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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

Falling Behind in NC, NC Budget and Tax Center

This is the fourth post of a week-long blog series that seeks to uncover just how far behind North Carolina’s current services levels are compared to pre-recession levels as well as how far behind the state would fall if the House and Senate tax plans were implemented. Previous posts are available here, here, and here.

North Carolina’s revenues are slowly recovering but still deeply damaged by the recession. Regaining the ground that we have lost will be more difficult in the coming years because state lawmakers are pursing deep and lopsided tax cuts that will put at risk the critical public services that help build the engines of long-term economic growth.

There is much ground to be regained in North Carolina’s public education system, which prepares our children for the jobs of the future and participation in civic engagement.

North Carolina is investing less in public education than when the recession began. Total state funding declined by 10 percent since the 2008 fiscal year while enrollment increased by 2 percent—a modest but steady rate. This means that there are $883.1 million fewer dollars (adjusted for inflation) in state funds available today for education compared to 2008 despite having 31,000 more students to educate. Read More

NC Budget and Tax Center

The author of this post is Jelicia Diggs, an intern with the NC Budget and Tax Center

Comprehensive immigration reform will result in revenue gain for states, according to an economic and a fiscal analysis prepared by the Congressional Budget Office on the Senate Immigration reform measure last week. CBO projects that this bill will increase the labor force and expand the American economy by increasing the number of non-citizens allowed to lawfully enter the United States on both temporary and permanent bases.

Immigrants play an essential role in sustaining the economy of North Carolina, and currently comprise nearly 10 percent of the state’s work force. With the adoption of this bill, North Carolina, along with the rest of the U.S., will see economic gains. These gains will outweigh the costs anticipated from the expanded eligibility for public services. Read More