[Editor’s note: The North Carolina Senate is expected to give final approval to its proposed 2017-19 state budget some time very late tonight or early tomorrow. While many details contained in the 361 page bill and the 499 page spending report that accompanies it will not come to light for many days, NC Policy Watch reporters and policy analysts at the NC Budget and Tax Center have been doing their utmost to quickly digest and summarize the proposal. The following BTC Brief and the blog posts listed below it provide excellent summaries of both “the big picture” and many of the details that have emerged as of this afternoon. Be sure to check back in the hours and days ahead at NC Policy Watch and The Progressive Pulse blog for up-to-the minute coverage.]
N.C. Senate would have state stand still in face of uncertainty, growing needs:
Senate’s proposed state budget misses opportunities to build an economy for all
By Alexandra Sirota
The $22.9 billion state budget proposed by the Senate for the upcoming 2018 fiscal year and the $23.4 billion budget for the following year reflects an aggressive pursuit of tax cuts for the wealthy and profitable corporations in spite of increased uncertainty around federal funding to North Carolina and growing unmet needs in communities across the state.
The Senate has been a strong proponent for the flawed limits of arbitrary formulas to guide their budgets. This year, they have continued to use artificial constraints that don’t reflect the reality for families, businesses or communities by keeping year over year spending growth to 2.5 percent over last year. These figures fail to reflect the reality of delivering public services; for example, the cost of medical care alone has grown by 3.8 percent over the past year. Moreover, the Senate budget fails to fully address the unanticipated damage from Hurricane Matthew, which is estimated at $2.8 billion, and does not invest in skills training, community economic development and services to poor families, even as communities continue to struggle with mass job loss and high poverty rates.
Senate budget proposal would continue the decline in our state commitment to each other
The Senate budget would continue to move away from historic levels of investment relative to the state’s economic health. The 45-year average of state investments as a share of the economy is 6 percent, which has allowed North Carolina to sustain the foundations of its economy and make transformative investments in early childhood and career training, for example. Under the Senate’s proposed biennial budget, the level of state investments would remain below that 45-year average: In the first year, investments are 5 percent as a share of the economy, and it drops to 4.9 percent in the second year.
The Senate is constrained by the tax choices made since 2013 that have resulted in $3 billion less in annual revenue than would have been the case under the old tax code. These tax cuts have largely benefited the wealthy and profitable corporations. The Senate has chosen to add to that loss by continuing to deliver income tax cuts that will primarily benefit the wealthy and profitable corporations in the latest budget proposal. Under their tax plan this year, the personal income tax rate will drop to 5.35 percent on Jan. 1, 2018, and the corporate income tax rate will drop to 2.75 percent by Jan. 1, 2019.
This week will present a compressed timeline for the full review of the budget and will likely mean the full context and implications of investment and policy choices contained in the budget will not be revealed or debated. This stands in direct conflict with how good government should work – making sure that people have the opportunity to engage with the proposals being considered and that the evidence regarding policy choices is presented and debated.
Here are some topline points on how the Senate will pay for its budget and what proposed increased investments mean relative to needs in communities:
Click here to continue reading the remainder of this BTC Brief…
From The Progressive Pulse:
- NC Senate budget fails low-income housing, military and veterans; eliminates public sector jobs
- Senate budget misses the mark in post-secondary education
- Analysis: In Senate budget large farms win, small farms and the environment lose
- Absurd “special provision” emblematic of Kafkaesque Senate budget
- Senate’s budget continues to underinvest in public education
- In Senate budget committee, disagreement on health and retirement funding
- Senate budget snubs Raise the Age funding; eliminates money for emergency, special judges
- Quick hit: Senate’s environmental budget cuts key positions, services at DEQ
- Senate teacher pay proposal fails both beginning and experienced teachers