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NC Budget and Tax Center

At a time when an increasing number of jobs in the state are expected to require some level of postsecondary training, North Carolina families and students have to shoulder more and more of the cost of a college education.

A report released today by the Center on Budget and Policy Priorities highlights that state spending per student for higher education in North Carolina is 25 percent below pre-recession levels when adjusted for inflation. Meanwhile, average tuition at North Carolina’s public, four-year colleges increased by more than 34 percent during this time period.

Some of the outcomes from these budget cuts have been well-documented on North Carolina’s campuses. For example, in the 2014 academic year, state funding cuts led NC State to eliminate 187 full-time equivalent positions and 27 positions from its library system, the report highlights. UNC-Chapel Hill has eliminated 493 positions, cut 16,000 course seats, increased class sizes, cut four of its seven centrally supported computer labs, and eliminated two distance education centers. Read More

NC Budget and Tax Center

Some underling and troubling trends are revealed in the Fiscal Research Division’s newly released third Quarterly General Fund Revenue Report, which provides an assessment of revenue for the state. Not much has changed since the Division’s second quarterly report. Both reports foreshadow some of the particular challenges of the new tax plan—namely the fact that tax rate reductions for profitable corporations will be big revenue losers for the state.

On net, the General Fund was $12.1 million above the $14.5 billion revenue target for the first-three quarters of the current fiscal year that ends in June 2014. This marks a reduction from the $83 million point-in-time “surplus” that accrued by the end of the second quarter. The gap could shrink even further by the end of the month depending on any volatility in revenue collections post-tax season—a factor dubbed as the “April Surprise.”

Revenue collections were ahead of target by the end of the third quarter largely due to stronger-than-expected performances by the sales tax and the corporate income tax on net. Read More

NC Budget and Tax Center

The second Quarterly General Fund Revenue Report from the Fiscal Research Division of the NC General Assembly reveals some underlying and troubling trends in the economy. It also foreshadows some of the particular challenges of the new tax plan—namely the tax rate reductions for profitable corporations.

On net, the General Fund was $83.5 million above the $10.02 billion revenue target for the first-half of the current fiscal year that ends in June. Revenue collections were ahead of target largely due to a “stronger-than-expected” performance by the corporate income tax. As the economy has slowly improved, corporate profits have been on an upward trend. Collections from the corporate income tax were ahead of target by nearly $90 million.

The new tax plan, however, diminishes the ability of corporate income tax collections to contribute to public investments and support revenue recovery after a downturn in the future. Read More

NC Budget and Tax Center

Legislators penned a state budget that puts North Carolina on a path to mediocrity. It finances tax cuts for millionaires and corporations with deep service cuts to programs that North Carolinians need and value. As such, this budget fails to catch up—let alone keep up—with the needs of children, working families, and communities.

Building a strong economy means building a workforce that is ready to tackle 21st Century challenges and able to meet the needs of competitive businesses—which requires adequate investments in education. Yet, the two-year budget falls short by nearly a half a billion dollars over what’s needed to meet the needs of a growing student population. This gap will result in fewer teachers and assistants in more crowded classrooms, stagnate wages for low-paid teachers, and ever-increasing tuition rates for students and their families.

Failing to adequately invest in the engines of a strong and enduring economy will cause long term pain in our state.

Alexandra Sirota is the Director of the North Carolina Budget and Tax Center

NC Budget and Tax Center

Earlier today, the North Carolina Senate gave final approval to the 2013-15 fiscal year budget. The House chamber is poised to follow suit later this afternoon. Throughout the budget debate, legislators have spent a considerable amount of time providing an overview of the final budget but continue to skip over how they pay for the proposal. This practice is not uncommon. How the state raises the billions of dollars that fuel the state budget gets relatively little scrutiny compared to the rest of the budget during the budget process.

But because the final budget includes tax cuts that will primarily benefit the rich while significantly reducing resources to pay for vital services, examining how the state will make up for $683.8 million in tax cuts over the next two years and $2.8 billion over the next five years it is more important than ever.*

Here’s what you need to know regarding how legislative leaders chose to pay for the final budget: Read More