NC Budget and Tax Center, News

Is your community paying to enforce Trump’s immigration agenda? More communities saying “no”

While media attention often focuses on President Trump’s stream of insulting and divisive comments about immigration, less attention has been devoted to the administration’s ongoing effort to enlist local communities to carry out his agenda. The Trump administration wants to expand a program called “287g,” which effectively deputizes local law enforcement agents to act as agents of Immigration and Customs Enforcement (ICE).

These agreements can tear communities apart, and have potentially serious fiscal, economic, and legal risks. That is why many communities are looking to end existing 287g agreements or thinking twice before signing up to be the agents of Trump’s immigration agenda. For example, the primary elections on May 8th saw the incumbent sheriff in Mecklenburg, who reauthorized that county’s 287g program, go down to defeat.

The Trump administration did not invent the 287g program, but it clearly sees it as a tool for implementing its agenda. The administration has signed up over 45 new localities to enforce its immigration priorities since January 2017 and currently has agreements in place with six sheriff’s offices in North Carolina (Wake, Mecklenburg, Gaston, Cabarrus, Nash, and Henderson). Alamance County had its 287g agreement terminated due to allegations of discriminatory practices, but has subsequently applied to have it reinstated.

Beyond creating fear and fostering distrust, 287g agreements have far-reaching fiscal, economic, and legal implications for local communities.

Click HERE to receive updates on immigration enforcement issues

Large cost to local taxpayers

When local sheriffs’ offices sign 287g agreements, they are pledging to pay for a big part of the cost of doing immigration enforcement work. This even includes paying for travel and lodging for employees to receive the training required to participate in the program.

This is from the Wake County’s sheriff’s office 287g agreement: “The WSCO is responsible for the salaries and benefits, including overtime, of its personnel being trained or performing duties under this MOA… The WCSO will cover the costs of all WSCO personnel’s travel, housing, and per diem affiliated with the training required for participation in this MOA.”

The local resources that 287g agreements consume could be utilized for other vital public safety needs. When the sheriff in Harris County, Texas pulled out of its 287g agreement, the sheriff’s office was able to reassign ten deputies, and their $675,000 in salary costs to other local priorities.

Read more

NC Budget and Tax Center

Now we know how much North Carolina CEOs are paid compared to their employees

If you’ve wondered why wages for most working people remain stagnant during a period of record stock market values and corporate profits, a recent article in the Winston-Salem Journal provides some insight. The gap between what CEOs rake in and what the typical workers in their companies are paid has exploded since the 1970s, and new data shows how much of their companies’ success is being captured by corporate leaders.

Thanks to a relatively unheralded provision in the Dodd-Frank Act, corporations are now required to report how much more CEOs at individual companies are paid compared to their typical employee. This requirement sheds important light into the often murky waters of CEO compensation, and what emerges from the gloom is often shocking.

“Even though corporations have received criticism for multi-million-dollar executive payouts from rank-and-file employees, worker advocates and some shareholders, the compensation levels typically boiled the pot for just a few days….

“Analysts and economists say the new CEO pay ratio has the potential to make the issue more of a paycheck and dinner table conversation, or it could just provide another throw-up-your-hands, what-can-you-do round of frustration.”

Pay at our countries’ largest companies has not always been this lopsided. According to analysis by the Economic Policy Institute, the pay gap between CEOs and workers was 20-to-1 in 1960, rose to 89-to-1 by the late 1990s, and surged to 271-to-1 by 2016.

With many CEOs at the helm of companies based in North Carolina receiving hundreds, and in some cases more than a thousand, times what their typical workers receive, it’s small wonder that many working families can’t make ends meet. Hopefully, this newfound transparency will raise awareness of just how unbalanced compensation has become and will incite political and business leaders to take real action to ensure that everyone shares in the benefits of economic growth and quarterly profits.

NC Budget and Tax Center

North Carolina’s tax code isn’t meeting the state’s needs, will continue to fall short

Leaders in the General Assembly responded to the consensus revenue forecast with a promise to continue with the tax cuts that have hampered our states ability to fund classrooms, support rural economic development and strengthen the economy for the long-term.

The tax cuts that are scheduled for January 2019 will reduce annual revenue by $900 million in a full fiscal year.  But because the new tax cuts start in the second half of the second year of the two-year budget, lawmakers were not required to account for roughly $400 million of the annual cost of the tax cuts. Leaders put together a state budget for the second year that only accounts for $521 million in revenue losses from cutting the rate of taxes paid by corporations on their profits to 2.5 percent and further lowering the state’s flat personal income tax rate to 5.25 percent.

Leaders claim that the announcement of an over-collection—a mere 1 .5 percent—of the state budget merits staying the course.  Even with that announcement of dollars above what was expected, however, North Carolina will not have a tax code that keeps up with meeting the needs of a growing population with diverse needs. Read more

NC Budget and Tax Center

U.S. House farm bill spells disaster for millions of North Carolinians

Last week, the House Agricultural Committee released its version of the 2018 farm bill. Chairman Conaway’s proposal would increase hunger and further burden struggling North Carolinians by cutting, and in many cases taking away, food assistance. Its effects will ripple through communities, businesses, and farms across generations.

Rather than helping those in need by providing job training opportunities or ensuring workers earn a living wage, this proposal seeks to take away their food. The effects of these harsh changes will be felt by everyone, including parents raising children, people with disabilities, older workers, low-wage workers, and those unable to find jobs.

  • Given that North Carolina is the 10th hungriest state in the nation, this bill would be particularly devastating for our residents. In 2016, SNAP reached more than 1.5 million North Carolinians, targeting the most vulnerable folks to help ensure older adults, veterans, and children get enough to eat each day. SNAP benefits also help stimulate the state’s economy. More than 9,700 grocers and retailers participate in the program, which pumped $2.2 billion into the economy last year. On average, from 2011 to 2014, SNAP benefits lifted 175,000 North Carolinians – including 81,000 children – out of poverty. Click here to learn more about who’s hungry in your legislative district.
  • This bill strips flexibility from the state and creates barriers to the efficient delivery of services. By restricting categorical eligibility and imposing an untested child support cooperation mandate, this proposal prevents North Carolina from administering SNAP in a way that is most efficient and follows the evidence. Categorical eligibility (CAT EL) is critical in providing food assistance to low-income families with children. Data from the Department of Health and Human Services find that eliminating CAT EL would strip food assistance from 133,000 North Carolinians, including more than 51,000 children.
  • Countless individuals would be at risk of losing food assistance through no fault of their own. There are more jobless workers than there are job opportunities in 87 of North Carolina’s 100 counties. The notion that harsh work requirements would “motivate” jobless workers to find work ignores this fundamental reality. Although North Carolina banned work-requirement waivers for economically depressed counties in 2016, these work requirement provisions would double down on people already struggling to find work and preclude the state from undoing a harmful state law that ignores economic realities. Significantly, it would extend the reach of work requirements to affect parents of children over the age of six and older adults.
  • Funding for new work programs is inadequate and fails to recognize what is needed to get people back to work. Under this proposal, North Carolina will be required to provide employment assistance to every eligible SNAP recipient. While not a bad idea on its own, the proposal only allocates $1 billion for an estimated 3 million participants throughout the nation, amounting to $30 per month per participant.This unfunded mandate at the federal level will be pushed down to North Carolina legislators and leaders to address with resources that have artificially been constrained by tax cuts. Currently, only nine of 100 counties in the state operate SNAP Employment and Training programs. In order to offer meaningful employment and work support, North Carolina would have to invest in a workforce development system that reaches rural communities and provides short-credentials, apprenticeships, subsidized work or on-the-job training. In addition, given the evidence around wrap-around services contribution to supporting employment outcomes, North Carolina would need to make additional commitments to transportation, child care, and affordable housing, among other programs.
Commentary, NC Budget and Tax Center

This simple graph sums up NC’s “tax the poor, feed the rich” tax system

In case you missed it on Monday, the latest edition of Prosperity Watch from the N.C. Budget and Tax Center neatly sums up one the most pernicious aspects of North Carolina’s tax system: its favoritism for the rich.

Tax season comes to a close this week, and Tax Day serves as a good time to reflect on who pays taxes in North Carolina. The income tax is, naturally, at the foremost of our minds, but often ignored as one of the best tools to align our tax code with taxpayers’ ability to contribute to and help build thriving communities.

North Carolina’s adoption of a flat income tax rate – after years of having a graduated income tax rate – has made our tax code more upside down, asking less of those with the highest income. A graduated income tax applies a higher rate on every dollar of income above certain thresholds, while a flat rate delivers a bigger tax cut to the state’s wealthiest taxpayers.

The reduction in the share of their income paid in state and local taxes—through this change as well as others since 2013—means fewer dollars for investments in the pathways that connect people to opportunity such as quality early childhood, K-12 education, and affordable post-secondary education. It also means that middle- and low-income taxpayers continue to pay nearly 10 percent of their income annually in state and local taxes, nearly two times as what is paid by the top 1 percent with average income is $1 million.

This upside down approach to raising the revenue needed for public schools, health, and well-being is also unlikely to perform over time. Without a tax code that aligns with where income growth is happening – concentrated at the top – over time the dollars available for public investments will fall short of what is needed.