New report shows how tax cuts and a failure to prioritize public investments have bulldozed pathways to economic opportunity
RALEIGH (March 2, 2015) – Governor McCrory’s budget is anticipated as early as this week. The choices made in this budget will either allow the state to help rebuild pathways to economic opportunity or continue to reroute badly needed resources for that endeavor to the state’s wealthiest taxpayers and companies, said a new report from the Budget & Tax Center, a project of the NC Justice Center.
“There is a great deal at stake in this budget debate, including how North Carolina can ensure an infrastructure of opportunity across our state,” said Alexandra Forter Sirota, director of the Budget & Tax Center. “Unfortunately, policymakers are bulldozing that infrastructure through a series of harmful policy choices.”
In recent years, lawmakers failed to prioritize public investments, instead enacting tax cuts that primarily benefit the wealthiest North Carolinians and profitable corporations, the report said. The tax giveaways implemented in 2013 will cost the state $1 billion annually. Due to those tax cuts and a slow economic recovery, the state simply doesn’t have enough revenue to make investments that will help grow our economy and promote financial stability for families.
Despite claims that the state is experiencing a revenue surplus, the reality is that the last two years of the last biennial budget have seen revenues fall short of expectations. Year over year growth in the next two years is also projected to remain sluggish resulting in ongoing challenges in meeting the needs of the state’s economy.
Since the start of the Great Recession, state leaders have made cuts in every department of state government, gravely hurting the quality and efficiency of public services such as public education and health and human services. In recent years, such cuts were made in order to pay for the tax package. Any more cuts to those areas of the budget would only further erode the infrastructure of opportunity. Unfortunately, revenue is coming in below projections in the current fiscal year, leading to a shortfall that must be addressed this spring.
If the state had invested at the same level as a part of the economy as it did before the Great Recession, North Carolina would have an additional $3.2 billion to invest this year, the report said. This money could have placed children in early education programs, allowed graduating seniors to enroll in post-secondary education at no cost, and provided health care to older North Carolinians. By raising revenue, North Carolina could reinvest in its people and communities, simply by providing adequate funding to the programs that have enabled generations of Tar Heels to work their way to better lives.
“Raising more revenue is essential, and it must be done in a way that doesn’t hurt low- and moderate-income families who are struggling in a labor market dominated by low-wage jobs and little opportunity to move into the middle class,” Sirota said. “Reversing the tax cuts passed in the 2013 legislative session would be a smart way to begin fixing North Carolina’s revenue problem.”
The full report can be found at this link: https://www.ncjustice.org/publications/raising-the-bar-what-we-should-pursue-in-the-2015-2017-biennial-budget-process/
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