MEDIA RELEASE: With too many North Carolinians struggling, now is the time to pass a poverty-busting state budget

Targeted investments would help families climb the economic ladder

RALEIGH (September 17, 2015) – Nearly 1.7 million North Carolinians struggled to make ends meet in 2014, according to new data released today from the Census Bureau, highlighting the need for a state budget that builds a stronger foundation of economic opportunity and addresses the uneven nature of recovery across the state.

Instead, it appears legislative leaders will pass and the Governor will sign a budget that pursues deep tax cuts, making it impossible to adequately invest in poverty-busting programs that would make it easier for people to build a secure future.

One in 5 North Carolinians struggled to afford basic necessities in 2014, living on less than $24,000 a year for a family of four. One in 4 North Carolina kids are growing up in families that can’t give them a good start to life because they make so little. Although there were small improvements between 2013 and 2014, the number of people struggling to pay the bills remains too high, and is holding back our economy and hampering Tar Heel kids’ futures.

The legislative leadership’s proposal to further cut income taxes that primarily benefit the wealthy and profitable corporations, while also expanding the sales tax to new services, would close the doors of opportunity. The tax plan will cause taxes to slightly go up, on average, for many people living in poverty, while blocking pathways to greater economic success like public schools—without boosting the economy or creating jobs.

“Instead of making adequate targeted investments that will reduce poverty and build a stronger economy for all, policymakers are using the tax system and the state budget to bulldoze the infrastructure of opportunity,” said Tazra Mitchell, a policy analyst at the Budget & Tax Center, a project of the NC Justice Center.

The new Census data shows North Carolina’s off-kilter economy and policymakers’ decisions to cut back on vital supports for working families are keeping poverty high, wages stagnant, and income inequality widespread.

• North Carolina’s poverty rate is 1.7 percentage points higher than the U.S. rate, and has the 12th highest poverty rate in the nation.
• The state poverty rate (17.2 percent) declined by seven-tenths of a percentage point over the last year but remains 20 percent higher than 2007 when the Great Recession hit.
• The state’s median income ($46,556) remained statistically unchanged, meaning there has been no progress in raising middle class living standards for the average North Carolinian since 2007.
  More than 7 percent of North Carolinians live in extreme poverty, which means they live below less than half of the poverty line—or about $11,900 a year for a family of four.
• Child poverty did not improve over the last year, and children continue to have the highest poverty rate (24.3 percent) compared to other age groups. One in 4 children live in poverty compared to 1 in 10 older adults.
• People of color are much more likely to struggle below the poverty line: 33.6 percent of Latinos, 27.9 of American Indians, and 26.5 percent of African Americans live in poverty while 11.6 percent of non-Hispanic whites live in poverty.
• Women face higher poverty rates than men, 18.6 percent compared to 15.7 percent, respectively.
  North Carolina’s progress is hampered by fiscal policies that fail to build the foundation for North Carolina’s future economic success. State lawmakers have yet to rebuild what was lost during the recession. Throughout the economic recovery, they have either made deep cuts to or provided inadequate investments for early childhood development, public schools, the UNC System, and nonprofits promoting job and business development in the state’s economically distressed areas. These are key services that invest in people’s future and build a strong economy that offers all families the opportunity to thrive.

Lawmakers have also dismantled services that help people get back on their feet when they are struggling, including unemployment benefits, job training programs, and the Earned Income Tax Credit that lets parents keep more of what they earn so they can better avoid raising their children in poverty.

“North Carolina needs policies that create equal opportunity, rebuild entryways to expand the ranks of the middle class, and ensure that prosperity is broadly shared so that all North Carolinians can reach their potential,” said Alexandra Sirota, Director of the Budget & Tax Center.

FOR MORE INFORMATION CONTACT: Tazra Mitchell, Tazra@ncjustice.org, 919.861.1451; Jeff Shaw, jeff@ncjustice.org, 503.551.3615 (cell).