NC Budget and Tax Center

A report released yesterday by ThinkNC First argues that decision makers in Raleigh have walked away from many of the programs that helped to build a middle-class in North Carolina. Authors William Lester and Nichola Lowe of the University of North Carolina review data showing that middle-income jobs have become much harder to find over the last decade. The report ties this disturbing trend to recent policy decisions to underfund state programs that foster industries that create livable wages and ensure that all North Carolinians can access those jobs. The report makes a strong case that state leaders should heed our history and remember how North Carolina became an economic powerhouse in the Southeast in the first place.

The central problem documented in the report is becoming increasingly difficult to ignore. For the second half of the 20th century, North Carolina’s economy generated strong employment growth up a down the wage scale. Since the start of the Great Recession however, most of the job growth has been in either very high or very low paying industries. The labor market hollowed out, as many industries, particularly in manufacturing, saw employment decline. We here are the Budget and Tax Center have been watching this same trend, and its not pretty.

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The Department of Public Instruction’s budget chief told members of the State Board of Education Thursday that the number one issue local superintendents are wrestling with as they figure out how to fund their schools for the upcoming year is how to handle their teacher assistants.

“It is a very big problem for school districts to make a decision on how to start the school year,” said DPI’s Chief of Financial Operations Philip Price, who explained that any reductions to teacher assistants that result from final budget negotiations completed by the House and Senate in the coming weeks will be retroactive to July 1 and will leave school districts in a very tricky situation.

Budget writers in the Senate have signaled their intention to cut funding for teacher assistants significantly, eliminating more than 8,500 TA jobs over the next two year biennial budget period. The House, on the other hand, wishes to keep funding in place for TAs, setting up a for a fight that may end up being very similar to the one that took place last year.

Teacher assistants have been a target for budget writers for several years now. More than 7,000 teacher assistant jobs have been cut by lawmakers since 2009.

The General Assembly appears to be on track to head into the fall with its budget negotiations, leaving local school districts without a clear plan for how to fund classrooms and hire — or fire — teacher assistants and other classroom personnel.

The dollar difference between the House and Senate’s plans for funding TAs amounts to $195.6 million, Price told State Board of Ed members Thursday.

“Local school districts like Wake County have already started school in their year round tracks and so they’ve had to make some decisions related to how to address the teacher assistants,” said Price.

Winston-Salem/Forsyth schools have already laid off 30 TAs and warn that more might be coming.

“We still have our fingers crossed that the compromise (budget) will not cut deeper than 110 positions,” Crutchfield said of the 500 TAs that Winston Salem/Forsyth schools employes. Crutchfield, the district’s budget director, said the district would have to lay people off after they were already planning to report to work in August, according to the Winston Salem Journal.

The overall difference in the House and Senate’s budget plan for public schools, said Price, amounts to $342.6 million.

“That’s a major difference in money,” said Price. “[The General Assembly] has a pretty challenging job to do.”

In addition to TAs, Price noted the House and Senate’s other disagreements, which include how to handle driver’s education (the House restores funding, the Senate does not and eliminates the requirement for it in order to get a driver’s license), teacher salaries (House gives 4 percent raises across the board while the Senate focuses pay bumps on early career teachers) and whether or not to reduce classroom sizes by including more money to hire additional teachers (a Senate proposal).

“It’s going to be a rather lengthy, I’m afraid, in my humble opinion, discussion between the chambers and it will kick off pretty rapidly, I would imagine, next week,” said Price.

Lawmakers return to Raleigh on Monday after deciding to take a week long vacation, despite having missed their June 30 budget deadline.

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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2015 Fiscal Year State Budget, NC Budget and Tax Center, Women and the Economy

One of the most pressing concerns for any working family with children in North Carolina is to figure out a child care arrangement for children that allows parents to work and provide for their family, and allows children to learn and grow in a safe and stimulating setting when not in parental care. This is especially challenging because of the high cost of child care, as noted in these recently released state fact sheets by Child Care Aware of America. There are a few options available for families who earn low to moderate wages including the child care subsidy program which provides financial assistance to working families who need help paying for child care. Unfortunately this critical building block that makes life work for working families has been crumbling due to recent policy decisions by North Carolina lawmakers.

In our newest edition of Prosperity Watch, we feature a report released this month by NC Child detailing the impact made by child care subsidy policy changes passed by North Carolina lawmakers last year. These changes amounted to the loss of financial assistance for thousands of North Carolina families, including reducing income eligibility levels to qualify for the program, elimination of prorated fees for part-time child care (meaning many families will no longer be able to afford care), as well as counting income of a non-parent relative caregiver like a grandparent against the child’s eligibility for subsidies.

The map below provides a county by county breakdown of the more than 6,000 children who have lost or will lose access to child care subsidies from the change to the income eligibility provision alone.

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lotteryWhat a difference a year makes. Last session the state House passed a budget that relied on increased lottery advertising to raise money for a pay raise for teachers.

Senate leaders rightly panned the idea that soon fell apart after news that lottery officials had told House leaders that their revenue projections were unrealistic before the House budget passed.

But now it seems Senate leaders have reconsidered their opposition to increasing lottery advertising to raise more money from people at the bottom of the economic ladder.

Mark Binker with WRAL reports that two of the numerous policy provisions stuffed into the massive 504-page Senate budget would allow lottery officials to increase their advertising budget and authorize an online state lottery game, which is the last thing we need.

The two provisions combined are projected to raise more than $50 million a year, much of it from the poorest areas in North Carolina from families who can least afford to play.

The Senate was right last year. Raising money from the predatory lottery to pay for state investments was wrong.

nc-lotteryIt still is. We need an honest, fair, stable, and adequate revenue system, not one that increasingly relies on convincing vulnerable people to throw their money way on a one in a 100 million chance of striking it rich.