2017 Fiscal Year State Budget, NC Budget and Tax Center

Initial review of Governor’s higher ed budgets that fail to ensure affordable higher education

Here are key highlights from Gov. McCrory’s proposed higher education budgets.

Community College System

Consists of 58 community colleges across the state serving all of North Carolina’s 100 counties.

The community college budget follows a larger trend of failing to boost public investment in the state’s education pipeline, with the exception of some additional funding for one-time bonuses, equipment upgrades, and a locally-driven initiative to promote post-secondary success. After years of steady increases in tuition, the proposed budget does not reverse this trend, failing to make post-secondary training and education at community colleges more affordable.

  • Funding provided for discretionary one-time bonuses, maximum $3,000, to selected state employees at NC community colleges ($29.4 million).
  • Savings recognized due to decline in enrollment ($26.2 million).
  • Funding provided for locally-determined support services to help ensure students earn a credential or degree ($16.6 million).
  • One-time funding provided to upgrade and maintain instructional equipment at NC community colleges ($7.5 million).

UNC System

Consists of 16 four-year public universities across the state serving more than 220,000 students, as well as the NC School of Science and Mathematics. Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

Initial review of Governor’s K-12 education budget: Falls short of ensuring public schools have adequate resources

Gov. McCrory’s proposed revised budget for K-12 education for the upcoming fiscal year maintains the status quo for public investments in public schools. Under the Governor’s budget, state funding per student remains well below pre-recession spending when adjusted for inflation and schools will continue to be hurting for resources.*

Teacher pay is just one thing on a long list that needs to be addressed so that public schools are able to deliver a top-notch education to all students. And while additional funding for pay increases for educators is much welcomed, this increase is largely delivered as one-time bonuses. As the only major component of the Governor’s education budget that is possible under the tax-cut constrained reality, it leaves far more needed to ensure every child’s access to a quality education.

Consequently, the Governor’s proposed budget once again challenges schools to do more with fewer resources and support despite heightened expectations regarding student achievement.

Here are key items in the K-12 education budget. Read more

NC Budget and Tax Center

Childless jobless workers will face additional barriers to put food on the table

The September local employment numbers highlight the persistent jobs challenge that North Carolina faces. At a time when local economies across North Carolina continue to experience the realities of an uneven recovery that has yet to return to pre-recession conditions, Governor McCrory will likely sign a bill today that will further negatively impact our state’s workers and families.

The expected signing of HB 318 means that the time limit on food assistance will go into effect  for 77 counties that qualify for a waiver due to weak labor market conditions. This could result in up to 105,000 childless North Carolinians losing food assistance, driving up demand at local pantries and holding back consumer spending in local groceries.

The latest labor market data show just how damaging the timing of HB 318 could be. All but one metropolitan area and the overwhelming majority of North Carolina’s 100 counties still have more people looking for work than before the economic collapse in 2007. This trend highlights the persistent jobs challenge North Carolina faces – more people desire to work than are jobs available to meet this demand for employment.

“There is a persistent narrative when assessing local labor market conditions in North Carolina. The recovery has been uneven and is bypassing a lot of people who live in both rural and urban areas,” said Cedric Johnson, Policy Analyst at the Budget & Tax Center, a project of the NC Justice Center. “In light of the labor market news, it is still clear that there are too few jobs for all who want to work in North Carolina.  Moreover, there are also too few skills training opportunities for those who seek retraining for new careers.”

Key findings from the county data include:

  • Only 22 of North Carolina’s 100 counties have reached the 5 percent threshold for unemployment that many economists view as full employment.
  • The number of people looking for work is still higher in 81 counties than it was before the recession.
  • 65 of North Carolina’s 100 counties have not gotten back to pre-recession levels of employment.
  • 16 counties actually lost jobs over the last year.

Key findings from the metropolitan data include:

  • 8 of North Carolina’s 15 metropolitan areas have added jobs since the start of the Great Recession. However, the number of people looking for work has grown much faster in every metropolitan area except one (Hickory-Lenoir-Morganton) during that period.
  • In 14 of North Carolina’s 15 metropolitan areas, the increase in the number of people looking for work is more than 20 percent higher than pre-recession levels.
  • Hickory-Lenoir-Morganton is the only metro area to experience a decline in labor force (2.8 percent), number of employed workers (2.8), and number of workers looking for work (3 percent) since the start of the Great Recession.
Commentary

It’s time for a plan to cover 500,000 North Carolinians

Now that the Supreme Court has ruled — again — that the structure of the Affordable Care Act is constitutional, it is time to move forward with making the law work better in our state.

The first, and most important, step is accepting federal funds to extend the benefits of affordable health insurance coverage to 500,000 more people in our state. Gov. McCrory said last year that his staff was assembling options to expand coverage and that he would make an announcement about his recommendation after the Supreme Court ruled in King v. Burwell. The ruling has arrived.

When asked about expansion today McCrory was sort of squishy and said he wants a North Carolina plan. We all do. But first we need the Governor to draft and release such a plan. Conservative Governors in Ohio, Indiana, Utah, Michigan, Tennessee and other states have either closed the coverage gap or assembled a strategy to accomplish a coverage expansion. There’s no reason our Governor can’t do the same.

Legislators are still critical of expansion. Sen. Ralph Hise says that he doesn’t think the federal government will be flexible enough to allow a state option. His wish list includes wanting to expand using private insurance and imposing co-pays on recipients above the federal poverty level.

Of course, the federal government has approved even more conservative measures than Hise mentions. Several states including Arkansas, Iowa, and Michigan do use private insurance to expand coverage. Some states are charging co-pays and premiums even on enrollees earning less than the federal poverty level. The federal government has shown a degree of flexibility that makes many advocates uncomfortable. The idea that our hands are tied is, to quote Justice Scalia, pure applesauce.

Recently released data from the National Health Interview Survey show the dramatic impact of expanding coverage. In Kentucky the adult uninsured rate dropped from 24.1 percent in 2013 to 15.6 percent in 2014. In Arkansas the rate went from 27.5 percent to 15.6 percent. And, most stunningly, in West Virginia the adult uninsured rate went from 28.8 percent in 2013 to 12.2 percent in 2014. These numbers reflect only the first year of expansion and states nearly cut their adult uninsured rates in half. In North Carolina the adult uninsured rate moved from 25.6 percent to 22.5 percent.

A majority of states are expanding coverage while reforming their Medicaid programs. More states will join their ranks now the Supreme Court has ruled that the Affordable Care Act is here to stay. The Governor must show leadership on this issue and ensure that all of our citizens have access to comprehensive, affordable health insurance.

NC Budget and Tax Center

What’s going on in Kansas? Beware North Carolina!

What’s the deal in Kansas these days? That’s a question Governor McCrory and North Carolina’s state leaders should be asking themselves.

After passing huge tax cuts in recent years, the subsequent unimpressive economic performance and continued disinvestment in core public investments in Kansas serve as a cautionary tale for North Carolina.

A recently released report by the Center on Budget and Policy Priorities (CBPP) highlights how Kansas’ economic performance has failed to live up to the promises made by Governor Brownback and his legislative allies. Kansas passed huge income tax cuts in 2012 that reduced annual revenue for public investments by more than $800 million for FY 2014. Proponents claimed the tax cuts would boost the state’s economy.

Last year North Carolina followed Kansas’ lead when state leaders passed and Governor McCrory signed into law a tax plan that includes huge income tax rate cuts and reduces annual revenue by more than $650 million once all tax changes take effect. Here too, the governor and proponents claimed that cutting taxes will boost North Carolina’s economy.

So how is Kansas faring these days?

Kansas hasn’t experienced anything close to an economic surge in the wake of the huge tax cuts. Massive revenue loss has meant continued state funding cuts to core public investments – public schools, colleges and universities, and healthcare services, for example. Read more