Five things missing from the House budget

As an exercise in reflecting the state’s priorities, the House budget falls short. North Carolinians know that ensuring our children’s education is of the highest quality, that our communities can thrive and that our public services—from courts to transportation to environmental inspections—are effective and efficient means committing to fund those things together.

The House budget, like the Governor’s budget before it, assumes that the state can’t afford to invest. But our current availability is limited by policymakers’ own tax choices that reduce resources that support the foundations of an economy that will work for everyone. Policymakers already allowed a second round of tax cuts for profitable corporations and wealthy taxpayers go into effect in January and will cut taxes again for profitable corporations because revenue collections exceeded expectations and met the trigger for further tax cuts. Because the trigger threshold was set arbitrarily low, however, meeting the trigger does not reflect the realities of needs in our communities.

This choice—to hold back the state from reinvesting by prioritizing tax cuts over building a stronger economy—means that there is a lot missing from the House budget. In light of the historic decline in revenues resulting from the recession and its aftermath, policymakers have effectively curbed the state’s ability to reinvest due to tax cuts. The result is missing investments that can mean the difference for children, families, businesses and communities in doing well in our state and the missed opportunity to grow our economy stronger and more competitive.

Here are five missing investments that the Budget & Tax Center has identified:

1. Medicaid Expansion: For the nearly 500,000 North Carolinians who lack access to health care, the continued failure to expand Medicaid and draw down federal support to do so is a big missed opportunity. As a recent Cone Health Foundation report has shown, all counties are impacted and the state’s economic and fiscal health is harmed as a result.
2. Restored TAs in the Classroom: There are more than 7,000 fewer state-funded teacher assistants, who provide critical classroom support to children’s learning particularly in the early years, than there were before the recession started. For every teacher assistant missing the classroom, there are at least 20 students without the increased adult attention and support for their learning objectives.
3. Lower School Nurse-to-Student Ratio: School nurses, who help ensure that children are ready to learn and ease access to health care for many families who would otherwise lack it, are still underfunded in the House proposal. The number of school nurses relative to the student population has been cut in half since 2004. And despite the evidence that health is a key indicator of student achievement and school nurses a key community asset, this missing investment affects not just students but their families and communities.
4. Affordable Housing for All North Carolinians: Affordable housing investments, taking into account the Housing Trust Fund and the loss of a tax credit for affordable housing development, have been cut by at least $50 million since before the recession started. Moreover, state policymakers have diverted federal Community Development Block Grant funds away from housing projects further reducing resources to address a critical need for families’ seeking shelter that is safe and affordable. Beyond ensuring that all North Carolinians can put a roof over their head, affordable housing is a powerful tool in the revitalization of communities and the economic development of neighborhoods.
5. Targeted Investments in Economically Distressed Areas: Another missed opportunity is targeted investment in rural and still struggling communities to ensure their economic development, despite the rhetoric and some small nods in the House budget (there is a $10 million bump in funding for the rural portfolio at Commerce). Rather than reinvesting in community economic development strategies—main street revitalization, community development finance, broadband infrastructure, and other proven tools—the House budget places a big chunk of its limited funds (nearly $100 million) towards incentives and corporate giveaways that are poorly targeted to the North Carolina communities in need of support. These policy choices to invest in big companies over communities and North Carolinians will not address the challenges for everyday North Carolinians: stagnate wages amidst rising costs for the basics.

Again, the big thing missing from the House budget is a reconsideration of the corporate tax cuts that will go into effect automatically because one-time money has meant collections are higher than anticipated in this year. Delaying these tax cuts even one year could provide policymakers with an opportunity to reinvest an additional $100 million while also ensuring greater caution with regards to future revenue streams.

It may be easy to forget what we used to collectively commit to supporting in our state but we won’t be able to ignore these missing investments for too long. North Carolina’s communities are best positioned to deliver a high quality of life to all when they are supported by adequate investments. A state budget that reflects that goal can’t afford to miss the opportunity to lay the foundation for an economy that works for everyone.

Consider sharing with us what YOU think is missing from current budget proposals. What are the great things that we have accomplished together through the state budget that you remember and miss? You can share your thoughts in the comment space below.

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