Now is not the time to further cut income taxes, shift tax load onto working families, the letter reads

RALEIGH (September 16, 2015) — The NC Justice Center sent a letter to Gov. Pat McCrory this morning, calling for the Governor to veto the final budget released Monday evening.

The budget fails to meet the state’s high standards for fiscal responsibility and smart long-term public investments, the letter reads. Now is not the time to further cut income taxes or shift the tax load onto working families.

“At a critical point in the economic recovery, it is time for North Carolina to replace the worst of the cuts made during the Great Recession, ensure our tax code is able to meet the needs of a state seeking to lead in the South and the nation, and consider the smart, sustainable public investments needed to support our competitive position,” the letter reads.

Gov. McCrory’s veto would send a strong signal to lawmakers that a final budget must work to build an economy that works for every community throughout North Carolina. Income tax cuts put critical public investments at risk, and there is no consensus in research that such substantial cuts create jobs or stimulate economic growth.

“Outright elimination of the income tax would require a sales tax rate in the double digits and further shift the tax load onto low- and middle-income taxpayers at a time when they are already shouldering a greater load in taxes as a share of their income,” the letter reads.

The letter outlines specific areas of concern that highlight the fiscally irresponsible nature of this final budget, including the proposed personal income tax rate reduction to 5.499 percent. This would reduce revenue by more than $700 million when fully implemented, posing an unrealistic and unsustainable loss for public schools, universities, public health programs, the justice system, and rural economic development while translating, on average, into very small income tax reductions for individual taxpayers that are offset for many taxpayers in the form of sales tax and fee changes.

The final budget also forgoes opportunities to improve the lives of North Carolinians, the letter reads, by failing to:

  • Remotely return competitiveness to teacher retention and recruitment, return class size to prior ratios nor adequately invest in textbooks, digital materials and instructional supplies;
  • Ensure affordable housing is more widely available for every day moderate-income families at a time that housing costs are outpacing wages;
  • Provide all young children with the opportunities through pre-K and quality child care that ensure they are ready to learn by Kindergarten;
  • Keep skills training at the cutting edge of industry standards despite some good community college provisions and make post-secondary education affordable for all; and
  • Provide for the investment in infrastructure and small business development that can boost rural communities and urban neighborhoods.

“A compromise budget shouldn’t compromise North Carolina’s future,” the letter to Gov. McCrory reads. “We hope that you will veto this final budget and urge legislative leaders to improve North Carolina’s competitive position through smart public investments.”

Click here to read the full letter.

FOR MORE INFORMATION, CONTACT: Alexandra Forter Sirota,, 919.861.1468; Julia Hawes,, 919.863.2406.