jobs « The Progressive Pulse

Tax Cuts a Poor Strategy for Growth

March 21, 2013 at 11:12 amCategory:NC Budget and Tax Center

Some members of General Assembly have repeatedly claimed that elimination or deep cuts to personal income tax rates, especially on high-wealth individuals can solve our high unemployment and sluggish economic growth.

New research from the Center on Budget and Policy Priorities released this morning finds that pursuit of such policies are not worth the risk.

After comparing the economic performance of those states that pursued deep cuts in the 1990s and 2000s and those that did not, it turns out high tax cut states have grown far slower. Read the full report for details.

Prosperity Watch: State job creation lags nation, but gap beginning to close

March 21, 2013 at 8:30 amCategory:NC Budget and Tax Center

by Allan Freyer

Earlier this week, the N.C. Division of Employment Security released the latest jobs numbers for January, and unsurprisingly, North Carolina’s labor market is continuing to struggle. As the latest issue of Prosperity Watch makes clear, the state’s employment recovery is still lagging the national average, and despite slowly beginning to close this gap, much work remains to provide adequate employment opportunities for North Carolina’s workers. See the latest Prosperity Watch for details.

Budget Preview: NER and The Important Role Played by State-funded Nonprofits in Economic Development

March 18, 2013 at 9:30 amCategory:NC Budget and Tax Center

by Allan Freyer

With the imminent release of the Governor’s budget—possibly as soon as later today—this is the last in a series of posts looking at key issues ahead in the FY 2013-15 North Carolina state budget. This post examines the Natural and Economic Resources (NER) area of the budget, the functional area that provides spending for the Department of Environment and Natural Resources (DENR), Department of Agriculture, Department of Labor, the Clean Water Management Trust Fund, and a variety of programs associated with the state’s economic development efforts. These include the Department of Commerce, the N.C. Rural Center, the N.C. Biotech Center, and about a dozen nonprofit entities that are funded as part of the Commerce-State Aid portion of the budget.

While the main story about NER in FY 2011-13 involved the dismantling of DENR’s regulatory functions and overall 49% cut in funding to the total budget area, the story for this biennium will likely involve the state pass-through funding from Commerce-State Aid to the various nonprofits engaged in economic development efforts on behalf of the state.

Three Questions About the MetLife Deal That Need Answers

March 8, 2013 at 4:34 pmCategory:NC Budget and Tax Center

by Allan Freyer

The big news on the jobs front the past couple days has been the announcement by Governor Pat McCrory that insurance giant MetLife has agreed to make a new $126 million investment in two North Carolina locations, resulting in the creation of 2,600 jobs.

While the news of any job creation is good news when the state’s unemployment rate is over 9 percent, the price tag attached to these jobs is causing a bit of sticker shock. The deal involves providing $87 million in Job Development Investment Grant (JDIG) incentives to MetLife over the next 12 years—the largest discretionary incentive package North Carolina has ever offered from this program.

Given North Carolina’s tight state budget and persistently high unemployment, the public needs to know as much as possible about the real costs and benefits of the deal—and whether it’s really worth $87 million in taxpayer dollars, or about $33,000 per job.

To that end, here are three questions about the MetLife deal that need answers:

Question #1—How many jobs will go to North Carolina residents? While MetLife has promised to create 2,600 jobs, how many of these employment opportunities will be open to people already living in North Carolina, and how many will be filled by moving the company’s current employees from other locations in California and New England? At a cost of $33,000 per job, it’s hard to understand the justification behind simply providing taxpayer subsidies to cover the relocation expenses of out-of-state residents, unless the overwhelming majority of these new jobs can be filled with North Carolina residents.

States with Personal Income Taxes Still Outperforming States without Such a Tax

March 7, 2013 at 11:17 amCategory:NC Budget and Tax Center

by Cedric Johnson

A 2013 report released by the Institute on Taxation and Economic Policy (ITEP) updates analysis showing that states that levy a personal income tax are experiencing conditions on par with, if not better than, states with no personal income tax. One of the central claims from proponents of cutting or repealing the state personal income tax is that states without a personal income tax outperform states with such a tax. The ITEP report highlights that this claim is not true.