January 11, 2011

STATE BUDGET: It's worse than the worst-case scenario

The state legislative session begins on January 26, and the latest revenue numbers show North Carolina faces a $3.7 billion budget shortfall. Legislators and the governor say they're going to severely cut state services and lay off thousands of workers in order to balance the budget.

But even the worst-case budget cut scenario—10% cut for education and 15% for all other state agencies—will come up $1.1 billion short of closing the gap. In addition, these cuts would put more than 21,000 people out of work, causing increases in the state’s unemployment rate and in the demand for state services as the families of these former public servants find themselves facing hunger and homelessness. Such deep cuts would sink the nascent economic recovery.

Raising new revenue is essential and, frankly, unavoidable. Closing tax loopholes for corporations, fixing the state’s outdated and unfair sales tax, and requiring the rich to contribute more through the state income tax are three sensible suggestions to get us started.

• NC Justice Center: BTC Brief - Worse Than Worse Case? Even Governor Perdue’s worst-case cuts will still require more revenue
• NC Justice Center: BTC Brief - Jobs, Jobs, Jobs: A cuts-only approach will impact public structures, North Carolina’s workforce
• Triangle Business Journal: Treasurer Cowell calls for fewer N.C. tax credits, exemptions
• Raleigh News & Observer: Let's look at the tax loopholes
• Progressive Pulse: A cuts-only approach without raising revenue doesn't work
• Asheville Citizen-Times: NC universities asked to make even larger budget cuts
   

LEGISLATIVE BRIEFING: In Raleigh on January 17 -- RSVP Today!

HEALTH REFORM: Will NC lawmakers give up tax-funded insurance?

The new Republican leaders in the NC General Assembly are calling for a resolution opposing the federal health reform law. It’s strange that they want to take away from older adults the 50% discount on brand-name drugs in Medicare, take away from parents the ability to keep adult children on their insurance plans up to age 26, eliminate the new affordable high-risk pool for people with pre-existing health conditions, and get rid of the requirement that health insurers spend at least 80% of their premiums on actual health care services.

Stranger still is that none of these legislators have called for the state to stop providing free taxpayer-subsidized health coverage for all members of the General Assembly, who are only part-time state employees. They’re also not calling for an end to letting legislators buy into the State Health Plan at the basic rate after they leave the General Assembly, a valuable perk for those who are older or have pre-existing health conditions.

• Progressive Pulse: Will NC state legislators who vote against health reform give up their own free taxpayer-funded health coverage?
• WRAL: NC GOP lawmakers want to send message on health reform

Thanks to the health reform law, a growing number of small businesses are signing up to provide health benefits for their workers. Major insurers around the country are reporting the increase. An article this weekend from Tribune Newspapers reports, "In the six months after the law was signed in March, UnitedHealth Group Inc., the country's largest insurer, added 75,000 new customers who work for companies with fewer than 50 employees." Small-business owners are seeing the value of the tax credit that's included in the reform law, and their employees are now getting this important benefit.

• Raleigh News & Observer: Health coverage expands among small businesses
• Forbes: More small businesses offering health care to employees thanks to Obamacare
• Progressive Pulse: Public does not support repeal

SCHOOLS: Oversight committee wants more lottery $ for education

North Carolina’s Lottery Oversight Committee says not enough of the lottery’s proceeds are going to education. The committee, which advises state legislators on the lottery’s operations, sent a letter to the outgoing leadership of the General Assembly advising that state leaders require the NC “Education” Lottery to return to sending 35% of its proceeds to education.

That 35% was the original formula, until a legislative loophole inserted in 2007 let lottery officials steer more money into prizes. Only 29% of proceeds went to education last year.

Lottery officials said bigger prizes would mean more players and, ultimately, more money for education. But that argument didn't satisfy committee members. They also took issue with $35 million the legislature and Gov. Perdue took from the lottery to pay for expected Medicaid expenses.

• Progressive Pulse: Lottery Oversight Committee -Schools need more money
• NC Policy Watch: Hope and hard luck
• NC Policy Watch: Scratch and shift - NC lottery giving education smaller share

JULIA BICK: The loss of a great and passionate advocate

Advocacy organizations throughout North Carolina are mourning the loss of Julia Bick, who served as housing coordinator for the NC Department of Health and Human Services. She dedicated her career to expanding permanent and affordable housing opportunities for people with the most significant and long-term disabilities. In a poignant coincidence of events, Julia died just hours after President Obama signed the Frank Melville Supportive Housing Investment Act of 2010 into law. It was Julia's vision and relentless efforts that led to the creation of the North Carolina model of integrated supportive housing – and ultimately to the innovations in the Melville Act. Along with Frank Melville, this groundbreaking legislation, which resurrects HUD’s Section 811 Supportive Housing for Persons with Disabilities program, is Julia’s legacy.