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NC Budget and Tax Center

In recent months, we’ve been hearing a lot from legislative leaders about how much the state’s economy has “improved” over the past couple years. Unsurprisingly, it turns out that much of this improvement never happened.

As seen in the latest issue of Prosperity Watch, North Carolina still has higher unemployment and lower shares of employed people than the national average–a trend that has remained consistent since 2011 and has actually gotten worse in 2013.  See the latest Prosperity Watch for details.

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Art Pope 3Among the many topics on which Gov. McCrory has made repeated misleading statements and told downright whoppers in recent months, none has been more frequently front and center than unemployment insurance. Time and again, the Guv has claimed that the state did not take away benefits and/or that the reason for the cut off in federal emergency benefits was that it was President Obama’s fault for not granting North Carolina an exemption or allowing the GOP legislature’s changes to be “grandfathered.”

As has been reported repeatedly, however, these claims are simply false. That’s why the Guv has had to issue clarifications and retractions on more than one occasion. The simple truth is that when Congress put extended emergency benefits in place as part of the economic recovery/stimulus law back in 2009, it told states that they could only continue to access those federally-funded benefits if they didn’t cut benefits and eligibility at the state level. This is a standard congressional practice used by leaders of both parties to help make sure that federal initiatives aren’t undercut by free-riding states with no skin in the game. Federal officials repeatedly told North Carolina this and warned them not to cut benefits lest they jeopardize the state’s participation in the federal emergency program.

The state’s response: A big raspberry. Despite the plain warning (and pleas from advocates to merely delay new cuts until 2014 so as not to run afoul of federal law), legislative leaders and Gov. McCrory plunged ahead with unprecedented cuts to benefits and eligibility that were quite possibly the largest in American history. As a result, the federal government was left with no choice but to abide by the congressional mandate and cut North Carolina off July 1.

So why does McCrory keep making the bizarre claim that it was the feds who are responsible for the cuts? We got a hint as to the answer to that question yesterday when State Budget Director Art Pope made his strange appearance at a protest outside his office organized by the NAACP and others.  Read More

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North Carolina Gov. Pat McCrory, in an interview aired yesterday on a Charlotte radio station, downplayed cuts to unemployment benefits caused by made this year to the state’ s unemployment insurance system.

“We didn’t take away unemployment benefits,” McCrory said on WFAE’s “Charlotte Talks” program in response to a question about cuts to the unemployment insurance system. “We didn’t extend them. We were following the existing policy.”

Audio clip from WFAE in Charlotte

The state, through legislation signed into law in February by McCrory, did cut both the length of time a person can collect unemployment (reduced from six months to a sliding scale of 12 to 20 weeks) and also cut the maximum weekly benefit from $535 to $350 a week.  The cuts were part of an extensive plan to repay more than $2.6 billion the state unemployment insurance system borrowed during the height of the recession.

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This little, under-reported development in China is likely to have vastly greater impact on North Carolina’s unemployment rate than all of the conservative tax giveaways to corporations and the wealthy combined.

Economist-extraordinaire  Dean Baker explains:

China’s central bank announces job creation program for the United States Read More

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Sharon DeckerYou gotta’ hand it to state Commerce Secretary Sharon Decker for one thing: she continues to be the one McCrory administration official who will occasionally admit a problem and not directly blame the Perdue administration for its existence. She also frequently doesn’t make a whole lot of sense, but at least she occasionally seems sincere.

This past summer, she  said that the controversial legislative session and the protests it spawned was making it tough to sell the state to potentially relocating businesses. Now, this week, as several news outlets have reported, she’s admitted that North Carolina’s “skills gap” is a problem when wooing businesses looking for highly-educated workers.

Funny, that sounds an awful lot like what progressives and McCrory administration critics have been saying all along — namely that the key to solving our economic problems lies not in slashing taxes but in investing in our kids and workersRead More