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Posted by : Wednesday, April 9, 2014 4 Comments In NC Budget and Tax Center

Some underling and troubling trends are revealed in the Fiscal Research Division’s newly released third Quarterly General Fund Revenue Report, which provides an assessment of revenue for the state. Not much has changed since the Division’s second quarterly report. Both reports foreshadow some of the particular challenges of the new tax plan—namely the fact that tax rate reductions for profitable corporations will be big revenue losers for the state.

On net, the General Fund was $12.1 million above the $14.5 billion revenue target for the first-three quarters of the current fiscal year that ends in June 2014. This marks a reduction from the $83 million point-in-time “surplus” that accrued by the end of the second quarter. The gap could shrink even further by the end of the month depending on any volatility in revenue collections post-tax season—a factor dubbed as the “April Surprise.”

Revenue collections were ahead of target by the end of the third quarter largely due to stronger-than-expected performances by the sales tax and the corporate income tax on net. Read More

Posted by : Friday, March 28, 2014 4 Comments In NC Budget and Tax Center

What’s the deal in Kansas these days? That’s a question Governor McCrory and North Carolina’s state leaders should be asking themselves.

After passing huge tax cuts in recent years, the subsequent unimpressive economic performance and continued disinvestment in core public investments in Kansas serve as a cautionary tale for North Carolina.

A recently released report by the Center on Budget and Policy Priorities (CBPP) highlights how Kansas’ economic performance has failed to live up to the promises made by Governor Brownback and his legislative allies. Kansas passed huge income tax cuts in 2012 that reduced annual revenue for public investments by more than $800 million for FY 2014. Proponents claimed the tax cuts would boost the state’s economy.

Last year North Carolina followed Kansas’ lead when state leaders passed and Governor McCrory signed into law a tax plan that includes huge income tax rate cuts and reduces annual revenue by more than $650 million once all tax changes take effect. Here too, the governor and proponents claimed that cutting taxes will boost North Carolina’s economy.

So how is Kansas faring these days?

Kansas hasn’t experienced anything close to an economic surge in the wake of the huge tax cuts. Massive revenue loss has meant continued state funding cuts to core public investments – public schools, colleges and universities, and healthcare services, for example. Read More

Posted by : Wednesday, February 5, 2014 7 Comments In NC Budget and Tax Center, Uncategorized

When it comes to educating our children, the public is pretty clear in understanding you get what you pay for.

In a recent poll released by High Point University, 72% of respondents said they would favor a tax increase to raise teacher pay in North Carolina to the national average. These results are similar to a Public Policy Polling survey conducted in November which revealed that 68% of North Carolinians opposed cutting funding for public schools to provide taxpayers a tax cut.

Despite North Carolinians’ willingness to pay to ensure adequate funding of our public schools so that children can be better prepared for a 21st century economy, legislators moved in the opposite direction this past legislative session. Not only were teachers, whose salaries ranked 46th in the nation in 2012, denied a pay increase this year, but the salary incentive for teachers who earn master’s degree was eliminated and additional cuts were made to professional development and recruitment programs.

The legislature further undermined the ability of public education to prepare children for their future by reducing funds available for instructional supplies and textbooks, increasing teacher to student ratios and cutting funding for teacher assistants.

Read More

Posted by : Friday, January 3, 2014 4 Comments In Uncategorized

The N.C. Education Lottery had an unusual sales pitch today, telling players that hitting it big in 2014 will mean less taxes and more winnings

In a tweet sent out this afternoon, the official state lottery Twitter account pointed out that the state’s new flat 5.8 percent income tax, which eliminated a progressive tax structure where the poorest pay a lower percentage of income taxes than those with higher incomes, is a bonus for lottery winners.

lotterytweet

The tweet links to two news releases put out by the state-run lottery that showcases how a Rocky Mount man with a $1 million Powerball ticket and a firefighter in the western part of the state are paying $7,000 to $12,000 less in income taxes in 2014 than they would have if they won in 2013.

Read More

Posted by : Monday, September 9, 2013 7 Comments In NC Budget and Tax Center

Disparities in economic opportunity for North Carolina’s workers have persisted for generations, including the last few decades when the state’s economy transformed away from manufacturing employment and toward service employment. These disparities have grown since the Great Recession, according to a newly released State of Working North Carolina report. Although the downturn’s economic pain was pervasive, it was not spread evenly throughout the state. The new report shows that some communities and regions were harder hit than others and continue to struggle with high unemployment and few opportunities for growth.

There are multiple storylines to this “tale of two economies” reality. One is the rural and urban divide. Read More

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