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It is true that the final budget reinvests in some programs and services to achieve an overall slight increase in General Fund appropriations. This reinvestment was made possible by using unspent dollars from last year’s budget, budget gimmicks, the reliance on tuition increases and fees, as well as reductions in other areas of the budget. However, state investments in most areas of the budget—including education—are failing to keep up after years of budget cuts.

There are two primary vantage points for analyzing the final budget and making comparisons over time.  One method is to measure the final budget against the actual dollars that were appropriated last year in the 2013 budget.  The other method measures the final budget against the continuation—or base—budget, which reflects the dollars needed in the next year to maintain current service levels.  The Governor’s Office of State Budget and Management, which is headed by Art Pope, collaborates with the various departments and agencies to determine the continuation requirements.

So, which vantage point makes for the best comparison? Read More

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

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

Yesterday evening, legislators released a $20.6 billion budget compromise that will likely to be voted upon and sent to the Governor’s desk for final approval later this week. This budget shorts investments in vital public services, and fails to catch up and keep up with the needs of a growing North Carolina population across major service areas (see the chart below). Some of the budget cuts could have been avoided had lawmakers decided not to drain available revenues by $524 million over the next two years through an ill-advised series of tax cuts that primarily benefit the wealthy and profitable corporations.

As the Director of the NC Budget and Tax Center asserted in her statement, “This revenue loss isn’t just a number on a piece of paper—it means fewer teachers in more crowded classrooms, higher tuition rates and elevated debt load for families, scarcer economic development opportunities for distressed communities, and longer waiting lists for senior services.”

Final_falling behind

Here is a short list of noteworthy items in the major budget areas:

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As lawmakers work to change the state’s tax code, there has been renewed discussion of who pays taxes in North Carolina. Creative storytelling by legislators won’t change what we already know: every household in North Carolina pays taxes.

We’ve been doing a lot of myth busting around tax reform, including a point made earlier today by a legislator on the House floor. This member claimed that all taxpayers would be better off under this plan compared to the current tax code. This would be great news because currently low- and middle-income families pay a greater share of their incomes in state and local taxes compared to high-income families. But again, the facts just don’t support the member’s claim.

The chart below shows Read More