NC Budget and Tax Center

Another round of tax cuts for corporations, extended tax breaks for selected industries, and considerable fee hikes for families and businesses are included in the tax and budget package that the House leadership unveiled yesterday afternoon. Because tax changes affect the level of state resources that are available for investment, lawmakers must decide on its tax priorities ahead of approving their budget bill for the upcoming 2015-17 biennium. The House Finance committee tweaked the tax changes last night and now the budget bill is moving through the committee process with the expectation of a final vote on the House floor by Friday.

How the state raises the money that supports public schools, health care, courts and other core supports to the economy and communities should get just as much scrutiny as the spending side of the budget debate—but this is rarely the case. Examining how lawmakers pay for the budget is important in light of the 2013 tax plan that continues to drain resources, which otherwise could have been used to build opportunity and replace the worst cuts enacted since the economic downturn.

The House leadership pays for its FY2016 budget proposal in the following way: Read More

News

Supreme courtThe U.S. Supreme Court has begun clearing the decks en route to the end of its term in late June, handing down six opinions yesterday.

Though none came in the high profile cases — Obamacare or same-sex marriage, for example, which will likely be handed down in the court’s last week — yesterday’s decisions still involved some issues worth noting.

In Henderson v. United States, a unanimous court held that convicted felons could sell or otherwise dispose of their guns to independent third parties.

More here at SCOTUSblog:

When people are arrested, they often surrender their firearms to police. Once those people are convicted of felonies, they can no longer lawfully possess their weapons. In this situation, the Supreme Court unanimously concluded, the felon can ask the government to transfer his firearms to an independent third party. This includes transfers to dealers for sale on the open market, but in some circumstances can also include directed transfers to specific people.

In Tibble v. Edison International, a likewise unanimous court held that employee retirement plan managers have a continuing duty to monitor investments and act “with prudence” to protect funds beyond that exercised when initially selecting such investments.

More here from Forbes:

“The Court’s decision confirms that fiduciaries cannot go on autopilot,” said John Donovan, a partner in the Boston office of Ropes & Gray, in an e-mailed comment. “Managing investments in ERISA plans involves not only prudently selecting those investments in the first place, but monitoring them to make sure that they remain prudent.”

In City of San Francisco v. Sheehan,  the court ruled in a narrow 6-2 decision that police officers have some leeway to fire their guns to subdue a mentally disturbed person who is violently threatening them. (Justice Stephen Breyer took no part because his brother, a federal judge in California, had ruled on the case in a lower court.)

More here from SCOTUSblog:

The Court provided little new guidance on the larger question of how the Fourth Amendment applies to claims that police used unnecessary force in carrying out arrests or other confrontations with the public — an issue that has gained new intensity in the wake of incidents in Ferguson, Mo., and other communities in recent months.

At most, the Court on Monday declared that it was not clearly established seven years ago, when the San Francisco incident occurred, that the Fourth Amendment requires police to take special precautionary steps to accommodate the mental disability of a person whom they are trying to subdue.   Because that was not the law at the time, the two officers had legal immunity from the woman’s claim that the Fourth Amendment require such an accommodation.

And in Comptroller v. Wynne, a divided court (5-4) held that Maryland’s personal income tax law violated the constitution because it doesn’t give residents a full tax credit for income tax paid out of state.

More here from the Washington Post:

[T]he state’s practice of withholding a credit on the county segment of the state income tax wrongly exposes some residents with out-of-state income to double taxation. The justices said the provision violated the Constitution’s commerce clause because it might discourage individuals from doing business across state lines.

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Commentary

Religious libertyIf you had any doubts about how ridiculous it is for government officials to be commencing public events with religious prayers, check out the squabble between two members of the Mecklenburg County Board of Commissioners as explained in this morning’s Charlotte Observer.

As reporters Tim Funk and David Perlmutt explain, the dispute apparently developed as the result of the Board of Commissioners’ policy of rotating the responsibility for opening meetings with prayer between members. One member, though herself a church goer, did not want to to lead prayers.  This, in turn, led another member to take offense and conclude that the other member was not pulling her weight. The dispute spiraled from there into an embarrassing spat that featured name-calling and all sorts of troubling statements about religion.

The Mecklenburg mess, of course, comes right on the heels of the recent debacle in Lincoln County in which a commissioner said the following about the possibility of his board opening its meetings with anything other than a Christian prayer:

“Other religions, or whatever, are in the minority. The U.S. was founded on Christianity. I don’t believe we need to be bowing to the minorities. The U.S. and the Constitution were founded on Christianity. This is what the majority of people believe in, and it’s what I’m standing up for.”

This kind of nonsense shows precisely why it is impossible for government to get involved in promoting prayer and religion in a useful way. For prayer to have any real meaning, it can’t just be comprised of sanitized and generic platitudes. But once one goes down the road of making it meaningful and specific, it inevitably excludes large swaths of the population with whose views and beliefs it does not comport.

That’s why the best solution (as the American Founding Fathers figured out almost 230 years ago) is to leave prayer to individuals and private institutions and keep public events and institutions religion-free. It’s better for government and better for religion.

Commentary

Solar powerIt’s hard to imagine a better public investment when it comes to long-term societal well-being than solar energy. In a time of increasingly dire environmental news, solar has the potential to bring huge benefits to the health of the planet while, at the same time, freeing numerous countries from their heroin-like addiction to the oil of various theocracies and dictatorships. Even if solar energy required significant and permanent public subsidies to be economically viable, it would be more than worth the investment.

Here, however, is the cool part: Solar energy is an increasingly viable and competitive industry that will require less and less public stimulus as time goes on. As demand rises and costs of solar installations (both large and small scale) continue to fall, solar is fast becoming a genuine rival to the fossil fuel industry. It is, in short, a best-of-both-worlds scenario: a money-making capitalist enterprise that could help save the world.

Unfortunately,  the fossil fuel industry and its apologists are doing everything they can to stifle this progress. A classic case in point is taking place right now in North Carolina where lawmakers are looking to decimate a law that has helped prime the solar energy  pump and place the industry on the road to full economic viability. Contributor Jesse Grossman explains in this morning’s edition of Raleigh’s News & Observer:

“HB 760 would reduce the state’s Renewable Energy Portfolio Standard from the existing 12.5 percent by 2020 goal to 6 percent. REPS has been critical to solar in North Carolina since it became law in 2007 and has fended off attacks with bipartisan support several times, most recently this April.

A REPS rollback would hamstring the market’s forward velocity and overall potential and is counter-intuitive considering solar’s statewide economic contributions and other states increasing their renewable energy targets. Read More

Commentary

The reviews are coming in as more and more people wade through the details of the House budget proposal. Here’s another sobering take from the executive director of NC Child:

Tiny plates and the House budget
By Michelle Hughes, Executive Director of NC Child

One of the most simplistic reheated bits of diet advice ever sold in the grocery checkout line is to eat your regular food, but to use a small plate and a small fork.

You’ll think your plate is full!! If you go back for seconds you won’t overeat so much!

Really?

The latest state budget for children’s services seems to have a few similar beliefs baked in–the key one being that before long you’ll believe that the plate in front of you is a regular-sized plate. Even though plates on your right and left are normal, you will not notice the one in front of you is small. Substitute ”appropriation” for “plate” and you get the point.

Set the budget table with tiny plates for many children’s programs and there you have the post-recession and post-2013 tax cut reality. The legislature fundamentally re-set the state’s budget priorities with tax cuts in 2013 and funding has not reached pre-recession levels since, although the state has grown in population and investment needs.

For instance, North Carolina’s premiere early childhood education programs, Smart Start and NC Pre-K, saw their funding reduced by 20% during the recession and have never seen that funding restored. Now, despite a growing population of children, we’re able to provide fewer of them with the strong start they need. Read More