Tag: budget

Top 5 pressure points in the state budget

March 1, 2013 at 11:16 amCategory:NC Budget and Tax Center

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North Carolina legislators are in the months-long process of developing the two-year state budget that covers July 1, 2013 through June 30, 2015. In light of the state’s murky economic outlook, it is important for legislators to consider the major drivers that will impact General Fund availability. There are many pressure points in the state but the biggest 5 include the following:

  1. Schoolchildren. As the single largest appropriations-supported category in the state budget, the needs of K-12 public schools are the most significant driver of the state budget. The K-12 budget has suffered through massive cuts over the last several years, and state investment in public education as a share of North Carolina’s economy is lower than before the Great Recession. This comes at a time of increasing demand: from school year 2008 to 2012, the student population grew by nearly 20,000, or 1.5 percent. The growing number of children enrolled in public schools only places additional budget pressure on an already stressed educational system. Read More…

Funding Cuts to Public Education Threaten State’s Leadership Position Among Southern States

February 27, 2013 at 3:25 pmCategory:Falling Behind in NC | NC Budget and Tax Center

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This week has been deemed Education Week by legislative leaders, who have invited superintendents, principals and teachers from across the state to Raleigh to discuss public education issues. As education leaders and teachers share their thoughts and concerns regarding public education, funding has been a key part of that conversation.

With consistent improvement in proficiency rates, National Assessment of Educational Progress (NAEP) scores, and graduation rates over the past 20 years, North Carolina has long been recognized for its commitment to public education – both K-12 education and higher education. However, significant cuts made to K-12 and higher education in recent years threaten to erode the leadership position the state has achieved among southern states. As lawmakers work to craft and approve a biennial budget for FY 2014-15, investment in public education will be a central part of the budget debate.

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Report highlights that taxes and spending are not out of line in North Carolina

February 25, 2013 at 1:42 pmCategory:NC Budget and Tax Center

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A report released by the Program Evaluation Division within the NC General Assembly highlights that North Carolina ranks in the middle of the pack, or better, among states for various taxes and spending metrics. For FY2009-10, metrics for which North Carolina ranked in the top half of states include:

  • Per capita state expenditures (12th lowest among states);
  • Per capita state and local taxes (17th lowest among states);
  • State and local taxes as a percentage of personal income (23rd lowest among states); and
  • Per capita state taxes (24th lowest among states).

These rankings disprove the claim that state spending and taxes in North Carolina are out of line. Our state ranks in the middle of the pack or on the lower end among states. Read More…

Public Statement before the House Finance Committee, Effort to Repeal Estate Tax

February 20, 2013 at 10:24 amCategory:NC Budget and Tax Center

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Public Statement before the House Finance Committee

House Bill 101 – Repeal of Estate Tax

February 20, 2013

Thank you Mr. Chairman and members of the House Finance Committee

My name is Cedric Johnson and I serve as a public policy analyst with the NC Budget and Tax Center. Since its founding, the Budget and Tax Center has advocated for a state tax system that meets the principles of adequacy, equity and stability, and that allows the state to make adequate investments in public structures that provide the foundation for economic growth.

I stand before the committee today in opposition to House Bill 101. Repealing the estate tax will not address the problems with our tax system: that it is upside-down and inadequate to support the foundation of economic growth.  And repealing the estate tax will not improve economic outcomes.

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Finance Committee Increases Tax Load for Working Families, Cuts EITC

February 13, 2013 at 4:06 pmCategory:NC Budget and Tax Center

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This morning, the House Finance Committee voted to reduce the state Earned Income Tax Credit (EITC) provided to low-income working families across the state. More than 883,000 North Carolinians claimed the credit in 2010, which provides working families with dollars to spend in their local communities. Each year the state updates its tax code to address changes made to the federal tax code during the previous year, as North Carolina’s tax code is linked to the federal tax code.

Improvements to the federal EITC were extended as part of the fiscal cliff deal, including eliminating the marriage penalty and extending the credit to larger family sizes. In decoupling the state credit from the federal credit, the Finance Committee voted to reduce the state EITC from 5% to 4.5% of the federal credit for tax year 2013. The result is a cut of $11 million to the state credit.

The EITC helps boost the wages of low-income families and helps them pay for basic necessities. Cutting the tax credit will further challenge the ability of these families to make ends meet and minimize its ability to address the upside down nature of our state and local tax system. The House finance committee also voted to cut the Work Opportunity tax credit. However, the committee did vote to increase the amount of itemized deductions that individuals can claim, which would largely benefit high-income individuals.