Deep tax cuts are preventing Gov. McCrory from proposing a bold, visionary state budget for the upcoming 2017 fiscal year. The 2013 and 2015 tax cuts are draining more than $1 billion in revenues annually, squeezing out much-needed reinvestment in the programs and services that help children, families, and communities thrive. Under his budget, North Carolina will continue to be held back by substantial unmet needs.
There are few public dollars available for anything else after previous deep tax cuts and the governor’s prioritizing of an uneven compensation package for teachers and state employees. Without those tax cuts, what could have been possible for North Carolina? There has been plenty of coverage of what is in his budget over the last week but there has been little coverage of what’s not in his budget. Below is a short list of investments that are missing in action but still greatly needed to build a stronger, more inclusive economy for us all.
– Fails to restore the state Earned Income Tax Credit, which allows low-income workers to keep more of what they earn. We are the only state to eliminate this anti-poverty tax credit in 30 years.
– Fails to provide a raise for all teachers and state employees. Teachers and school personnel get a mix of raises and one-time bonuses. On average, teacher pay would increase by 5 percent (excluding the bonuses) but his plan would not provide every teacher a raise, including veteran teachers. State employees get a one-time 3 percent bonus. He also appropriates funds to implement a new market-aligned salary structure for state agencies, and to adjust salaries in state job classifications where employee pay is below market value, not competitive in the marketplace, and where the state is having difficulty recruiting and retaining employees.
– Fails to provide a cost of living adjustment (COLA) for state retirees despite shrinking purchasing power due to changes in the economy.
Early Childhood Education, K-12 Schools, and Higher Education
– Fails to restore previous income eligibility guidelines for the child care subsidy program that made the program more accessible to moderate-income families with children ages 6-12 years old. Also fails to provide funding to raise the wages of child care workers.
– Fails to make progress on reducing the waiting list for the child care subsidy program because it keeps spending to currently enacted levels. This means thousands of children will not get the early education that they need to thrive.
– Fails to provide funding for the 960 additional school nurses needed to achieve the ratio of one nurse to every 750 students as recommended by the National Association of School Nurses.
– Fails to restore the Teaching Fellows Program that lawmakers eliminated in recent years. This means that young adults will not have access to this program that searched for North Carolina’s most talented high school graduates and provided them with scholarships to attend the state’s public universities in exchange for a commitment to teach in a public school.
Affordable, Healthy, and Safe Communities
– Fails to provide boost to the Housing Trust Fund despite a $12 million drop in state investments since 2007, when adjusting for inflation. Half of renters in the state are unable to afford the cost of fair market housing.
– Fails to expand Medicaid, which would give approximately 318,666 North Carolinians access to affordable healthcare and nearly $13.7 billion in economic benefits statewide.
– Fails to invest in the Healthy Corner Store Initiative to help address food deserts—which impact more than 1.5 million North Carolinians—by making healthier food options more accessible. The program also supports the sustainability of small businesses.
Re-employment and Economic Development
– Fails to develop a comprehensive plan for retraining the long-term unemployed. This budget does not devote sufficient resources to ensure that everyone who wants to work can get the training they need to find a job in the post-recession economy.
– Fails to put forward a robust rural economic development strategy. The allocation of $1 million in main street revitalization for small rural towns will be insufficient to meet the needs in rural communities and the desire for a vision that can guide smart investments over time.
Tazra Mitchell is a policy analyst for the N.C. Budget & Tax Center.