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Jobs11-5During the debate over last year’s billion-dollar-a-year tax cut plan, supporters made a lot of big promises about the supposed economic benefits of cutting corporate and personal income taxes for wealthy individuals and highly profitable corporations. The problem—as many warned at the time—is that tax cuts almost never live up to their promises.

And that’s the point made in a recent piece by the well-respected Fiscal Times. In order for the tax proponents’ claims to be true, North Carolina would have needed to generate job growth that is significantly better than other states and the national average. According to the Fiscal Times:

The trouble is that the promised job growth hasn’t really materialized.

To be sure, with the U.S. economy as a whole adding jobs at a pace of 250,000 per month, there aren’t many states seeing a downturn in employment anymore. But the promises that went along with the tax cuts and reduced spending weren’t about keeping up with the rest of the country, but about surging ahead.

The Fiscal Times examined the job creation record of North Carolina and two other states that have experimented with deep tax cuts—Kansas and Wisconsin—and found that:

The dramatic tax cutting doesn’t appear to have done nearly as much for job growth as promised.

Wisconsin and Kansas, for example, have actually lagged the national average in job creation since their big tax cuts and budget cuts were enacted:

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A recent Washington Post story confirms once more that the anti-taxes, anti-government policies of the conservative leaders running Kansas continue to backfire.

“Gov. Sam Brownback of Kansas took to the pages of the Wall Street Journal last month to tout the success of his economic program, particularly several rounds of income tax cuts amounting to the largest in the state’s history. ‘We supported small business by taking away all income taxes on small businesses,’ Brownback wrote, ‘allowing them to reinvest in their businesses, creating jobs and growth. … By giving these companies more money to reinvest in their businesses, we are enabling them to hire more people and invest in needed equipment.’

The only problem? That job growth hasn’t exactly materialized. In fact, as Josh Barro notes in a must-read over at The Upshot today, job growth in Kansas has actually lagged behind the U.S. average, especially in the years following the first round of Brownback tax cuts in 2012.

As the story also notes, the latest finding echo those of a March report from the Center on Budget and Policy Priorities which found that: Read More

State budget negotiations will spill over into next week as lawmakers remain at odds over Medicaid and the best approach for funding raises for teachers and state workers.

Rep. Verla Insko believes legislative leaders may have a difficult time reaching a consensus after last year’s budget cut taxes “too much, too fast.”:

“One of the proposals this year was to reduce funding for children with intellectual and developmental disabilities,” explained the Orange County legislator. “Why would you take a population that deserves help and needs help and remove [services]?”

“The economics is what we talk about a lot…but the real sad thing is we don’t think about the impact on human beings.  These are our children and our community, and we are undermining their ability to have a productive life.”

Rep. Insko appears this weekend on N.C. Policy Watch’s News & Views to discuss the budget, school vouchers, and support for the university system.

For a preview of her radio interview with Chris Fitzsimon, click below:

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Click here for more on how the Senate and House budget proposals would impact programs for young children and working parents.

Local communities across North Carolina are already feeling the impact of recent tax policies and budget decisions made by state policymakers. A recent news article quotes a Pitt County commissioner lamenting disapproval with the state pushing off on local governments what they should be funding. Indeed, the tax plan passed last year results in self-imposed budget challenges today that will continue for years ahead, resulting in continued state funding cuts to core public investments that serve as the foundation of economic prosperity.

We at the Budget & Tax Center have traditionally talked about the net revenue loss under the tax plan, but that masks something important that happened when policymakers overhauled the tax code. The tax plan passed last year shifts responsibility for funding core public investments to local governments, in part, by recapturing some of the shared revenue from state sources that went to local governments to meet their obligations.

One example of this shift was the decision to repeal and eliminate the allocation of a portion of corporate income tax revenue dedicated to the School Capital Building Fund (SCB Fund), created in the late 1980s to assist local governments in meeting their public school building capital and technology equipment needs. Prior to the tax change, a portion of revenue generated from the state corporate income tax went to the SCB Fund. That practice ends under the tax plan. Over the next five years, this tax change takes away $382 million from local governments who used the revenue to improve education facilities in their communities. Read More

This is the 4th post of a Budget and Tax Center blog series on public services and programs that face cuts in the budget process or have been underfunded in past years. See the other posts here and here and here.

Chances are schools across North Carolina will continue to rely on outdated textbooks and limited resources for classroom supplies for the upcoming school year. The Senate budget approved last week fails to provide additional funding for these two classroom areas in the wake of dramatic state funding cuts to both textbooks and classroom instructional supplies in recent years.

Since the 2009-10 fiscal year, state funding for textbooks has been cut by 81 percent, down from $119 million when adjusted for inflation to around $23 million for the current school year. As for classroom materials and instructional supplies, state funding has been cut by nearly 47 percent since FY 2009-10, down from $90.7 million when adjusted for inflation to around $50 million for the current school year. Local schools systems have been challenged with replacing these state funding cuts with other funding sources or continuing the trend of doing more with fewer resources.

K-12 ed_Textbook & Classroom Supplies
Inadequate state funding for textbooks means the continued use of outdated textbooks, and in some cases schools have resorted to making photocopies from textbooks to ensure that students have learning materials. Diminished funding for classroom instructional materials has meant teachers having to reach into their pockets to buy supplies for classroom instruction.

The decision to not restore funding for textbooks and classroom material and supplies in the Senate budget comes on the heels of policymakers passing a tax plan last year that significantly reduces annual revenue for public investments now and in the years ahead. Policymakers now face huge revenue shortfalls for the current budget as well as for the upcoming 2014-15 fiscal year budget, which are driven by the tax plan passed last year. This foregone revenue could have help boost investments in our public schools.

As House budget writers work to put together their proposed budget, restoring funding for textbooks and classroom supplies would represent a positive step in promoting a quality education for all North Carolina students. Revenue options are available to responsibly demonstrate this commitment. Policymakers should stop the additional income tax cuts slated to go into effect January 2015. Doing so would allow for greater investments in the state’s future workforce, and in turn, the Tar Heel state as a whole.