The Pulse

We need a better state plan to help the people of NC

By: - February 6, 2021 10:00 am
One Hundred Dollar money bill. Benjamin Franklin with face medical mask. COVID-19 coronavirus USA, Economy world crisis.

On Thursday, the General Assembly passed its first piece of legislation allocating funds that provide a down payment to enhance the state’s vaccine rollout, support elementary and secondary schools, and provide much needed rental assistance.

The legislation adjusts deadlines for certain CARES Act-funded initiatives in 2020, reallocates unexpended CARES Act dollars, and allocates federal dollars passed as part of the legislation passed by Congress in December — but after nearly a year of living in the house that COVID-19 built, a bigger, bolder commitment and plan is needed to ensure the needs of every family are met during this ongoing crisis.

On the very same day, the Governor provided his own proposal for supplemental spending to meet immediate COVID-19 needs, which, while quite modest, would tap into the significant unreserved state dollars available today to meet the urgent needs in communities to go beyond the federal dollars made available through the December legislation.

The $5 billion unreserved balance refers to state dollars that have not been appropriated, and it does not include additional money in the Rainy Day Fund or other special funds. The Governor proposes immediately appropriating 16.5 percent, or $698 million, of the unreserved balance.

North Carolinians agree that our state government needs to go all-in to meet the full scope of needs by fully funding people-first policies. Across a range of issues, North Carolina needs to not only adequately invest in a response that will address the harm facing people across a range of public health, economic, and housing threats but will plan for a long-term recovery that is just. The continuity of support requires increased capacity at public agencies and institutions and a longer-term commitment to adapting and shoring up the systems — from early childhood education to public schools to public health departments — that will need support to ensure the recovery from the COVID pandemic takes hold.

The General Assembly should therefore not only move immediately on the Governor’s proposal but go beyond it to fully address the challenges that are facing families, businesses, and communities as COVID-19 nears the one-year mark

  • North Carolina can clearly afford to do so. The $5 billion in the state’s unreserved balance is about 20 percent of the state’s annual appropriation. That $5 billion doesn’t include the Rainy Day Fund, which is an additional $1.1 billion available for times of disaster and downturns that has not been tapped for the COVID-19 response.
  • The economy is delivering benefits for the wealthy few and profitable corporations and that means revenue is available to invest in an economy that works for everyone. The current balance of taxpayer dollars unappropriated is sitting on the sidelines due to the failure to break the majority’s commitment to austerity. This commitment to underinvestment —arbitrary and cruel — has made our state less resilient in the face of the pandemic and downturn. The balance of taxpayer dollars that have accumulated today is a result of revenue collections not declining as much as anticipated. Corporate income tax collections were up year over year in December while personal income tax collections were also boosted as high-income earners were less likely to be impacted by job loss and jobless workers’ Unemployment Insurance payments from the federal government were taxed. And while more details from the consensus revenue forecast will be available next week, the trends are already clear: corporations have remained more profitable than anticipated at the outset of COVID-19 and high-income taxpayers have already experienced a recovery.

It is these record corporate profits for some businesses — and the recovery of employment for high-income workers and stock market gains for the few — that have combined to make it possible for North Carolina to do better in its work to rebuild the economy.

  • State policymakers must do better. Signs point to an economy in slow down not on the path to recovery. Too many have only seen the harsh reality of a pandemic and downturn that would allow a select few to prosper. Too much hardship persists for too many across our state: Workers earning the lowest income still haven’t seen a jobs recovery, supports have not been sufficient to stabilize household budgets, and the ripple effects are reaching out to landlords, utility companies, and local businesses. Public investments now can provide people with the income to make ends meet and spending in the economy, can stabilize businesses from child care centers to local restaurants, can keep state and local employees working and meeting the challenges facing communities.

There is no time to wait for us all to survive and thrive. There is no time to hope that someone else at the federal level will act to rescue our state from the daily toll of this pandemic and downturn — a toll that is exacted every day on the family that wonders if tomorrow it will sleep indoors or have food on the table or lights to study by. A toll that is paid by the child whose parents may no longer be able to afford early childhood education and care, or who is struggling to keep up with lessons made inaccessible by a lack of broadband and too few staff in our public schools. A toll that is barricading communities from a full recovery because of the loss of local businesses, the challenges facing local governments in making ends meet, and, yes, the loss of civic life and participation.

North Carolina has to commit to rebuilding with greater resiliency after this pandemic and downturn.

It means recognizing that our health and well-being is the foundation of a strong and just economy.

It requires a long-term, collective commitment and choosing to make our tax code adequate and equitable.

It can begin today with the fuller deployment of our current state resources  to the task of rebuilding our state stronger and in ways that are more just.

Alexandra Sirota is the Director of the Budget & Tax Center, a project of the NC Justice Center.


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