? Based on data in a recent report from the Center on Budget and Policy Priorities, the answer is clearly “no.”

Affordable public education in North Carolina is a right. Our state constitution states that the legislature must ensure that “the benefits of The University of North Carolina and other public institutions of higher education, as far as practicable, be extended to the people of the State free of expense.” Yet today, free public education is little more than a distant memory. To make matters worse, our citizens find themselves in a college crunch: they are being asked to pay more and more for public universities that are providing less and less.

According to the report, since 2008, tuition at North Carolina’s public universities has grown by 35.8% (or $1,759). The main reason? The 2008 recession, which cut the flow of tax dollars into state coffers at the very moment when many people were choosing college over a grim job market. As state funds dried up, most public universities turned to tuition hikes as an easy fix.

Yet the recession doesn’t bear all the blame: many state legislatures, including North Carolina’s, took advantage of the budget crisis to push questionable ideological agendas. Specifically, they rejected a balanced approach that would combine spending cuts with tax increases, preferring to slash budgets. Universities thus had little choice but to ask students to pay the balance. Read More

News

Bar studyA new study released today by the North Carolina Bar Association shows that the state court system generated more than $460 million in direct economic impact and supported more than 6,000 jobs here last year.

“The study reveals what we have known all along – our courts have an enormous impact on our economy and deserve adequate funding in order to serve the needs of North Carolina citizens and businesses,” NCBA president Catharine Arrowood said.

The association commissioned the study as part of renewed efforts to educate state residents and lawmakers about the critical role the courts play not only in protecting citizens’ rights but also in supporting the state’s economy.

Despite the demonstrated economic impact, the courts have take unprecedented hits over the last five years, seeing budgets slashed by as much as 30 percent in some areas.

“The study shows that cuts in funding over the past four years have totaled $35 million,”Arrowood added. “This reduction in direct spending has had a cumulative four-year total impact on the North Carolina economy just over $67 million in reduced spending.”

Read the full report here.