Tag: state budget

House committee OKs failed idea that would dismantle North Carolina’s key investments

May 9, 2013 at 3:17 pmCategory:NC Budget and Tax Center

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Earlier this morning, members of the House Committee on Government approved the so-called Taxpayer Bill of Rights (TABOR) bill, which is a constitutional measure that would impose a crippling and arbitrary formula to determine how much we spend on key investments. TABOR would force huge, annual cuts to education, public safety, health care, and other key services that support our economy and quality of life.

TABOR is a solution in search of a problem. North Carolina already has a limit on General Fund spending tied to the projected total state personal income. This limit is tied to what North Carolinians can afford and the health of the economy, preventing expenditures from rising rapidly. But unlike TABOR, it allows North Carolina to regain ground lost during the recession so we can avoid permanent damage to our most important assets. TABOR would lock in the extremely low-levels of spending that have resulted from the Great Recession and harmed our schools, roads, and communities and hampered our ability to recover from the economic downturn. Read More…

North Carolina’s revenue forecast confirms the importance of the income tax

April 23, 2013 at 3:11 pmCategory:NC Budget and Tax Center

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The revised revenue forecast released today demonstrates how important the income tax is to our state’s ability to make investments that boost our economy. As legislators begin building the next state budget, they should protect the income tax, not scale it back or eliminate it as some have proposed.

The revenue forecast indicates that tax collections since the beginning of 2013 are on target to pay for critical services included in the Fiscal Year 2012-13 budget, thanks to the revenue generated by the personal income tax. The personal income tax has been the most consistent source of revenue to pay for education, transportation, and public safety in North Carolina, and recovered quickly after the Great Recession, according to the report released today by the non-partisan Fiscal Research Division.

Sales taxes have not rebounded nearly as well because consumer demand continues to be weighed down by economic concerns, including the state’s high unemployment rate. Read More…

Local School Systems Face Challenging Budget Environments for Upcoming School Year

April 16, 2013 at 9:07 amCategory:NC Budget and Tax Center

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As local school boards begin to plan K-12 budgets for the coming school year, they continue to feel the squeeze from a still-fragile economy and continued cuts in state support for public education. Since FY2009, state support for K-12 education has been cut by more than $1.3 billion and Governor McCrory’s proposed budget for FY2014 continues this trend with $85 million in cuts to K-12 education.

The budgeting environment will likely be even more challenging for the upcoming school year with the expiration of one-time federal funding. North Carolina received $297 million in federal dollars for K-12 education (“Ed Jobs” funding) as part of the American Recovery and Reinvestment Act approved by Congress in 2010. All local school systems received Ed Jobs funding, which was used to retain existing employees, recall or rehire former employees and to hire new employees. Local school systems were required to spend all Ed Jobs funds by October 2012 and no additional funding will be available for the upcoming school year. Read More…

Could McCrory’s budget adequately cope with sequestration?

April 13, 2013 at 11:07 amCategory:NC Budget and Tax Center

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It has been a few weeks since Governor McCrory released his budget proposal for the biennium that runs from July 2013 to June 2015. His proposal has received a lot of praise for building up the state’s various savings reserves, including the Rainy Day Fund, the Medicaid Risk Reserve, and the Repair and Renovations Fund.

What has been less widely scrutinized is whether the reserves in his proposal would be sufficient to cope with the first and potentially second rounds of damaging sequestration cuts to defense and non-defense programs. Read More…

Governor’s budget wipes out funding for economic development programs in distressed, minority communities

April 11, 2013 at 8:30 amCategory:NC Budget and Tax Center

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Like all budgets, Governor Pat McCrory’s proposed spending plan for FY2013-2015 is based on a set of ideas about how the world works—what spurs economic growth, what creates jobs, and the most effective ways of using state government to achieve these goals.  Unfortunately, his proposal for economic development represents quite a few bad ideas, including the sharp reduction in spending for economic development nonprofits that receive state funding through the Commerce-State Aid portion of the budget.  These nonprofits provide vital economic development resources for historically disadvantaged and persistently distressed communities and minority populations. 

At the same time, he proposes boosting spending on industrial recruitment and other traditional economic development activities that will likely bypass the communities benefitting from the work of these nonprofits, if any meaningful job creation or economic growth is generated at all.  Read More…