NC Budget Magnifying Glass: Senate budget fails to restore funding for textbooks and classroom instructional material

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June 4, 2014
In Falling Behind in NC, NC Budget and Tax Center

This is the 4th post of a Budget and Tax Center blog series on public services and programs that face cuts in the budget process or have been underfunded in past years. See the other posts here and here and here.

Chances are schools across North Carolina will continue to rely on outdated textbooks and limited resources for classroom supplies for the upcoming school year. The Senate budget approved last week fails to provide additional funding for these two classroom areas in the wake of dramatic state funding cuts to both textbooks and classroom instructional supplies in recent years.

Since the 2009-10 fiscal year, state funding for textbooks has been cut by 81 percent, down from $119 million when adjusted for inflation to around $23 million for the current school year. As for classroom materials and instructional supplies, state funding has been cut by nearly 47 percent since FY 2009-10, down from $90.7 million when adjusted for inflation to around $50 million for the current school year. Local schools systems have been challenged with replacing these state funding cuts with other funding sources or continuing the trend of doing more with fewer resources.

K-12 ed_Textbook & Classroom Supplies
Inadequate state funding for textbooks means the continued use of outdated textbooks, and in some cases schools have resorted to making photocopies from textbooks to ensure that students have learning materials. Diminished funding for classroom instructional materials has meant teachers having to reach into their pockets to buy supplies for classroom instruction.

The decision to not restore funding for textbooks and classroom material and supplies in the Senate budget comes on the heels of policymakers passing a tax plan last year that significantly reduces annual revenue for public investments now and in the years ahead. Policymakers now face huge revenue shortfalls for the current budget as well as for the upcoming 2014-15 fiscal year budget, which are driven by the tax plan passed last year. This foregone revenue could have help boost investments in our public schools.

As House budget writers work to put together their proposed budget, restoring funding for textbooks and classroom supplies would represent a positive step in promoting a quality education for all North Carolina students. Revenue options are available to responsibly demonstrate this commitment. Policymakers should stop the additional income tax cuts slated to go into effect January 2015. Doing so would allow for greater investments in the state’s future workforce, and in turn, the Tar Heel state as a whole.

NC Budget Magnifying Glass: Senate budget cuts in-home and community-based services funding for older adults

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June 3, 2014
In Falling Behind in NC, NC Budget and Tax Center

This is the second post of a Budget and Tax Center blog series on public services and programs that face cuts in the budget process or have been underfunded in past years. See the first post here.

State funding that helps older adults who want to stay in their home would be slashed under the Senate budget that was passed last weekend. The Senate leadership wants to cut the Home and Community Care Block Grant (HCCBG) by nearly $1 million. This move would result in cuts to non-Medicaid in-home and community-based services—such as home-delivered meals, in-home aide, and transportation assistance.

State lawmakers established the HCCBG in 1992, and it is made up of both federal and state dollars.  The Senate’s $1 million cut would be on top of a $2 million cut enacted last year as part of federal across-the-board cuts known as the sequester. HCCBG services are available to people ages 60 and older but the “average” client is nearly 80 years old and the services are well-targeted to those who are near-poor and socially needy, according to DHHS.

The Senate passed a $1 million budget cut to HCCBG services despite a waiting list of roughly 16,000 people, according to a survey conducted by the NC Department of Health and Human Services. The demand for these vital services is likely to keep on the uptick as the so-called graying of North Carolina continues. Meanwhile, the growing cost of delivery shows no signs in subsiding. A $1 million budget cut will only serve to push additional older adults onto the waiting list. Read more

NC Budget Magnifying Glass: Senate budget makes huge cuts to school nurses despite historical underfunding and clear research

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June 3, 2014
In Falling Behind in NC, NC Budget and Tax Center

This is the first post of a Budget and Tax Center blog series on public services and programs that face cuts in the budget process or have been underfunded in past years. 

There would be 70 fewer school nurses in North Carolina’s public education program under the Senate budget, even though the statewide average nurse-to-student ratio has been far below national standards for at least a decade. In addition to this 30 percent cut to the School Nurse Funding Initiative, the Senate budget would shift the remaining 166 nurses to the state’s most economically lagging counties, known as Tier 1 counties.

Apparently, the Division of Public Health “asked” for this cut in response to the Governor’s directive to cut spending by 2 percent, per the comments made today by the Fiscal Research Division staff. Senate budget writers factored agencies’ responses to the Governor into their budget proposal.  Again, this is just another decision by leadership that makes clear the harmful choices that must be made when policymakers reduce the availability of revenue—which is what occurred when lawmakers passed last year’s tax plan that drains available revenue for public investments.

There is a mountain of research that shows that health and education go hand in hand. That’s why the state instituted comprehensive school health services in public schools, per the state Division of Public Health: Read more

Governor McCrory’s budget proposal misses the mark, keeps state on unsustainable path

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May 14, 2014
In Falling Behind in NC, NC Budget and Tax Center

This afternoon, Governor McCrory released his $20.99 billion 2015 fiscal year budget for the period that runs from July 2014 to June 2015. His proposal creates more problems than it solves, failing to take prudent steps that would put North Carolina’s budget on a more sustainable path. Similar to his budget proposal last year, his new spending proposal follows suit and fails to catch up—let alone keep up—with the needs of kids, working families and communities in many areas of the budget.

The Governor’s budget was constrained in major ways—which were self-imposed by state lawmakers last year when they decided to cut taxes. The state is facing a revenue shortfall of $191 million in the 2015 fiscal year (not to be confused with the nearly half-a-billion shortfall for the current 2014 fiscal year that ends in June). The driver of these revenue shortfalls—despite an economic recovery—is the series of tax cuts that Governor McCrory signed into law last year that was already estimated to drain available revenues to the tune of $437.8 million in the 2015 fiscal year.

As we reported last week, estimates suggest that the revenue losses from the tax plan, particularly stemming from the personal income tax changes, could reach $600 million next fiscal year.

Yet, rather than prudently recommending the halting of future tax cuts that are scheduled to go into effect in January 2015, the Governor chose to keep this next round of tax cuts in place despite the diminished revenue picture. As we warned last year, North Carolina cannot afford to pay for tax cuts that primarily benefit the wealthy and profitable corporations at the expense of teacher layoffs, growing waiting lists for critical public services, and higher tuition rates.

State spending under the Governor’s proposal would continue to remain well below pre-recession levels, as illustrated in the chart below, even though spending over the base budget would slightly increase. All areas of education funding fall short of what was called for in the continuation budget. Tax cuts are making it harder to regain lost ground. Read more

Curtain call for North Carolina’s state Earned Income Tax Credit

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January 31, 2014
In Falling Behind in NC, NC Budget and Tax Center, Poverty and Policy Matters, The State of Working North Carolina

Today is EITC Awareness Day – also referred to as the Earned Income Tax Credit (EITC). The EITC is a federal tax credit that encourages work by boosting the income of low- and moderate- income working people and offsets federal payroll and income taxes. The EITC has proven to be a powerful tool in helping lift families out of poverty and improving the well-being of young children.

In 2007, a state EITC was established to help further boost the wages of low- and moderate-income workers in North Carolina and offset the higher share of state and local taxes they pay as a percent of their income compared to high-income workers. More than 900,000 North Carolinians claimed this tax credit in 2011, according to the most current tax information provided by the NC Department of Revenue. The impact of the EITC spans across the state, with taxpayers in each of the state’s 100 counties claiming the tax credit (see this interactive map).

Unfortunately, this tax filing season will mark the last year that low- and moderate-income North Carolina workers will benefit from the state EITC. State leaders allowed the state EITC to expire at the end of last year and chose not to extend the tax credit as part of the tax plan passed last year. As a result, the expiration of the state EITC represents a tax increase for more than 900,000 hardworking low- and moderate-income North Carolina taxpayers, for which every dollar counts in their efforts to make ends meet.

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