Damning report documents new state budget’s inadequacy, lack of vision

By: - July 27, 2016 12:30 pm

budgetdealIt’s been nearly two weeks since Governor McCrory signed the 2017 state budget into law and most North Carolinians can probably be forgiven if they haven’t given the matter a whole of lot of thought in the interim. Fortunately, however, some people have been giving the matter a lot of thought and consideration – most notably, the experts at the North Carolina Budget and Tax Center. While many others have been enjoying vacations and a break from the Legislative Building wars, BTC analysts have been poring through the details, crunching the numbers, developing projections and comparisons, uncovering hidden policy decisions and just generally getting a complete handle on what it is that state leaders have left us with.

Unfortunately and not surprisingly, their findings have not been encouraging. As BTC Director Alexandra Sirota observed in her preliminary take on the budget earlier this month:

“A budget is the set of choices our policymakers make to lay a foundation for North Carolina’s future. Will it stand future tests of economic challenges and opportunities? Will it extend to every corner and household of our state? The answer for this budget is that it will not.

For those who say this is as good as we can get, the reality is we can do better. Our leaders have chosen to limit our sights.”

Now, sadly, after having had a few weeks to review and dissect the 200-plus page document and its many accompanying documents, Sirota and her colleagues Tazra Mitchell and Cedric Johnson have only confirmed the substance of that initial conclusion. This is from the Executive Summary of the BTC’s new and detailed report “2017 Fiscal Year Budget Falls Short of Being a Visionary Plan for North Carolina’s Economic Future.”

“North Carolina lawmakers approved a 2017 fiscal year state budget that falls short of being a visionary plan for the state’s future. The pursuit of a rigid spending formula combined with another round of tax breaks prevented lawmakers from proposing an adequate budget, let alone a bold one.

These new tax breaks come on top of recent tax breaks, which together are projected to cost more than $2 billion annually once fully implemented. These are resources that the state will not have for public education, affordable housing, the court system, and other vital services that help children, families, and communities thrive. Instead, these multiple rounds of tax breaks will primarily benefit the wealthy and profitable corporations who are already doing well in today’s uneven and weak economic recovery.

The $22.34 billion budget that lawmakers enacted reflects their limited aspirations for North Carolina, increasing spending by only 2.8 percent, or $606.7 million, over 2016. While the budget reinvests in some worthy programs and services, these additional investments represent a small fraction of what is needed to boost economic opportunity and help North Carolinians doing their best to get by—North Carolinians like the children stuck on persistently long waitlists for early childhood education, jobless workers facing too few jobs and job training programs, and older adults going without the in-home and community support that they need.

This slight year-to-year increase in investments is below the historical average, and it is too small to operate core public services, catch up and keep up with the needs of a growing state population, and substantially address the persistent challenges in ensuring that every community has access to opportunity. The reality is that without additional tax giveaways to the wealthy and powerful, much more could have been possible to improve North Carolinians’ quality of life and to build a stronger, more inclusive economy for all.”

The bottom line: The new state budget is the latest in an ever-lengthening series that continue to underinvest in North Carolina’s essential structures and services and abet the demise of middle class prosperity. The new BTC report is not a happy read, but it’s one that deserves the close attention of all who care about our state and its future.

Click here to read the full report.

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