NC Budget and Tax Center

NC tax policy right now, explained in GIFs

In case you haven’t heard, the North Carolina Senate has proposed a tax bill that they claim cuts taxes by $1 billion. They also claim that these tax cuts are mostly going to help middle-income folks out. These claims are both false.

The billion dollar claim is a rounding error that is nearly 20 percent off the mark.

And this tax cut is mostly going to help the wealthy and powerful corporations. Again.

Not to mention, lawmakers also want to permanently change our state constitution so we can’t change the income tax again in the future. That’s just locking in another giveaway to millionaires that cuts off a vital source of revenue.

These choices would mean we won’t have enough to pay for the stuff that makes North Carolina great. Like roads. And schools. And protecting our environment. What happens the next time we have a big storm like Hurricane Matthew that we need to rebuild from? Read more

NC Budget and Tax Center

Statement from Budget & Tax Center on Income Tax Amendment

Statement from Alexandra F. Sirota, Director, Budget & Tax Center 

Senate Bill 75 passed off the Senate floor today in a move by state lawmakers that once again limits the possibilities for North Carolina. The bill seeks to make an unnecessary amendment to the state Constitution that will harm North Carolina’s future prosperity and the democratic process. 

The proposal will lock in what is essentially a giveaway to millionaires and likely shift the state’s reliance to the sales tax, while also putting more pressure on local governments to raise property taxes. This has always been a bad idea for North Carolina, and it still is.

By placing a low and arbitrary income tax cap into our state constitution, lawmakers are taking democracy out of the budget process. They are aiming to lock in their desired choices and limit the choices of North Carolinians tomorrow, 10 years from now and 100 years from now.  Under this amendment, lawmakers elected by North Carolina’s future voters will not have the tools to meet our state’s future needs.

This unnecessary bill shows a lack of responsibility for the common good. It will make progress impossible on shared goals such as improving teacher pay, ensuring every child is reading by third grade, and providing health and mental care to North Carolinians who need it. The results will be costly for us all and our state.

NC Budget and Tax Center

New report on student loans suggests solutions to ensure affordable education for all NC students

A recent report from the Center for Responsible Lending highlights the challenges of student debt and the challenges this creates for North Carolina graduates and the broader economy. It also highlights potential solutions. In light of recent policy discussions about the pressing issue of college affordability, the findings are particularly important to any policy decisions. Here are the highlighted findings:

  • While only 5% of North Carolina students attend for-profit institutions, these students are disproportionately low-income and African-American. NC for-profit students also have higher levels of student loan debt and poorer outcomes compared to other higher education institutions in the state. North Carolina for-profit schools have also faced several complaints and investigations at the state and federal level. For this reason, we recommend that North Carolina improve oversight of for-profit schools by requiring the institutions to report on how much they spend on tuition versus advertising and salaries, and improve other reporting requirements.
  • Historically Black Colleges and Universities continue to play a critical role in educating students of color and low-income students in NC, with lower financial costs than for-profit institutions, and better outcomes. For example, the average completion rate at public HBCUs is almost 3 times greater than the for-profit sector. We recommend that NC increase focus on funding HBCUs and support better marketing for HBCUs so that they can overcome recruiting efforts by the less successful for-profit schools targeting the same student population.
  • If North Carolina develops its own student loan refinancing program, an idea growing in popularity, it should focus that program to ensure it is competitive with existing federal options that work well for many borrowers, and provide rigorous loan counseling to ensure borrowers do not give up rights and privileges that come with federal loans. It is important to bear in mind that refinancing programs do not provide significant relief for low-income borrowers, who are struggling to repay small debt loads due to low earnings. It is also important to recognize that federal repayment programs already serve many graduates from public colleges and universities well.
  • The paper also recommends that NC consider implementing registration of student loan servicers and oversight of servicers and creating a student loan ombudsman at the state level.

To read the full report, click here.

2017 Fiscal Year State Budget, NC Budget and Tax Center

Budget proposals so far: What you might have missed

As we wait on the Senate to release their budget proposal, here’s a look back at our coverage of the budget proposals from the Governor and the House.

General Analysis

  • A stroll down memory lane of recent tax budgets, with tax cuts as the guide rails: Tax changes passed since 2013 have not only significantly reduced revenue available for public investments, but also shifted the tax load to low- and middle- income taxpayers and away from the wealthy and profitable corporations.
  • North Carolina deserves better: North Carolinians are seeing how limited policymakers’ aspirations are for the future of communities and families. First, the Governor proposed a state budget that fell far short of what North Carolina needs to have thriving communities and broad prosperity. Then,  leaders of the House and Senate agreed on setting their sights even lower.

House’s Budget Proposal

Governor’s Proposal

More Coverage

Also, be sure to check out our series on the state budget that hears from North Carolina experts on what our state needs to progress so that all North Carolinians have a fair shot to get ahead.

Follow the Budget & Tax Center’s posts here for continuing budget coverage.

Follow the Budget & Tax Center Twitter feed for live coverage of budget debates and decisions.

2017 Fiscal Year State Budget, NC Budget and Tax Center

Remarks by Rep. Paul Luebke on the House budget

The full transcript of the remarks by Rep. Paul Luebke today during the House debate on the budget. (Watch his remarks beginning at the 16:30 mark.)

My concern looking at this bill is that it’s not placed in the proper context. And the context is the needs of the state and decisions that have been made in the last few years – particularly since 2013 – about taxes.

We all know you cannot have appropriations – you cannot have a budget – without taxes. And a lot of the times we have a tax that looks, for example, like the standard deduction this year in the tax bill. It is the “cost” – that is to say the reduction to availability – is $25 million. But the ballooning effect is there, and two years from now it reduces availability by $133 million. We are taking off the table a lot of revenue to meet the needs of the state. You might ask, “What are these needs? Haven’t we done everything in this budget that we could possibly do?” And the answer is, “No.”

While the budget does right by overall teachers, it doesn’t do anything for those teachers who are beginning. No one can really claim that $35,000 is an adequate income for a teacher. In fact, I have data that shows that if a teacher has a family at $35,000 that she or he is eligible for the Earned Income Tax Credit. That is to say that because of the low-income and family size there is, under that program – a program we all know, I think, was started by President Reagan and expanded by President Clinton – a teacher at $35,000 is eligible for the tax credit because the income isn’t sufficient.

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