July 21, 2009
STATE BUDGET: Impact of Continued Continuing Resolutions
It's almost three weeks since the new fiscal year started, and North Carolina still does not have a state budget. With each passing day, the state’s fiscal hole grows deeper. The continuing resolutions the legislature has passed – one on June 30 and a second on July 15 – allow state agencies to spend 85 percent of their current budgets. However, the state isn’t bringing in enough revenue to sustain this level of spending. In addition, without a budget the state is postponing the spending cuts and revenue increases that both state houses concur on. So changes that everyone agrees need to be made aren’t being made, and the budget picture just keeps getting uglier and uglier.
Meanwhile, everyone is stuck in budget limbo. State agencies, county and municipal governments, and school districts are all waiting. Many private businesses are stuck, too. Providers of all kinds of services – transportation, housing, child care, and every kind of physical and mental health care – are holding off on hiring or expanding until they see how the state will fund the programs that make up much of their business.
MORE BUDGET: What's the Hold Up, Folks?
While leaders in both the House and Senate agree the state needs to raise almost a billion dollars to avoid devastating cuts to programs and services, they can't agree on where the money should come from. One of the big points of contention involves the corporation income tax. House leaders want to implement a policy called “combined reporting,” but Senate leaders don’t.
Combined reporting simply requires corporations to be honest when filing state corporate income taxes. Current tax law in North Carolina allows parent corporations and their subsidiaries to file separate tax returns, which enables them to move profits out of the state. This way, they avoid paying for the roads they use to transport their goods, the schools that educate their workers, and the law enforcement officers who protect their property.
Combined reporting would help local businesses, since they would no longer have to compete against corporations that don’t pay their taxes. Plus, claims that combined reporting would scare away corporations are, in a word, bogus. The Center on Budget and Policy Priorities found that of North Carolina’ s 75 largest manufacturing employers, 60 maintain a facility in at least one state that mandates combined reporting. In fact, almost half — 36 out of 75 — have facilities in five or more combined reporting states!
So, in summary, hesitation to implement a plan that will help local businesses and raise revenue is based on concerns proven to be unfounded.
Rumors were buzzing at press time about a deal being close -- it's time to get a deal done that raises the revenue we need.
HEALTH CARE: Protesting BCBSNC's Efforts to Derail Reform
The Justice Center’s NC Health Access Coalition has been busy beating back efforts by Blue Cross Blue Shield of NC to s federal healthcare reform. HAC director Adam Searing gave an impassioned speech at a protest in front of the company’s headquarters last week and pointed out that BCBSNC, as a non-profit built with donated money and given preferential treatment by government, has no business trying to derail reform so it can keep paying its executives millions of dollars. Meanwhile, HAC’s Adam Linker is debunking the healthcare lies BCBSNC is promoting through its new website on reform.
In addition, a report from Families USA rising healthcare costs will have caused 230,990 North Carolinians to lose their health coverage between January 2008 and December 2010. That's about 1,480 people every week. Check out the Families USA widget that tracks how many Americans have lost their insurance since the start of 2008.
UNEMPLOYMENT: How NC Can Help Families
The latest state unemployment numbers suggest that economic recovery will be a lengthy process for North Carolina workers, further highlighting the need to preserve vital state programs that protect working families. The state's Employment Security Commission says the seasonally adjusted unemployment rate for North Carolina dipped one-tenth of one percent to 11% in June. The national rate increased from 9.4% to 9.5% in June.
"It looks like we are bumping along the bottom of the economic slump right now. It is difficult to predict when the slide will end," said Dr. Stephen Jackson, a policy analyst with the NC Justice Center's Budget & Tax Center. "With unemployment at such a high level, it is now more important than ever to maintain our critical public investments."
State public investment programs stimulate the economy by preserving jobs and providing essential support for vulnerable populations. It's especially important, Jackson said, for people to have access to certain programs in a time of economic crisis. Examples include the NC Health Choice program, which provides health insurance for the children of working families who do not have health insurance through their employer. Another way the state can help, he said, is by keeping doors to community colleges open for workers who need retraining after being thrown out of work.
EDUCATION: Involving Parents in Personal Education Plans
House Bill 804, a measure that would amend the law regarding personal education plans (PEPs) for students at risk of academic failure, has passed in both the House and Senate chambers. However, there are differences between the two versions, so in the next week or two a conference committee of members from both houses will have to reconcile those differences.
Current state law requires schools to develop personal education plan for every student at risk of academic failure. However, the law ss short of requiring parental notice and/or involvement in creating the plan. HB 804 is a minor modification that requires schools to provide parents with some type of notice once their children have been identified as at risk of academic failure. Research has proven that parents are the key to improving educational outcomes for at-risk students.
We’ll keep you posted on the bill’s progress.
CONSUMER ISSUES: Losing your house over $300?
Can you imagine losing your house over a small amount of money? Due to a hole in North Carolina law, one homeowner in Cary faced just that grim reality.
- In North Carolina, homeowners associations (HOAs) can file a lien against a homeowner's property if that homeowner owes unpaid dues. This can allow HOAs to foreclose on homes based on very small debts.
- No notification is required under current law. Without such notification requirements, homeowners can miss a payment, and have a lien placed against their property -- all without knowing about the debt in the first place.
- New legislation, HB 806, would require HOAs to take reasonable measures to keep address records current and supply minimal notice requirements. This narrow, common-sense bill would help homeowners keep their homes and avoid facing daunting legal bills from having to defend against a lien and possible foreclosure.