McCrory’s budget proposal ignores need for investments in families, communities

RALEIGH, NC – March 13, 2015 – (RealEstateRama) — Governor McCrory released a budget proposal last week that chooses fiscal austerity over reinvestment in public education, health, safety and other building blocks of a strong economy, according to a new report from the Budget & Tax Center, a project of the NC Justice Center.

The budget continues austere budget and tax policies that will only further impede North Carolina’s ability to create broadly shared prosperity for all North Carolinians, the report said. Although North Carolina’s economy is slowly growing, there are still too few jobs for everyone who wants to work, poverty persists at elevated levels, and middle-class incomes are lower today than they were before the recession. It will require a major change of direction to put the state back on the road to recovery, including moving away from recent tax cuts.

”The sixth year of the economic recovery should bring about reinvestment in the building blocks of a strong state economy, not retrenchment,” said Tazra Mitchell, BTC policy analyst and author of the report. “It is time for the governor and state legislators to reset the fiscal debate—abandon austerity and raise the bar through smarter budget and tax policies.”

Unfortunately, McCrory’s proposal does just the opposite by keeping the tax plan on the books and foregoing $1 billion each year in investments in early education, public health and other core services. Under his 2016 fiscal year budget proposal, total state investments would be 6.1 percent below pre-recession levels. This is not an approach that North Carolina’s leaders followed after previous recoveries, the report said, because they knew investments were what helped grow a strong economy.

The governor’s budget proposal fails to restore programs that were cut since the recession, the report said. There would be 8,000 fewer at-risk four-year-olds with access to pre-kindergarten under the Governor’s budget compared to the peak in 2009. It would also double down on tuition increases in community colleges, and provide just half of the funding boost needed to sustain the courts.

McCrory’s self-described “tight budget” could have been avoided, the report said. The governor signed into law deep tax cuts in 2013 that have proven even costlier than originally anticipated. Now there are too few dollars available to meet the needs of children, families, and communities despite a rebounding economy.  Revenues are slowly growing as the economy improves but year-to-year growth remains below the historical average. Failing to raise adequate revenues will continue to put the state’s economy on shaky ground, the report said.

“The state budget plays a critical role in building foundations of opportunity and promoting vibrant economies in communities throughout North Carolina,” Mitchell said. “But Governor McCrory’s budget proposal, overall, represents a troubling lack of commitment and misses a critical opportunity to reinvest at a meaningful level so that all North Carolinians can thrive. Such shortcomings will continue to be a problem until he recognizes the damage the 2013 tax plan is causing and take action to correct it.”

FOR MORE INFORMATION CONTACT:
Tazra Mitchell, Tazra (at) ncjustice (dot) org, 919.861.1451; Jeff Shaw, jeff (at) ncjustice (dot) org, 503.551.3615 (cell).