NC JUSTICE NEWS: Predatory Payday Lending + Protecting the EITC + Sequestration in NC

February 26, 2013

PAYDAY LENDING: Majority of North Carolinians oppose harmful bill

Thanks to a bill introduced by lawmakers, predatory lending could soon return to North Carolina — permitting loans of 390 percent interest and opening the door for harmful payday lending in North Carolina. But new polls show incredibly low levels of support for Senate Bill 89.

When asked if it would affect their vote if their state legislator supported a law to legalize payday lending, North Carolinians said that it would. Responses to the question “would that make you more likely or less likely to vote for that legislator, or would it not make a difference?” broke down like this: 72 percent said it would make them “less likely” to vote for the lawmaker supporting the bill, while 19 percent said it would not make a difference.

Public Policy Polling found that only seven percent of North Carolinians support the push to legalize payday lending in North Carolina, compared with 73 percent who would like to see current lending limits remain intact. Current law allows interest rates of up to 54 percent, but a new bill, Senate Bill 89, would allow payday lenders to charge an annual percentage rate well above 300 percent.

Payday lending is one of the most harmful forms of lending in existence. This bill would let high-cost predatory lending back into North Carolina when there is no policy justification to do so and an overwhelming majority of North Carolinians oppose such legislation.

EARNED INCOME TAX CREDIT: Bill could reduce value of critical support

On Wednesday, the Senate Finance committee will hear House Bill 82 which reduces the value of the state Earned Income Tax Credit. Now more than ever, the more than 900,000 North Carolina taxpayers who work and receive this credit need this modest yet critical support.

A cut in the state EITC or its outright elimination would result in a tax hike on low-earning families. The state EITC provides workers earning low wages with a credit to offset their total state and local tax contributions. Nearly 907,000 North Carolinians claimed the credit in 2011 in each of the state’s 100 counties. These North Carolinians work, pay taxes, and would be directly affected by the reduction or elimination of the EITC.

In light of the other tax decisions being considered by the Senate, the Earned Income Tax Credit must be extended as part of tax reform as a critical tool to address the upside-down nature of the state's tax system and proposals that would benefit high-wealth North Carolinians. Eliminating one of the state's most powerful antipoverty tools at a time when the state has the 13th highest poverty rate in the nation could push even more North Carolinians into poverty. The EITC is a small investment that ensures hard-working North Carolinians are able to meet their basic needs and avoid raising their children in poverty.

HOME SCHOOLING: Tax credit could harm public schools

The NC House has filed a bill that would provide tax credits for families who home school their children. House Bill 144 will provide $1250 per semester in tax credits for home schooling as long as the student is home schooled 70 days in the semester. The family cannot, among other restrictions, receive if they have been enrolled in public school during any part of the semester where the student was enrolled in public school.

This bill, along with other tax credit bills in the past and soon to come, is problematic. The General Assembly has been planning tax reform so it is in question what tax credits will actually be available. This bill also takes money out of traditional public schools to give to other schools with fewer regulations, not as much oversight, and less accountability.

This is not to say that home schools are not regulated. Home schools are responsible to the Department of Administration Division of Non-Public Education, and must meet requirements for record keeping and standardized testing. They do not, however, have to have qualified teachers or administrators.

If low-income parents want to home school, this is not enough of a tax credit to do so. Like so many tax credit bills, those who need it can't use it and those who use it don't need it.

This is not about opening choice, it is about defunding and closing North Carolina's public schools, which are thriving with high graduation rates and high ranking scores when compared with the rest of the world. Imagine how great they would be if we stopped trying to starve them to death with slashing funding.

SEQUESTRATION: How federal cuts could harm North Carolina

Like the "fiscal cliff" earlier this year, the word "sequestration" has dominated the news cycle lately. $1.2 trillion in so-called sequestration spending cuts are currently set to begin on March 1. If allowed to go forward, defense and domestic federal programs would receive an across-the-board cut of $120 billion in 2013 alone — cuts that would have serious consequences for the North Carolina state budget and local governments alike.

If current levels of sequestration go into effect, North Carolina will see significant reductions in the provision of key services. The cuts to Pentagon spending are estimated to cost North Carolina at least $1.5 billion in defense contracts and as much as 11,000 in job losses, with non-defense cuts expected to harm the state’s economy by eliminating almost 1 million jobs. In addition, the non-defense cuts would reduce the state’s Department of Health and Human Services budget by $35 million and education spending by $84 million.

Instead, Congress should repeal sequestration and replace this misguided policy with a balanced approach to deficit reduction that includes at least one dollar in new revenues for each dollar in spending cuts. Taking such a balanced approach to federal deficit reduction will also help protect North Carolina's budget, which relies on federal domestic appropriations for more than 35 percent of the state’s total budget.

CRUCIAL CONVERSATION: AFL-CIO Secretary Treasurer Liz Shuler

Mark your calendar for an exciting upcoming Crucial Conversation event.

On Monday, March 4 NC Policy Watch and North Carolina AFL-CIO will welcome Liz Shuler, Secretary-Treasurer of the AFL-CIO, for a conversation on unions and "right to work" laws in North Carolina. The state has long been a stronghold of anti-labor union sentiment. It's also a state that features vast economic chasms between have and have nots and in which working families have long struggled to make ends meet and to obtain decent wages and benefits.

Shuler was elected AFL-CIO Secretary-Treasurer in September 2009, the youngest person ever to become an officer of the AFL-CIO. Shuler previously was the highest-ranking woman in the Electrical Workers (IBEW) union, serving as the top assistant to the IBEW president since 2004. Click here to register.
The event will be at the Junior League of Raleigh, located at 711 Hillsborough Street in Raleigh.

CAMPAIGN FOR BETTER CARE: Community event in Albemarle

Join the NC Justice Center and AARP NC on Tuesday, March 19 for a Campaign for Better Care community meeting at the Stanly County Senior Center in Albemarle and make your voice heard on one of the most important, complex issues in North Carolina today.

As the Affordable Care Act is implemented in NC, a crucial part, Medicaid, may be blocked by the NC General Assembly from being expanded so 500,000 currently uninsured working adults in North Carolina will not be able to get coverage. Join us to discuss what suggestions you have for changes in our health care system while you learn from representatives from the US Department of Health and Human Services, AARP, Seniors’ Health Insurance Information Program (SHIIP) and the NC Justice Center.

The free event will be held from 11:30am – 1:00 pm at the Stanly County Senior Center, 283 North Third Street, Albemarle, NC.

To reserve your seat, contact the Senior Center at 704-986-3769 or or Nicole Dozier at or 919-856-2146. Click here for a flyer.


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