NC Budget and Tax Center, Raising the Bar 2016

Sound fiscal policy choices needed to build a stronger, more inclusive NC economy

This post concludes a series on the state budget featuring the voices of North Carolina experts on what our state needs to progress so that all North Carolinians have a fair shot to get ahead.

State lawmakers will return to Raleigh next week to convene this year’s short legislative session. One primary task for lawmakers is to revisit the state budget for the upcoming fiscal year that begins in July and make needed and desired revisions. More tax changes may also be pursued, which would have implications on what the final state budget looks like and whether spending priorities to meet growing needs can be met.

raise the bar

The desire for more income tax cuts by state leaders would build onto tax changes passed in recent years that have largely benefited the wealthiest in the state and that have significantly reduced revenue available for public investments.

A recently released BTC report highlights the tax swap that has resulted from recent tax changes. Costly income tax cuts have given tax breaks to the wealthiest and profitable corporations. Meanwhile, the sales tax has been expanded to include more goods and services, which particularly harms families and individuals that struggle to make ends meet. Consequently, this tax swap – a greater reliance on sales tax and less on income taxes – has shifted the tax responsibility to low- and middle income taxpayers and away from the well-off. Since 2013, the tax burden on low income taxpayers has increased by $30 on average while it has decreased by around $15,000 on average for millionaires.

The significant revenue loss from the tax cuts cannot be overlooked. The annual revenue loss once all tax changes are fully in place is at least $2 billion. These are dollars that otherwise would be available for the economy-boosting public investments that have been lifted up in the Raise the Bar blog series this week – investments such as reducing persistent Pre-K waiting lists, ensuring that public schools have adequate resources, making higher education more affordable, ensuring healthcare services for the elderly and poor, and helping ensure that economic growth extends to rural and distressed communities across the state.

The results are clear: Even as the tax swap delivers big tax breaks to the wealthy, it reduces resources available for public investments that build a strong economy. North Carolinians should be alarmed by state leaders’ short-sighted focus on tax cuts and their desire to continue North Carolina down this path. Sound fiscal policy choices are needed to build a stronger, more inclusive economy and a brighter future that all Tar Heels want and deserve. It is this vision of building an economy that works for everyone that should guide lawmakers’ decisions during the upcoming legislative session.

NC Budget and Tax Center, Raising the Bar 2016

North Carolina’s older population and the need for state action growing

This post is part of a series on the state budget featuring the voices of North Carolina experts on what our state needs to progress so that all North Carolinians have a fair shot to get ahead.

By Mary Bethel – President, NC Coalition on Aging

raise the barThe Baby Boomers Are Here!  North Carolina is experiencing a significant increase in our older population as the state’s 2.4 million baby boomers (those born between 1946 and 1964) have begun to enter the retirement age.  Today, 1 in 5 – over 2 million people – are age 60 and over and there are 170,000 people age 85+ living in the state.  By 2018, the state as a whole, and 90 of the 100 counties, will have more population 60 and over than age 0-17.

With this growth in the number of older adults comes an increased need for legislative action to help those who need assistance.  Many aging advocacy groups in the state, including the NC Coalition on Aging, a statewide alliance composed of agencies; organizations, groups and supporting individuals concerned with issues impacting older North Carolinians (www.nccoalitiononaging.org); are asking the General Assembly to appropriate funding for two priority areas. Read more

NC Budget and Tax Center, Raising the Bar 2016

Promoting opportunity for children and their families in the state budget

This post is part of a series on the state budget featuring the voices of North Carolina experts on what our state needs to progress so that all North Carolinians have a fair shot to get ahead. 

By Michelle raise the barHughes, Executive Director, NC Child

What do North Carolina’s children need in order to get a solid start in life, and what priority should children have in the annual legislative competition for state funds? Child advocates like us are pressed every year to tell the legislature what we think is most important for our state’s 2.3 million children to grow into thriving, successful adults.  And every year we make the case for a range of effective, research-based policy solutions in health care, early childhood education, child care and child safety.

But after 30 years of working to make North Carolina the best place to be a child and to raise a child, we can say this without reservation: our children will most surely thrive when we support the families and the communities in which they live.   We cannot separate the fate of our state’s children from the reality of their parents’ lives, the condition of their neighborhoods, and the opportunities available or missing in their communities.

Unfortunately, many children in North Carolina are growing up in families living on the brink and in communities facing deep and persistent barriers to success and prosperity.  These families live in small towns and rural areas, but also in suburbs and city neighborhoods. They are striving to make ends meet, but low-wage jobs with few benefits are often the only ones available to them. Read more

NC Budget and Tax Center, Raising the Bar 2016

Reinvestment should be top priority for lawmakers during the Short Session

This blog post raise the baris the first post in our week-long 2016 Raise the Bar blog series that will recap the state of the North Carolina budget and make the case for reinvestment so that all North Carolinians have a fair shot to get ahead.

Next Tuesday, state lawmakers will return to Jones Street for the start of the Short Session. The primary focus of the session will be to make adjustments to the second year of the two-year budget that lawmakers approved last year. That means that lawmakers have an opportunity to strengthen economic security for all North Carolinians and help build a more robust economic recovery.

Seizing that opportunity, however, will require lawmakers to refocus on evidence-based fiscal policies that are smart, targeted, and equitable—rather than policies that lead them further down the tax-cut and tax-swap paths that they’ve pursued. As a reminder, state lawmakers once again chose last year to cut taxes that primarily benefit the wealthy and profitable corporations, while also expanding the sales tax to new services like maintenance, repair, and installation, effectively further shifting the tax load onto middle- and low-income taxpayers.

Those tax decisions are closing the doors of opportunity for some North Carolinians and won’t fix what is wrong with our state’s economy (like too few jobs and a boom in low-wage work). The tax plans since 2013 will reduce revenue by more than $2 billion annually when fully implemented, cutting off pathways to greater economic success like early childhood development, public schools, affordable health care, supports for older adults, and community economic development while also failing to boost the economy or create the jobs North Carolina needs.

Below are four key points about the current state budget that would be good for lawmakers to reflect upon as they head into the new budget season. Read more

Commentary

HB2 threatens half billion dollar hit to NC economy

As the headlines pile up announcing business opposition to the pro-discrimination legislation HB2, it’s becoming increasingly clear that the law is placing North Carolina’s economy in jeopardy.

In fact, a recent report from the Center for American Progress finds that HB2 threatens $567 million in economic activity from just the companies that have announced they are canceling or reconsidering investment in the state, the tourism dollars lost due to canceled conventions, and entertainers like Bruce Springsteen and Ringo Starr canceling events in North Carolina.

Even more troubling, this total doesn’t include all the potential economic development projects that won’t happen but no one hears about as companies quietly write North Carolina off their list of possible locations for expansion. And it doesn’t include the $20 billion in federal aid that could be lost if it turns out that HB2 runs afoul of federal anti-discrimination laws.

According to the report, here’s a list of all the losses and pending losses to the state’s economy happening as a direct result of HB2:

Read more