NC Budget and Tax Center

With lawmakers set to hammer out a final state budget, North Carolinians are hearing a lot of misleading claims about the inability to afford important investments in the state’s economic future. Unmentioned is that the state’s constrained finances – at a time when the economy is improving – stem from the decision to sharply cut taxes over the past three years instead of building a strong foundation for lasting growth.

So when policymakers say that making investments in one area of the budget limit the ability to invest in other areas, they are right in lamenting limited resources. But they are offering false choices because they leave out the fact that the limits on resources available to help North Carolinians build a secure future come from House and Senate leadership prioritizing tax cuts over investments that drive the economy forward. And these constraints are likely to continue far into the future because the proposed House and Senate budgets include tax cuts that cost anywhere from $650 million to $1 billion over the next two years, depending on which version of the budget the two houses eventually agree to enact.

By locking themselves into these false choices legislators fail to acknowledge that halting further tax cuts would help ensure that schools have the resources they need and that important supports are available to promote healthy and safe communities.

Let’s sort out some of these false choices and shed light on how different it could be if the state had taken the common-sense path of avoiding such damaging tax cuts.

  • Classroom Teachers vs. Teachers Assistants. Today, our schools have nearly 4,800 fewer classroom teacher positions and more than 7,000 fewer state-funded teachers’ assistants than in 2009, which is especially bad considering there are 43,000 more students in our schools. The Senate budget drastically reduces funding for teachers’ assistants and provides some additional funding for classroom teachers. But neither the House nor Senate budget would restore the number of teachers and assistants to the 2009 level. Without tax cuts, North Carolina could invest in teachers and teachers’ assistants, providing the next generation a better shot at getting the skills to compete in a global economy.

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News

Supreme courtThe U.S. Supreme Court handed down the last of its opinions this morning, closing out a term that saw several blockbuster cases go down to the wire.

Below, in the order in which opinions were released starting last Thursday, are brief recaps of some of the court’s landmark decisions.

Fair Housing  In a 5-4 decision written by Justice Anthony Kennedy, the court held in Texas Dep’t of Housing v. Inclusive Communities Project that housing discrimination cases can proceed in court upon a showing that a challenged practice disproportionately affects minorities, rejecting the argument that such cases turn upon proof of discriminatory intent and handing an important win to fair housing advocates and civil rights groups.

A Texas non-profit filed the case in 2008, alleging that the state housing agency distributed affordable housing tax credits in a way that thwarted integration efforts — disproportionately granting them to minority areas while denying them in white areas of Dallas.

The court’s decision is here.

Affordable Care Act  In a 6-3 decision written by Chief Justice John Roberts, the court upheld the availability of subsidies to health insurance purchasers on both state exchanges and the federal exchange, affirming the Fourth Circuit’s decision in King v. Burwell.

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” Chief Justice John Roberts  wrote for the majority. “If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.”

North Carolina, like three dozen other states, did not set up its own health care exchange.  More than 560,000 state residents purchased health insurance on the federal exchange instead, with more than 90 percent doing so with the help of subsidies designed to make coverage affordable for middle- and low-income purchasers.

The court’s opinion is here.

Same-sex marriage  In a 5-4 decision written by Justice Anthony Kennedy, the court held in Obergefell v. Hodges that state bans on same-sex marriage were unconstitutional.

“No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family,” Kennedy wrote. “[The challengers] ask for equal dignity in the eyes of the law.The Constitution grants them that right.”

The court’s decision came on the anniversary of two other landmark decisions on gay rights also authored by Kennedy:  Lawrence v. Kansas, in which the court struck a Texas sodomy law, and U.S. Windsor, in which the court struck down provisions of the Defense of Marriage Act and ruled that the federal government must afford same-sex couples the same benefits it extends to heterosexual couples.

The court’s decision is here.

Redistricting  In a win for efforts to rein in gerrymandering, the court with a 5-4 decision written by Justice Ruth Bader Ginsburg upheld a voter-approved independent redistricting commission created to draw congressional maps in Arizona.

Efforts to create such a commission in North Carolina gained some bipartisan support this year with bills filed in the General Assembly, though none moved far enough ahead to be considered this session.

The court’s decision in Arizona State Legislature v. Arizona Independent Redistricting Commission is here.

Lethal Injection In a fiery 5-4 decision written by Justice Samuel Alito that mirrored an equally contentious debate among the justices at oral argument, the court held in Glossip v. Gross that Oklahoma’s use of a three-drug cocktail containing the controversial drug midazolam did not violate the 8th Amendment prohibition against cruel and unusual punishment.

Midazolam was to blame in recent botched executions in that state.

Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented, with Justices Ginsburg and Breyer calling for a full review of whether the death penalty is constitutional.

North Carolina switched from a three-drug cocktail to a single drug protocol in late 2013, but the rulemaking process leading up to that change has been challenged in court. And like other execution drugs, the state’s drug of choice, pentobarbital, has grown scarce.

The court’s decision is here.

Clean Air Act In the last opinion of the term, and another 5-4 decision written this time by Justice Antonin Scalia,   the court rejected regulations requiring coal burning power plants to sharply reduce mercury emissions.  The court held that the Environmental Protection Agency should have taken costs to power producers into account during the first stage of its rule-making process, when it was deciding whether reducing mercury emissions was worth doing from a health perspective.

North Carolina was one of 20 states that opposed the request for review by the Supreme Court, saying that the EPA was well within its prerogative in prioritizing emissions impact over industry costs. Those states also argued that several of them had passed even stricter regulations and that companies have adapted.

The court’s decision is here.

News

Look for lawmakers to pass a continuing resolution this week to keep state government operating until the House and Senate can agree on the state’s 2015-2017 budget.

One issue that educators are watching closely is how lawmakers will fund teaching assistants in the final spending bill.

As the Sanford Herald reported over the weekend, local school districts are pondering what it would mean to lose thousands of TAs:

Senator Ronald J. Rabin

Senator Ronald J. Rabin

Sen. Ronald Rabin (R-Lee, Harnett, Johnston) said the legislature was busy working toward a finalized budget, but that he was uncertain how it would affect teacher’s assistants.

“Teacher’s assistants perform a valuable function,” Rabin, who voted for the Senate’s proposed budget, told the Herald on Saturday. “Everyone’s aware of that. The fact is we can’t afford everything everybody wants. We have a balanced budget mandate by law, and we have a finite number of revenues to spread across that.”

Rep. Brad Salmon (D-Lee, Harnett) and Rep. Robert Reives II (D- Lee, Chatham) didn’t respond to calls for comment, but both voted for the House’s proposed budget.

Lee County Schools Superintendent Andy Bryan maintained that teacher’s assistants provided a valuable function in kindergarten, first-, second- and third-grade classrooms.

“Our board has taken the stance that they want to protect the classroom,” Bryan said. “We see teacher’s assistants as a very important part of making sure our classrooms are served well and are successful for our students.”

Lynn Smith, chairman of the Lee County Board of Education, agreed, adding that the Senate’s proposal to reduce class sizes to ease the burden on elementary teachers would not be enough to serve students.

Public ed cuts

Educators and parents will rally for teaching assistants Tuesday.

“I know there’s been a conversation about putting money back in the budget to reduce classroom size,” Smith said. “But the fact is that not having someone in there for grades K-3 really makes it difficult for teachers to meet all the diverse needs of the kids that they’re serving.”

Smith also pointed out that many teacher’s assistants, like Womble, served as bus drivers as well.

“If we lose teacher’s assistants, I guess you’d have to go out and hire part-time employees to drive the buses,” Smith said. “Goodness, I don’t know how we’d deal if we lose our bus drivers.”

On Tuesday, the NC Association of Teacher Assistants, Aim Higher Now, along with dozens of parents and educators will speak out against the North Carolina Senate’s plan to slash 8,500 teacher assistant jobs.

The group is hoping to have an impact on the budget discussions before lawmakers adjourn for a week-long summer recess.

News

In a case with implications for admissions policies at UNC-Chapel Hill, the U.S. Supreme Court agreed today to review for a second time admissions policies at the University of Texas at Austin.

The high court first reviewed the case filed by Abigail Fisher, a white student denied admission to the University of Texas at Austin allegedly because of her race, in 2012. In a 7-1 decision the following spring, the justices sent Fisher v. University of Texas at Austin back to the 5th U.S. Circuit Court of Appeals for further review.

Justice Anthony Kennedy writing for the Court said that “because the Fifth Circuit did not hold the University to the demanding burden of strict scrutiny articulated in Grutter and Regents of Univ. of Cal. v. Bakke, its decision affirming the District Court’s grant of summary judgment to the University was incorrect.”

“[S]trict scrutiny does require a court to examine with care, and not defer to, a university’s ‘serious, good faith consideration of workable race-neutral alternatives,’” Kennedy added.

The appeals court did that and upheld the university’s admissions policies again in July 2014, finding that they withstood the strict scrutiny test.

In the second petition filed at the court and granted today, Fisher’s attorneys ask the court to “strike down UT’s unjustified use of race, and once again make clear that the Equal Protection Clause does not permit the use of racial preferences in admissions decisions where, as here, they are neither narrowly tailored nor necessary to meet a compelling, otherwise unsatisfied, educational interest.”

How the high court rules next term in Fisher will have some bearing on the case filed in federal court here against UNC-Chapel Hill in November, alleging similar flaws in the university’s admission policies. (A similar lawsuit was filed in Massachusetts federal court against Harvard by the same group on the same day.)

As SCOTUSblog’s Lyle Denniston described the Harvard and UNC lawsuits:

The basic thrust of the new lawsuits is that Harvard and the flagship university in North Carolina are using admissions programs that cannot satisfy the tough constitutional test for judging race-based policy — “strict scrutiny.”  But their broader theme is that the Supreme Court’s affirmative action efforts beginning with the Bakke ruling have failed to end racial bias in admissions programs, so it is now time to overrule Bakke and at least one other decision.

In the lawsuits, filed under the name “Students for Fair Admissions Inc.,” attorneys for plaintiffs — selected after a nationwide search by backers of Project for Fair Representation — argue that diversity at the schools can be achieved by race-neutral alternatives and that public colleges and others receiving federal funds should be ordered to end the use of race in admissions altogether.

The same attorneys representing Fisher at the Supreme Court are representing the students in the UNC case here, which is pending in Winston-Salem and is now assigned to U.S. District Loretta Copeland Biggs, who took her seat on that court this past December.

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Commentary

The story broken by NC Policy Watch reporter Lindsay Wagner (i.e. one of the reporters unwelcome at Gov. Pat McCrory events) about the Senate’s secretive plan to cut health insurance benefits for future state retirees is the subject of the lead editorial in this morning’s edition of Raleigh’s News & Observer. Here’s the N&O:

“Now, the state Senate is looking, in a rather secretive way through a provision deep in its budget, to end that health care insurance benefit for those hired by the state after Jan. 1, 2016. Current employees wouldn’t be affected. But don’t think of that as some kind of generosity on the part of Republican senators pushing this idea. If benefits of those under the current plan were ended, legal challenges would ensue.

There’s a reason this idea was buried in the Republican Senate budget, and that was to avoid debate that would generate tremendous and doubtless angry response from tens of thousands of current and former state employees. Perhaps that’s why, asked by a reporter about the proposal, Senate budget writer Sen. Harry Brown just walked away. That is a most discouraging action on the part of an elected official, to decline to explain or defend an action….

As House and Senate negotiators hammer out a final budget, we must hope that cooler heads prevail and that lawmakers who have doubts about targeting an important benefit for state workers will speak up and stop this movement. It smacks of political payback by Republicans who haven’t liked the criticism they’ve occasionally gotten from SEANC and some members. The problem with such payback is that taking away this benefit will hurt state government from top to bottom – and will thus hurt the people government is supposed to serve and often serves well.”
As an aside, it would be ironic if the secret provision was somehow the result of the Senate is being mad at the State Employees Association. When SEANC was headed by its corrupt former leadership, it regularly bestowed honors on Senate GOP leaders — including making Phil Berger its “legislator of the year” at one point.