NC Budget and Tax Center

This week marks the 50th anniversary of the Immigration and Nationality Act, which helped to make the United States into a more diverse and economically vibrant country. At the same time however, there is a bill (HB 318) sitting on Governor McCrory’s desk that would make it harder for immigrants to integrate into local communities, make police work more difficult, and hurt North Carolina’s reputation on the global stage.

The Immigration and Nationality Act of 1965 is one of the most important pieces of legislation in our nation’s history. The Act put immigrants from all countries of origin on equal footing, ending a quota system that essentially ensured most new immigrants came from Europe. This shift in policy allowed immigrants from around the world to realize the dream of joining the American experiment, and helped to fuel the last fifty years of economic growth in our country.

Graphic for Post - Immigrant Entrepreneurs Countries of Origin

Examining immigrant business owners’ countries of birth illustrates how opening immigration up to non-European counties has strengthened our economy. As the chart shows, immigrant proprietors have come to North Carolina from all over the world.

The immigrant business community is not just broad, it is deep as well. In North Carolina, immigrants make up less than 8% of the population, but own more than 20% of the main street businesses. In many communities, both rural and urban, immigrant entrepreneurs have helped to revitalize crumbling downtowns and neighborhoods. Read More

NC Budget and Tax Center

The General Assembly used a few of the last hours of the 2015 session to cut back how long unemployed North Carolinians in economically distressed counties can receive food assistance. Even though this weeks’ labor market data show that 9 out of 10 counties have more out of work people than job openings, the new rule would cut unemployed people off regardless of how hard it is to find work. The change could take food off more than 100,000 tables across North Carolina, and will pull money out of already struggling local economies, a doubly bad deal.

The one-sentence provision in the ratified bill (see section 16.a) permanently prevents the state from seeking to extend food assistance for people who can’t find work in their local economies, except in times of emergency. The federal Supplemental Nutrition Assistance Program (SNAP) allows states to temporarily waive a three-month time limit for unemployed childless adults who live in areas where few jobs are available.77 waiver counties - Updated for Blog Post

Recognizing that cutting off food aid to areas where there aren’t enough jobs hurts entire local economies, North Carolina sought this waiver for 77 of our 100 counties earlier this year. If the Governor signs this measure and SB119 into law, the ban on the waiver would go into effect in July 2016. Without the modest support of SNAP (formerly known as food stamps), between 85,000 and 105,000 North Carolinians would be subject to the three month-time limit and potentially will not be able to purchase food at their local grocery stores, depressing consumer demand further and driving use of food banks already stretched to capacity. Read More

NC Budget and Tax Center

North Carolina is the fifth hungriest state in the nation. Yet, the state Senate gave tentative approval to a bill that unnecessarily restricts food aid for childless adults who are very poor and live in areas where jobs are scarce—regardless of how hard they are looking for work.

States can temporarily suspend work-related time-limits on federal food aid for areas with sustained high levels of unemployment. North Carolina officials applied for a waiver in July for 77 of the state’s 100 counties due to a severe lack of jobs available that hampers North Carolinians’ ability to meet the work requirements (see map below). The Senate measure, however, would permanently ban the state from pursuing this option irrespective of how local economies are faring or whether employment and training opportunities actually exist.

Between 85,000 and 105,000 unemployed childless adults in North Carolina would lose food aid in 2016 because they can’t find a job if legislators prohibit the Governor’s administration from seeking a new waiver.*   Read More

NC Budget and Tax Center

State policymakers seem to think we can spare the money for another $1 billion tax cut, but also need to run up $2 billion* in new debt for core investments. The NC Senate this week takes up the Connect NC Bond Act of 2015 (HB 943), which would use debt instead of regular appropriations to pay for a range of repair and renovation projects. While now is a great time to borrow for major new investments, cutting taxes at the same time is bad news for North Carolina’s long-term fiscal house.

There are good reasons to issue debt right now. Interest rates are still pegged to the floor and low oil prices make it cheaper to complete construction projects. After seven years of below average appropriations, especially during the recovery, the list of overdue repair and upgrade projects is as long as your arm (assuming you’re on the tall side).

Simultaneously running up debt and cutting taxes is risky business. Together, the cost of tax cuts passed last week and repaying new debt will set North Carolina up for future cuts to core government functions that are already stretched beyond the breaking point. More tax cuts may also topple North Carolina’s credit rating, which already happened to states like Kansas when they cut taxes.  If lenders get even more edgy about North Carolina’s shaky fiscal house, they may demand higher interest rates in a few years’ time when the last of the bonds authorized by HB 943 would go to the credit market.

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NC Budget and Tax Center

Economic hardship persisted at high levels in the nation and North Carolina in 2014, according to new figures released today from the Census Bureau’s Current Population Survey (CPS). The 2014 national poverty rate remained flat at 14.8 percent and still well-above pre-recession levels five years into the official economic recovery. There were 46.7 million Americans living below the official federal poverty line, which was $11,670 for an individual and $23,850 for a family of four in 2014.

In the Washington Post today, Jared Bernstein—a well-respected national economist—explained that poverty is stuck high despite economic growth because the gains of economic growth are accruing mainly to top earners:

“Clearly, the improving economy and falling unemployment have yet to adequately lift the living standards of middle- and low-incomes. The census data show that almost 3 million more people were working year-round in 2014 than in 2013, yet real median earnings were unchanged for both men and women. Poverty remains higher and median incomes lower than before the recession, and this pattern — taking longer in the upturn to make up the losses from the downturn — seems dangerously embedded in the economy.

What explains this economic disconnect between growth, income and prosperity? While longer-term trends — globalization, technology, the absence of full employment, low bargaining power for many workers — have been in play for decades now, in recent years, fiscal policy has been insufficiently supportive of growth, and, in our age of increased income inequality, it takes longer for expansions to reach middle and low-income households.”

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