Commentary

In case you missed it the other day, the Charlotte Observer ran one of the best essays yet on the disastrous consequences that North Carolina can expect if the ALEC-inspired “Taxpayer Bill of Rights” becomes embedded in the state constitution and what we ought to do instead.

Leslie WinnerIncrease teacher pay without TABOR

By Leslie Winner

I was talking to the superintendent of a small school system last fall, and she mournfully told me about losing her best high school math teacher to South Carolina, where he would earn $10,000 more per year for doing the same job. We all know young adults who would be good teachers, who would like to teach in North Carolina, and who won’t go into teaching, or who are leaving or won’t come to North Carolina, because we do not pay enough for a teacher’s family to live on. We all know of schools that will open this month without a qualified teacher in each classroom, that are facing a shortage of math, science, and foreign language teachers, because those schools cannot find enough qualified teachers to hire.

Almost all of us in North Carolina deeply believe that our public schools should prepare each child for a meaningful and productive life. Kids are different from each other, and each child deserves to get a year’s worth of growth for a year’s worth of school. Parents also deserve to be confident that their children will finish school prepared for the future. We know that to accomplish this, schools must have good teachers in each classroom and enough up-to-date textbooks and technology.

Since North Carolina is currently significantly behind in providing enough funding for teachers, textbooks, and technology, I was surprised to read that talk of TABOR, the so called “tax-payer bill of rights,” has resurfaced in the legislature. This proposed amendment to the state’s Constitution would both cap North Carolina’s income tax at 5%, helping those with higher incomes, and cost the state $1.5 billion a year in revenue. It would also limit increases in state spending, based on inflation and population growth, limiting North Carolina, effectively, to the amount we are spending now, with no room for improving public schools even in prosperous times.

We are fortunate to have thousands of effective, dedicated teachers in our schools. To keep them, and to attract new ones, we need to recruit smart young adults into the profession, provide the best with prestigious teacher scholarships, prepare them well, respect and support them as teachers, and pay them enough so they can support their families while they work as teachers. Currently, about half our teachers quit in their first five years. If we invested in recruiting, preparing, supporting, and paying them well, more would stay longer, reducing the number we need to hire each year, and allowing us to invest more into recruiting, preparing and supporting the next round of new teachers. Read More

Commentary

DENRpicFor many years, North Carolina has been lucky enough to be served by a dedicated group of public servants of both major political parties who were committed to protecting and preserving the state’s natural environment from the frequently destructive impacts of rapid population growth, industrialization, mushrooming energy use and all of the other trappings of modern American society. A large number of these fine people served in an agency that has long operated under the moniker “Department of Environment and Natural Resources” or “DENR” for short.

In 2015, however, it’s now clear that things have changed. Oh sure, there are still some dedicated public servants of both major parties doing their best to pursue the goal of preserving something of our natural environment, but increasingly, it’s clear that DENR’s leadership has no real interest in such a mission. In recent days, for instance, the appointed leader of what is supposedly North Carolina’s environmental protection agency spent much of his time: a) promoting offshore oil drilling near North Carolina’s beautiful and fragile coastline and b) railing against efforts by the federal government to promote clean air and fight the existential threat of global warming. What’s next — a new DENR initiative to promote fracking?

The bottom line: “DENR” clearly no longer stands for what it once did. It is obvious, therefore — at the risk of giving the McCrory people an idea that they’ll run with — that the agency should be rechristened the Department of Exploitation of Natural Resources.

They won’t even have to change the acronym. A change to the symbols in the above logo might be apt however. How about an oil spill, some smoggy air and a patch of parched and barren land?

NC Budget and Tax Center

The new state labor market data will come out tomorrow.  Ahead of that and in light of the current discussion of unemployment insurance in the General Assembly, it seemed a good time to revisit the state of the labor market for jobless workers and the effectiveness of unemployment insurance in providing workers with the support they need while looking for work and in buttressing the economy.

Prosperity Watch this week looked at data available from the North Carolina Department of Commerce that shows at the county level the ratio of jobless workers to job openings. More than two-thirds of the state’s counties still have more jobless workers than job openings.  Even if all the job openings in those 83 counties were filled, there would still be workers looking for work.

Even while North Carolina has cut the number of weeks that workers can claim unemployment insurance, a lack of job openings means that a lot of people are spending prolonged periods out of work..  Despite the official recovery, one out of three jobless workers has been out of work for 26 weeks or more.  The long-term unemployed face a host of additional barriers to employment including discrimination in the application process, lapse in skills for the work place and mounting debt that may make transportation or housing difficult to sustain.

Unemployment insurance was designed to prevent just this kind of vicious cycle.  The system is meant to ensure that workers who lost their jobs through no fault of their own—like because of a business downturn—can meet their basic needs while they look for work and thus not withdraw completely from participating in economic life as consumers, renters or homeowners.  Today however, the system is not meeting that goal:

  • The state has a 15% recipiency rate, measuring the number of jobless workers who receive unemployment insurance, for the first quarter of 2015 which ranks us 47th in the country.
  • The state has an average weekly benefit amount of $231.30 which ranks us 47th in the country.
  • The average duration that a jobless worker receives unemployment insurance is 12.9 weeks which ranks us 45th in the country.

Read More

News

Community Care of North Carolina saves the state’s Medicaid program money, by about $309 per patient, according to an audit released today by the State Auditor’ s Office.

The audit was conducted at the behest of the legislature, which asked for it in 2013 to see if the state was saving money by using CCNC, a provider-led entity that manages the health care of approximately 1.2 million of the state’s 1.5 million Medicaid recipients. Medicaid is a federally-mandated program that provides health care to low-income children, elderly and disabled people.

North Carolina lawmakers have opted not to expand Medicaid, which would offer health insurance to additional low-income adults not eligible for health insurance subsidies on the open market.

The State Auditor’s office, headed by Democrat Beth Wood, contracted with an outside medical research $279,457 to conduct the audit. Major findings included the $309 annual savings per patient (based on 2003 to 2012 data), as well as what were seen as improved health outcomes, a 20 percent increase in physician’s services (which is believed to prevent more expensive future care) and a 25 percent drop in inpatient admissions. The researcher saw no statistical difference in emergency room visits.

Click here to read the entire audit.

CCNC works by pairing Medicaid patients with a primary care doctor or office, which for an additional fee then helps manage individual patient’s care with the intention of cutting down on unneeded medical expenses and providing better care.

CCNC’s future in the state is murky, with the Republican-led House and Senate chambers currently trying to decide how the $14 billion Medicaid program should be managed, and whether it should be privatized. House members have been more open to keeping CCNC, while the Senate has proposed doing away with the state’s contract with CCNC and instead turning to managed-care health companies to take over the bulk of the state’s Medicaid cases.

There’s also been considerable turnover in CCNC itself. Several top leaders left the non-profit entity recently, for what CCNC described as a “downsizing.”

NC Budget and Tax Center

After enacting huge, costly income tax cuts in recent years that largely benefited the state’s wealthiest people and biggest, most profitable corporations, pursuing more tax cuts would threaten North Carolina’s economy – and yet it appears state lawmakers are doing just that.

Questions remain about what will or won’t be in the budget the Legislature passes. What is known, though, is that the spending target agreed upon by the House and Senate is $230 million less than what the state is projected to take in over the year from tax revenue.

If that turns out to mean a tax-cut proposal, it will come in the face of strong evidence that such a strategy doesn’t deliver widespread economic benefits.  North Carolina is experiencing a very uneven economic recovery. Many people still can’t find jobs and many who are working are being paid less than what it takes to make ends meet. Tax cuts aren’t going to create the jobs North Carolina needs and they take resources away from what the state should invest in to promote real growth – quality public schools, affordable higher education, modern infrastructure, and safe and healthy communities, for example.

A continued pursuit of failed trickle-down economics policies would occur as investments in those public services and others are still below pre-recession levels and insufficient to meet growing needs.

State lawmakers are pursuing two paths to usher in more income tax cuts.

One path builds more tax cuts into the state budget. Budgets passed by both the House and the Senate lower the corporate income tax rate to 3 percent from 5 percent over the next two years. These tax cuts will result in more than $450 million less available to the state for public services over the next two years. As we’ve highlighted previously, cutting corporate income taxes won’t boost North Carolina’s economy; taxes are but a fraction of a business’s costs. Furthermore, the Senate’s budget changes how corporations apportion their income for state income tax purposes and reduces the corporate franchise tax rate. In total, tax changes included in the Senate’s budget would result in nearly $1 billion in less state revenue over the next two years.

The second path, Senate Bill 607, would amend the state constitution to arbitrarily cap the state income tax rate at 5 percent. This would reduce annual state revenue for public investments by around $1.5 billion. The result would mean more erosion of vital services and probably other tax increases – most likely the state sales tax. In combination with other proposed changes to the state constitution, this path would hamstring state lawmakers in the years ahead from meeting the priorities of North Carolinians by restricting the overall level of investment in our public schools, public colleges and universities, and other important areas.

These two paths that state lawmakers are pursuing are troublesome, particularly at a time when investing in North Carolina’s future is important to the state’s economic prospects. Consequently, the continued pursuit of trickle-down economics fails to promote broadly shared prosperity and prevents the entire state from moving forward together.