Three must read stories from the weekend’s news paint a remarkable picture of the pocketbook changes many North Carolina families are facing these day.

The News & Observer’s David Ranii writes that many North Carolinians are in for a rude awakening as they complete their state taxes this year. Reforms enacted by the NC General Assembly and signed by Gov. Pat McCrory have shifted the state’s tax burden to many lower-income residents and senior citizens.

Here’s more from the article:

Cedric Johnson, public policy analyst for the N.C. Justice Center’s Budget and Tax Center, has a different take on the changes.

“Taxpayers making under ($67,000), which is around 80 percent of taxpayers in North Carolina, will, on average, see their taxes increase under the tax plan,” he said.

The Justice Center’s analysis encompasses both income tax and sales tax. In conjunction with the overhaul of the income tax, the state sales tax was expanded beginning last year. Added to the sales tax list was, among other things, service contracts for appliances and cars and a broad range of admissions charges, including movies and sporting events.

The working poor in particular are taking it on the chin because of the elimination of the earned income tax credit, which was designed to help them make ends meet, Johnson said.

Read Ranii’s full piece here.

Across-the-board raises fade for state workers

The Associated Press’ weekender details how the McCrory administration is hoping to move away from the routine budgetary practice of across-the-board pay raises for state employees. Gary Robertson explains:

McCrory’s two-year spending plan offers neither all public school teachers nor rank-and-file state employees across-the-board raises. Rather, the governor emphasizes improving pay for certain teachers and targeting state employees in hard-to-fill or dangerous law enforcement positions.

The lack of across-the-board raises partly reflects the uncertainty of tax collections, which have grown year-to-year but have fallen short of initial forecasts in a slow-recovering economy. The GOP-led General Assembly might offer across-the-board raises if revenues surge.

But McCrory suggested last week his administration is moving away from the expectation of raises for everyone every year.

For more on how Governor McCrory wants to handle pay raises moving forward click below:

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Homeownership rates decline

The final story comes from the Carolina Population Center at UNC-Chapel Hill.

Rebecca Tippett, Director of Carolina Demography, writes that homeownership rates in North Carolina have hit the lowest rate ever:

North Carolina homeownership hit a high of 73.6% in 1981, then declined slightly before rising again and holding steady at the low 70s before 2005. After 2005, homeownership rates declined steadily. North Carolina’s homeownership rate was 66.5% in 2014, the lowest it has been at any point.

homeownership rates_UNC Demography

(Hat tip Seth Effron)


State Rep. Nelson Dollar said he anticipates the state will be able to patch the $445 million shortfall for next year and use money from budget cuts for modest teacher and state employee salary raises.

State Rep. Nelson Dollar

State Rep. Nelson Dollar

“The question is will we be able to pay teachers and state employees or have increase, modest though they might be, and… keep on track with raising beginning teacher pay,” Dollar said. “The answer is yes.”

Dollar, a Wake County Republican and chief House budget writer, made his comments Monday at a reporters’ roundtable held in downtown Raleigh.

The N.C. General Assembly short session begins on Wednesday, when lawmakers arrive to begin making revisions to the upcoming budget year and deal with proposals for coal-ash cleanup, teacher and state employee raises and more.

Dollar, who said there will be cuts, or “budget reductions,”  coming, but didn’t say from where with lawmakers still waiting to see a proposed budget from Gov. Pat McCrory’s administration.

‘There will be budget reductions, yes. There will be budget reductions in the various agencies,” Dollar said. “That will flow right back into raises.”

He said he did not anticipate an across-the-board percentage cut, but expected cuts to be “much more thoughtful than that.”

Dollar also said:

  • The Medicaid shortfall may be lower than the estimated $130 million shortfall currently projected, though Dollar did say that the continuing problems with the NC TRACKS Medicaid billing system makes it difficult to project accurately.
  • No major changes to Medicaid system this year. Any reforms to the $13 billion system will come with significant legislative input, Dollar said. “We need to keep momentum moving forward on Medicaid reform,” Dollar said. “It’s going to take a while to get the system that we want.”
  • Less babysitting of the UNC system? Dollar, in mentioning that the UNC Board of Governors now consists completely of appointments by Republican legislative leaders, said he expects the General Assembly will dictate less about how the UNC should make cuts. “There’s a lot of interest in letting them do their work,” he said. He added, “A lot of what they’re doing is evaluating the whole system.”
  • No independent redistricting process  any time soon. Dollar said he doesn’t see much desire at all in the Republican-led legislature to hand over redistricting responsibilities to a non-partisan group. “I get asked that sometimes by my colleagues in the other party and I always remind them that we introduced bills and they refused to take them up or consider them,” he said. “So, it’s sort of, it is what it is. I don’t see that moving anywhere anytime soon.”
  • Interested in the Speaker job? “I would certainly be willing to serve in any capacity that the caucus would choose,” Dollar said. “But my focus right now is solely on the budget.”

N.C. Department of Health and Human Services Secretary Aldona Wos gave some very big raises to at least two members of her leadership team.

Ricky Diaz, Wos’ communications director, and Matthew McKillip, her chief policy advisor, got April pay bumps of $23,000 and $22,500, respectively.

DHHS Sec. Aldona Wos

DHHS Sec. Aldona Wos

Diaz now makes $85,000 a year and McKillip makes $87,500, according to state employee salary information maintained on databases at the Charlotte Observer and News & Observer.

Both are 24, two years out of college and came to DHHS after working for Gov. Pat McCrory’s campaign and transition teams. Diaz also worked in McCrory’s press office shortly after McCrory was sworn in.

DHHS chief policy advisor Matthew McKillip Source: LinkedIn

DHHS chief policy advisor Matthew McKillip
Source: LinkedIn

State employees received no raises in the recent budget, a decision that’s particularly rankled state teachers who spend 15 years in the classroom before reaching base salaries of $40,000. And Gov. McCrory issued a memo in March directing state agencies to stop salary increases to offset an unexpected Medicaid shortfall.

Wos has declined to take a salary and is being paid $1 a year. The Greensboro physician and her husband are big donors to Republican causes, and she served as an ambassador to Estonia under President George W. Bush.

The News & Observer reported yesterday that McKillip was promoted to the position of chief policy officer, from the DHHS senior policy advisor position he took in January.

Calls to Diaz for comments about the pay raises were not immediately returned Wednesday morning. This post will be updated if we hear back.

McKillip is now making $87,500, after an April 1 pay raise of $22,500, according to a News & Observer database of state employee salaries.  That amounts to a 35 percent increase.

McKillip’s LinkedIn profile shows he graduated from Georgetown University and worked for a year for the conservative think-tank American Enterprise Institute before coming to work on McCrory’s campaign.

Diaz, DHHS’ communications director, is another young rising star in Wos’ department. Now making $85,000, Diaz received a salary increase of 37 percent with his April pay raise of $23,000, according to state employee salary data.

Diaz worked previously for McCrory’s campaign and transition office, and has worked in the office of New Jersey Gov. Chris Christie and on the Senate campaign of U.S. Sen. Richard Burr.

Source: DHHS employee newsletter

DHHS Communications director Ricky Diaz. Source: agency newsletter

Diaz’s predecessor made $78,481 a year.

The DHHS raises are much higher than what McCrory gave his cabinet secretaries when he took office in January, which continues to stir up controversy amongst teachers and others upset with the lack of pay raises in this year’s budget.  McCrory gave several of his cabinet secretaries raises of 5 to 13 percent, the highest being $13,200.

Did we miss any other big pay raises in state government that we, and the public, should know about? Let us know. You can email reporter Sarah Ovaska at