NC Budget and Tax Center

Governor Cooper’s budget points state in the right direction

The Governor’s proposed budget changes directions for North Carolina after years of tax cuts by focusing on urgent and smart public investments that communities have identified as critical to boosting our state’s economy today and in the future. By stopping the scheduled tax cuts in 2019 for the richest taxpayers and profitable corporations, the Governor is able to make some progress in meeting needs that have gone unmet under the budgets that have prioritized tax cuts.

Indeed, the Governor’s $24.5 billion budget stands in contrast to the proposed spending target of members of the General Assembly. The Senate and House have agreed to a $23.9 billion budget that keeps the tax cuts for wealthy taxpayers and corporations.

What do these numbers mean?

North Carolina has historically appropriated at the state level each year an amount that is 6 percent of the size of the economy as measured by state personal income. Governor Cooper would spend 5.1 percent in 2018-19, bringing us back to the level the state was investing at in 2017. The General Assembly leadership would spend 5 percent, or basically hold the line on the state’s diminished investments since the recovery began in 2009.

Here’s a baker’s dozen of investments in Governor Cooper’s budget that will position the state for long-term economic success:

  • Directs $110 million in revenue into teacher and principal pay with a stated goal of reaching the national average for teacher pay in four years.
  • Adds $55 million for mental health personnel and training, including $40 million for local school districts to hire more nurses, counselors, psychologists, and social workers who directly support student mental health
  • Provides an additional $25 million for textbooks and digital resources for all students.
  • Invests $366 million for state employee compensation and benefits package that among other things provides a recurring cost of living adjustment that is the greater of $1,250 or 2 percent. This is the largest increase in over a decade.
  • Adds 79 positions to the Judicial branch to effectively meet workload needs and new ‘Raise the Age’ legislation
  • Adds $9 million in community mental health funding to expand treatment and recovery services to help combat the opioid crisis
  • Invests $14.5 million in the clean-up and ongoing monitoring of air and water quality from Gen-X
  • Invests $28 million to improve the safety and security of prison facilities
  • Provides $3 million for state matching funds that will be used to leverage an additional $14 million in federal funds for drinking water infrastructure projects
  • Provides $30 million to create the NC GROW (Getting Ready for Opportunities in the Workforce) Scholarship, for students enrolled in curriculum programs or non-credit short-term workforce training programs leading to industry credentials in high-demand fields
  • Provides $17.5 million to increase Broadband Connectivity access and improve service to under-served households, businesses, and community anchor institutions
  • Prioritizes low-income housing by including $7 million to assist in developing more safe and affordable housing units in the state
  • Directs $175 million to begin necessary digital and physical upgrades, such as replacing the state’s 25-year old accounting system and repairing university and state buildings

As legislators prepare to release their budget for 2019, they should consider the Governor’s budget and stop the scheduled tax cuts in 2019 in order to make investments that help all North Carolinians and help our state be competitive in the future.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

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