Tag: economy

North Carolina’s revenue forecast signals meager growth and murky economic outlook

February 21, 2013 at 9:48 amCategory:NC Budget and Tax Center

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Earlier this month, North Carolina legislators began the months-long process of developing the two-year state budget that covers July 1, 2013 through June 30, 2015. To kick-off this endeavor, non-partisan staffers have been providing members with an overview of current fiscal conditions as well as past legislative budget actions. Perhaps the most important presentation to date centered on the revenue forecast, which sets the stage for legislators to begin building the next state budget.

Projections from the non-partisan Fiscal Research Division indicate that General Fund revenue collections are on target as of the end of December for FY2012-13. North Carolina’s economy has made improvements over the last fiscal year but continues to lag behind the nation across several economic indicators. And although the state does not face an imminent budget crisis—largely due to a tremendously diminished baseline—the forecast implies that we are not completely out of the woods. 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.

Media conference Call Briefing: Exposing ALEC’s economic agenda in the states

February 12, 2013 at 1:58 pmCategory:NC Budget and Tax Center | Uncategorized

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Tomorrow at 1 pm the Economic Policy Institute (EPI) will host a media conference call on the economic policy agenda promoted by the American Legislative Exchange Council (ALEC). ALEC recently faced scrutiny for its promotion of the controversial “stand your ground” gun policy and strict voter identification laws. However, the group’s economic and fiscal policy agenda is less well-reported. The conference call will feature a panel of experts who have examined ALEC’s economic and fiscal policies and will share their findings on how these policies threaten investments important to economic growth.

Members of the media who would like to register for the conference call, contact Phoebe Silag or Donté Donald in the Economic Policy Institute media relations department at news@epi.org or 202.775.8810 to RSVP and for call-in information.

Government spending cuts responsible for 4th quarter economic contraction

February 1, 2013 at 10:00 amCategory:NC Budget and Tax Center

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It turns out government spending is the problem with the economy—there’s been too little of it over the last few months, according to Wednesday’s report from the U.S. Bureau of Economic Analysis (BEA).  

Gross domestic product (GDP) dropped by 0.1 percent during the 4th quarter of 2012, the first GDP contraction in three years. While this would ordinarily seem an ominous sign for the health of the nation’s economic recovery, most economists and market-watchers have argued that the contraction is temporary and likely the result of government policy, rather than signs of a long-term downturn.   

Specifically, the fourth quarter contraction is due to sharp reductions in government spending on national defense contracts coupled with a $40 billion drop in business inventories resulting from the same policy environment.

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