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NC Budget and Tax Center

When state policymakers convene next week for the 2014 legislative session the budget debate will likely be at center stage. The most recent consensus revenue forecast signal that boosting investment in critical public services will not be an option unless state policymakers take a new direction.

Today, the Budget & Tax Center released a report that highlights opportunities for legislators to begin bolstering investments in various areas of the state budget that help create pathways to the middle class, strengthen communities across the state, and alleviate the economic struggles of North Carolina families. These opportunities include boosting investments in education, workforce development initiatives, safe and healthy communities, and environmental protection.

The BTC report also highlights the significant challenge that legislators face if they choose to seize this opportunity to change the state’s direction and boost investments in North Carolina’s future. The tax plan enacted by policymakers last year reduces the amount of revenue for public investments in the years ahead. When policymakers return to Raleigh next week, they will have to address a budget gap of $335 million as a result of a forecasted revenue shortfall for the current fiscal year and a Medicaid shortfall.

The budget challenge continues beyond this fiscal year. Next year, state policymakers look to face a budget gap of at least $228 million according to the consensus revenue estimate. This budget gap, however, could reach as high as $637 million based on cost estimates that identify higher costs for the personal income tax changes in last year’s tax plan.

The reality is that policymakers must revisit the tax plan in order to bolster schools, health care, and other things that help strengthen North Carolina’s economy. Under the inadequate tax system created last year, every year going forward, policymakers are likely to struggle to fund these needed supports to a strong economy.

NC Budget and Tax Center

“We can’t afford it.” This is the prevailing refrain of state leaders nowadays in their efforts to explain away or rationalize their waning support for investing in North Carolina’s future.

Whether the issue is pay raises for K-12 teachers and other state employees, supporting targeted economic development initiatives, protecting the state’s natural resources and environment, one repeated excuse is that revenue is not available for such public investments.

This excuse was used once again in a memo by Art Pope, State Budget Director, in response to the UNC Board of Governors’ (BOG) 2014-15 budget request. In the memo, Pope informs the BOG that its budget “simply is not realistic” and warns that funding the respective budget request “would require the Governor and General Assembly to make major reductions in other state agencies and programs, such as our courts, the “K-12” public schools, and health care.

North Carolina is NOT broke. The costly tax plan passed by the NC General Assembly and signed into law by Governor McCrory last year has created a self-imposed budget challenge. This challenge is occurring, as Pope acknowledges, even as the economy is improving. Read More

NC Budget and Tax Center

North Carolina is known for having an appealing quality of life, with communities across the state offering a great place to raise a family and operate a business. Safe and healthy communities play an important role in contributing to this quality of life in what we North Carolinians call home.

Decisions made by state leaders highlight a lagging commitment to enhancing the quality of life within communities across the Tar Heel state. In the current budget, state leaders disregarded Gov. McCrory’s recommendation to provide funding for drug treatment courts, which is a cost-efficient way to provide drug treatment and support to individuals with substance abuse dependencies. State lawmakers did however create “cost savings” by reclassifying certain low-level offenses and allowing them to be punishable by fines instead of jail time – one particular tradeoff is that such defendants will now have convictions on their records despite not having a right to counsel. This could affect their employment prospects and access to other opportunities. Read More

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Art Pope 3The North Carolina NAACP and other activist groups will commence a series of informational pickets today to shine more light on the rather amazing breadth and depth of the influence of state budget director, Art Pope. The pickets will take place today at 4:00 p.m. outside two of the chain stores owned by Pope’s Variety Wholesalers, Maxway and Rose’s.

The Maxway event will take place at 1905 Poole Rd. in Raleigh. The Rose’s event will take place  at University Mall, 201-C36 Estes Dr. Chapel Hill.

According to an announcement:

“The informational picket campaign is a statewide effort to raise awareness and demand that Budget Director Pope call for a reversal of extremist laws and policies passed in the 2013 Legislative Session and support the request for a Special Redemption Session of the North Carolina General Assembly to reverse course on two extremist policies, the denial of Medicaid and emergency unemployment benefits that will harm the most vulnerable members of our state.”

Learn more at the event’s Facebook page by clicking here.

NC Budget and Tax Center, Poverty and Policy Matters

This school year, approximately 56 percent of all students in North Carolina public schools come from families with incomes low enough to qualify for free and reduced lunch (up from 48 percent in 2008). Many students within this new majority require extra learning supports, as they lag their peers in core learning areas such as reading, math, and English.

The budget signed by Governor McCrory cuts funding in many areas that help boost student achievement. For the 2013-14 school year, these funding cuts have meant fewer classroom teachers, teacher assistants, instructional support, and instructional supplies. This raises concerns about what the failure to invest in public education means for future student performance. Read More