Keep North Carolina on the road to recovery: support state fiscal relief
July 30th, 2010North Carolina is strongest when our vital public structures are strongest. Those public institutions - high-quality schools for our children, the public safety officers that protect us, and well-maintained transportation infrastructure - provide the fuel for a thriving economy.
Protecting these critical public investments is the key to a strong middle class, a high quality of life and shared prosperity. The question on all our minds: in the face of a deep economic crisis, how can we best make sure this happens?
We're all in this together. Both state and federal policymakers have a role to play. Now that North Carolina's budget is complete, it's time for the national government to address this national crisis. That means badly-needed fiscal relief for states.
Congress took a step in the right direction recently, finally passing an extension of unemployment benefits. Not only will this help millions of people across the country - and hundreds of thousands of jobless North Carolinians - it will push our economy closer toward recovery.
Putting money in the pockets of struggling families is a quick, effective and common-sense method to stimulate the economy. When people can pay rent and buy groceries, that creates and preserves jobs in our communities.
A study last year found that unemployment benefits helped boost the economy in every single one of North Carolina's counties, bringing billions of dollars into the state. Extending those benefits, albeit belatedly, will provide fuel for our state's economic engine.
Unfortunately, Congress chose to ignore one cost-effective way to stimulate state economies: fully supply states with Federal Medical Assistance Percentage funds. These matching funds for certain state social service, medical and medical insurance expenditures are desperately needed - and would have done immediate good in our communities.
National leaders have to find a new way to stimulate North Carolina's economy. Our state's economic crisis was not inevitable. At the national level, financial regulations that protected us for years were stripped away. This enabled casino-style Wall Street gambling to play games of chance with our economic future. We - all of us - lost those games.
At the state level, for years, we've known that reforming our outdated revenue system was necessary. The revenue crisis North Carolina has suffered hopefully serves as a wake-up call that we need fair, sustainable tax policies that support local small business and our state's middle class.
Soon, we will have to work toward sensible tax reform. For now, it's vital that we work together - on both the state and federal levels - to build a strong economic foundation. That means keeping teachers, police and firefighters employed, and keeping key public services in place.
Our state's residents have experienced the economic crisis in different ways - unemployment and underemployment, home foreclosures, and an inability to afford basic necessities. Unless we maintain public services that are the foundation for a strong economy, we will be unable to help all of those in our state have a more secure future.
These services benefit all of us, just as the national recession has hurt all of us. A national problem requires a national solution. Now is the time for our federal lawmakers to take the next step to infuse states with capital.
The federal government is in a unique position to step in to protect and support the essential public structures currently under siege. Such support will protect millions of jobs nationwide, speed up economic recovery, and secure the public systems essential to our economic future.
The country we all want to live in has strong communities with safe streets, excellent schools, and thriving businesses. If we preserve the public systems that pave the way to our economic future, we can get there together. The first step on that road is federal fiscal assistance to states.
Jeff Shaw is the Director of Communications at the North Carolina Justice Center
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