NC JUSTICE NEWS: Corporate Tax Cuts + Private School Vouchers + Federal Loans

May 3, 2011

CORPORATE TAX CUTS: Likely to hinder, not help, economic growth

Cutting North Carolina's corporate tax would be more likely to harm economic growth than aid in the state's recovery.

Currently, North Carolina has the lowest state and business taxes as share of the economy in the country. The proposals for cutting the corporate tax rate would cost the state $307 million in the next fiscal year, with the annual cost rising to $410 million after five years, with no promise or evidence that the corporations benefiting from the tax cut will create jobs.

Fewer than one in six of the state's 175,000 private employers pay any state corporate income tax. In addition, a mere 217 corporations—representing less than one in 800 North Carolina private employers—would reap more than half the benefits of any corporate tax cut. Small business owners would see little benefit from the tax cut, and in fact would only bear the costs of higher personal taxes and reduced public services.

Instead of cutting the corporate tax rate, lawmakers should look to investing in public structures and state programs that generate economic benefits to North Carolina's citizens. Through supporting customized job training, temporary wage subsidies to create new jobs for unemployed workers, and expanded access to early childhood education programs, state leaders can promote economic growth and job creation. A skilled, educated workforce and sound public investments benefit the lives of North Carolinians from all walks of life, not merely those at the top.

PUBLIC EDUCATION: The effort to create private-school vouchers

One of the more worrisome education bills to come up this session is House Bill 344, which would give state tax credits to parents who take their special-needs students out of public schools and homeschool them or send them to private schools.

Certainly, the services for special-needs children in public schools are not adequate and need much greater investment. But while this bill might work for a small share of these students, it would hurt many more. Very much like the other voucher bill introduced this session (House Bill 41), this bill provides funds for people who can already afford to send their children to private schools, and it does not provide enough funding to enable low-wealth parents to do so. Instead, both of these bills would siphon more money out of the public school system, which is already facing drastic cuts.

In addition, there is nothing to show that this credit would benefit many special-needs students. The odds are good that most of the students whose parents take advantage of this credit will be those with mild disabilities. There are few, if any, private schools that will take students with severe physical, developmental or intellectual disabilities—and the ones that do specialize in special-needs students cost much more than the $6000 credit. (For example, full-time tuition at the Mariposa School for Children with Autism in Cary costs more than $50,000 a year.)

This bill would leave public schools with a greater share of students with significant needs, but they would have less money to provide services, which are mandated by federal law.

COMMUNITY COLLEGES: Protecting federal loans

North Carolina ranks dead last among the states in the percentage of community college students with access to federal loans, according to a new report from the Washington-based Project on Student Debt.

Federal loans have fixed interest rates and flexible repayment plans, enabling students to avoid crippling debt. But in North Carolina, only 20 of the state’s 58 community colleges have chosen to participate in the federal loan program. That’s because some college administrators are concerned a high percentage of their students will default on loans, which can trigger sanctions against the college from the federal government. However, a look at the numbers shows the risk to colleges is low, while the benefit to students and the state’s economy would be significant.

Last year, the state legislature passed a law requiring community colleges to participate in the federal loan program starting in July. A bill that would have undone that requirement passed out of the legislature but was vetoed by Governor Perdue.

At a time when making post-secondary education widely available is essential to bolstering the state’s workforce and economy, it is beyond comprehension that legislators and college administrators would oppose giving students access to affordable loans. But, despite the governor’s veto, the effort to do just that persists.

DEFENDERS OF JUSTICE: Buy tickets and become a sponsor today

The Justice Center will present its annual Defender of Justice Awards on May 19 to honor individuals and organizations that have made significant contributions in the fight against poverty in areas that reflect the scope of the Justice Centers work.

Join us on May 19 to celebrate the great work of this year's award recipients. Buy tickets online today.

You can also help support the Awards celebration and the ongoing work of the Justice Center by becoming a sponsor of the event. Click here for information about sponsorship options.

The NC Justice Center's
2011 Defenders of Justice Honorees

Thursday, May 19, 6 pm - 9 pm
American Tobacco Campus, Bay 7, Durham, NC


State Senator Josh Stein of Wake County for his commitment to expanding protections for homeowners, consumers and low-income families throughout North Carolina

State Representative Angela Bryant of Nash County for her work to improve NC's systems of civil, criminal and juvenile justice, fight poverty, promote economic development and affordable housing, and secure equal rights for women and people of color

Democracy North Carolina for fighting to protect voting rights, increase voter participation and reduce the influence of big money in politics

The law firm of Elliot, Pishko and Morgan of Winston-Salem for two decades of effective and passionate advocacy for workers' rights and civil rights

Coalición de Organizaciones Latino-Americanas (COLA) of Asheville for their work improving the lives of workers and families in Latino communities in western North Carolina

Community Success Initiative for empowering and giving hope to people released from incarceration and helping them access the services and opportunities they need to build new lives


UNEVEN JOBS RECOVERY: Unemployment rate worse for African-Americans

The Great Recession and the subsequent unemployment faced by many North Carolinians has hit one group of citizens particularly hard.

According to a new report by the Economic Policy Institute and the NC Budget & Tax Center, African-Americans face an unemployment rate that is nearly double the rate for white North Carolinians. An “uneven jobs recovery” has led to a disparity that is particularly noticeable in North Carolina—the state’s African-American population suffers from higher unemployment than African-Americans nationwide.

The study shows that North Carolina has the seventh-highest African-American unemployment rate among the 22 states evaluated. The rate rose from 8.1 percent at the beginning of the Great Recession to an average high of 17.2 percent in 2010, nearly twice the 8.6 percent rate for white North Carolinians. The average rate for African Americans across the country is 15.9 percent.

PROTESTING BUDGET CUTS: Slashing funds puts NC back in time

Two events this week will highlight the ways that current proposals for House budget cuts will strip North Carolina of its most vital resources—and could even send the state back in time.

This morning, the Back In Tyme Budget Players will arrive at the NC General Assembly in a horse and buggy, demonstrating how slashing funds for education, health care and job creation sets North Carolina back decades. Performing in appropriate period dress, the players will send the message that North Carolina can’t afford to go back in time with fewer teachers, firefighters and mental health workers.

With joblessness already near 10 percent in the state, a cuts-only approach to the budget that fires tens of thousands of workers who educate children and keep communities safe is the wrong approach for North Carolina. For more information about the event, visit and join the players on W. Jones Street at 11:30 a.m. to protest a backwards budget.

This afternoon, the North Carolina Association of Educators (NCAE) will continue protests of drastic budget cuts at the One Voice Rally. NCAE will lead a crowd in protest of tens of thousands of educator jobs that are at risk in the new House budget. NCAE members from across the state will speak out about the long-term devastation to North Carolina’s public schools and call on budget writers to avoid additional cuts that would only further delay the state’s economic recovery.

Don’t sit on the sidelines as education in North Carolina takes a brutal beating. Join NCAE at 4:00 p.m. on the Bicentennial Mall. Visit for more information.

CRUCIAL CONVERSATION: UNC President Tom Ross talks cuts

Few public institutions have brought greater acclaim to the state of North Carolina or contributed more to general prosperity over the last century than its world-class university system. But now, as state lawmakers contemplate a new and vastly reduced state budget for the upcoming biennium, the UNC system faces the greatest threat to its health and well-being in decades.

What is at stake in the current debate over the university system budget? What can and should average North Carolinians do and say about the matter? Join NC Policy Watch and UNC President Tom Ross as they discuss these questions at a Crucial Conversation luncheon at noon on Tuesday, May 17 at Marbles Kids Museum in downtown Raleigh.

Tom Ross became president of the 17-campus University of North Carolina System in January, after a distinguished career as a state Superior Court judge, executive director of the Z. Smith Reynolds Foundation, and president of Davidson College.

Click here for more information and to register for the event. 

CAMPAIGN FOR BETTER CARE: Lunch for older adults and caregivers

Older adults, caregivers, and family members: it’s time to tell us what you think about the North Carolina Health Care system.

The NC Justice Center and AARP-NC are co-hosting the NC Campaign for Better Care luncheon in Raleigh on Monday, May 19. The NC Campaign for Better Care wants to build a better health care system that works for vulnerable older adults, and we want your valuable input.

What should we change, what should we push for? Is it more coordination between doctors so you don’t have to answer the same questions over and over again? Or how about an easy way to contact your medical practice and talk to a real person when you have a question? There are lots of suggestions out there. Tell us yours.

The luncheon will be held on Monday, May 9th from 11 a.m.-1:00 p.m. at the Junior League of Raleigh on Hillsborough Street. Visit the NC Justice website for more information and RSVP to Nicole Dozier at or 919-856-2146.


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