NC JUSTICE NEWS: Tax Credits for Working Families + Take Action on Health Exchange + A Disastrous Idea Returns

May 24, 2011

UNEMPLOYED HELD HOSTAGE: The benefits stand-off continues

The number of jobless North Carolinians who have lost their unemployment benefits because of a legislative stalemate is growing.

According to the NC Employment Security Commission, 2,100 individuals exhaust their existing unemployment benefits each week in the state. It's been four weeks since the initial 37,000 workers lost their benefits, so that's another 8,400 people, for an estimated total of 45,400. If the stalemate holds, the maximum number of affected people could be 60,100 on July 1.

This egregious delay is a disgrace for the lawmakers who were elected to protect the interests of their constituents and an affront to the thousands of families whose lives have been derailed due to political posturing. There will only be more citizens joining those ranks as long as legislators continue to deny benefits to North Carolina's unemployed workers.

TABOR: An idea that's a proven failure

Think this year’s proposed spending cuts are bad? There’s a bill now in the House’s Judiciary Subcommittee A that would make this slash-and-burn budget process an annual event.

The bill, with the disingenuous name Taxpayer Bill of Rights or TABOR, would put an artificial limit on public investments that would cripple the structures essential to rebuilding North Carolina’s economy. The bill would limit growth in state spending to “population growth plus inflation.” Here are top three (there are many more) reasons why TABOR would be disastrous for North Carolina:

  1. It would make the current fiscal crisis permanent. State revenues are way down as a share of state personal income, and TABOR would lock that shortfall in place.

  2. The costs of some budget items – like health care and education – increase more quickly than inflation. So the only way to keep within TABOR’s limitations would be to make cuts to such public investments year after year after year.

  3. Colorado, which had TABOR for more than a decade before voters decided to stop it, had to make such dramatic spending cuts that it is now near the bottom of national lists regarding investments in public education, colleges and university, and health care.

TABOR would be a disaster for North Carolina, literally robbing its citizens of everything that makes this state great.

WORKING FAMILIES : How the EITC builds a strong middle class

There's been a lot of talk about cutting taxes this legislative session. But some legislators want to increase taxes on working families by scaling back the state Earned Income Tax Credit, which is an effective tool for building North Carolina’s middle class and bolstering local economies.

A new report from the NC Budget & Tax Center shows how three state tax credits – the Earned Income Tax Credit, the Child Tax Credit, and the Child and Dependent Care Tax Credit – effectively support work and promote healthy childhood development, both of which expand opportunity for working families.

The credits put money into the pockets of hundreds of thousands of families. In addition, they spur economic activity, as all of the money from the EITC and some of the money from the other two credits go to low- and moderate-income families, who are more likely than wealthy families to spend the money in their local economies. In short, the credits have wide-ranging and long-term benefits for both the state and the individuals utilizing the credits.

Although the tax credits don't add significant complexity to the tax system, they do build and strengthen North Carolina’s middle class. They’re cost-effective, encourage their beneficiaries to work and promote a thriving middle class for the state. But some legislators want to cut these credits so that money can go to corporate shareholders around the world. Unbelievable.

UNC BUDGET CUTS: President Tom Ross reveals harsh reality


UNC President Tom Ross recently revealed just how much budget cuts to the UNC system will directly affect an already vulnerable, pivotal state institution. At last week’s Crucial Conversation luncheon, held by NC Policy Watch, Ross stressed the importance of a four-year degree in an increasingly competitive job market. “Being educated matters,” Ross said.

Yet Ross worried that North Carolina was already headed toward a problematic education model that included high tuition and low financial aid. Tuition within the UNC system has gone up 39 percent in the last three years, Ross said, and this is the fifth year in a row that UNC has received budget cuts.

The UNC system has already eliminated 900 positions and more than a 1,000 class offerings across the state. The 15 percent budget cuts currently under consideration in the General Assembly would eliminate another 3,000 jobs and 11,000 class offerings in the UNC system. In addition, UNC would be unable to keep up with financial aid growth, falling $70 million short, and the 60 percent of UNC students that rely on financial aid would thereby receive less funding for their education.

These are staggering numbers across the board, and they show just what’s at stake for students and the future of North Carolina. "It's our state, our universities,” Ross said. “They're a public asset that's crucial to our future."


RACIAL JUSTICE ACT: Repeal would strip protections for defendants

It seems almost fitting that House leaders bent the rules last week to consider a repeal of the Racial Justice Act, which provides safeguards to make it less likely that race will play a role in deciding who is sentenced to death.

The General Assembly passed the Racial Justice Act in 2009 in response to compelling evidence from several studies that proved racial bias infects the justice system, especially when it comes to the capital punishment. But House Majority Leader Paul Stam and other opponents of the Racial Justice Act don't want to talk silly things like research or facts. They instead want to take away the hard-won right of people on trial for their lives to present evidence that race played a role in their case.

The House committee considering the Racial Justice Act was scheduled to discuss a House bill Wednesday that would repeal it, but Stam presented an unrelated Senate bill instead, one he gutted and replaced with the provision for repealing the act. That may not sound like a big deal, but it means that if the legislation passes the House, members of the Senate will have no opportunity to change it.

The fight for the Racial Justice Act is about fairness and justice and doing everything we can to make sure that race does not determine who lives and who dies in North Carolina’s criminal justice system. It ought to be incomprehensible that anybody is against that. But sadly, it is not that hard to believe this year.


HEALTH EXCHANGE: We need your voice!

The passage of the Affordable Care Act was a historic policy victory – really, a victory of common sense and commitment to the common good. And some North Carolina’s legislators are doing everything they can to screw it up.

The federal law puts much of the power to implement health reform into the hands of states, which makes sense. Allowing states to lead the way gives the nation 50 opportunities for innovation (look at Vermont, which is using the reform to create a single-payer system). It also allows state leaders to make sure the new system meets the needs of their constituents. Unless, of course, the only constituent they care about is big insurance companies.

That is what’s happening in North Carolina. The state’s biggest insurer, Blue Cross NC, crafted House Bill 115 to secure as much power as possible in the new health exchange, which the state must create as part of the reform law. Legislators who support the law are abandoning their responsibilities to their true constituents—who will lose power and protections under the bill.

We fought too hard to secure health care reform to watch it be undermined by one bad bill.


CAROLINA ISSUES POLL: Voters oppose cuts-only budget approach

North Carolina voters oppose a cuts-only approach to the state budget and support voting on the unemployment benefits bill currently languishing in the General Assembly, according to new poll results released this week. NC Policy Watch joined forces with polling firm Public Policy Polling to question nearly 800 voters on a wide variety of current issues, including the state budget shortfall, university cuts, unemployment benefits, gun laws, and the health exchange.

Overall, voters continue to voice great skepticism about the “cuts-only” approach favored by legislative leaders for addressing the state budget shortfall. Only 31 percent of responders favored a “cuts-only” approach, with 46 percent of voters favoring some combination of cuts and revenue-increasing initiatives. In addition, nearly half of the voters said they felt a 15 percent cut to the state university system would harm the quality of education in North Carolina.

More than half of the voters rejected the approach of legislative leaders to link the extension of expired unemployment insurance benefits to the 2012 budget, saying that they support keeping the issue separate from the budget debate.

For the complete poll results, including voters’ opinions on the health exchange and current gun laws, visit the NC Policy Watch website.


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