While awaiting the House budget proposal, it is worth exploring the shortcomings of the Senate budget proposal, the passage of which marks the first completed step in the process in which the Senate, House and Governor must agree on how to finance the needs of a growing state more than a year after the start of the COVID-19 pandemic.
The proposed budget would leave North Carolina more than $ 7 billion below historic investment levels as a share of the state’s economy for a period of unprecedented and permanent need. The proposal also includes a series of tax cuts that would massively benefit wealthy North Carolina and businesses and their shareholders, and the full impact of lost revenue when the tax changes are fully implemented – although ‘they are not yet fully known – would exceed $ 5 billion per year. .
The Senate’s biennial plan once again chooses corporations and the wealthiest over North Carolina residents, a vision that has yet to result in tangible improvements in a host of areas where people continue to work. be deprived of their full potential and greater well-being. The investments in solid basic education that the state has a constitutional obligation to provide will unfortunately not be met if this plan becomes law, as will the need for our state to finally expand Medicaid to ensure that hundreds of thousands other North Carolinians can receive care when they need it. These and many other opportunities have been missed in this first major step in the budget process, and if the Senate’s ideas are accepted by the House and the Governor, North Carolina will continue on a path detrimental to its people.
- Not progressing towards a solid basic education. The Senate budget does not make significant progress in providing North Carolina students with the education they are entitled to under our constitution, in direct violation of a June 7 court order issued as part of the long Leandro school funding file. This ordinance obliges the General Assembly to fully implement the first two years of a seven-year plan to establish a constitutional education system by the school year 2027-2028. The Senate budget would only fund 13% of the plan, avoiding the evidence-based and court-ordered plan to improve recruitment and retention of diverse teachers and principals, create an adequate and fair financial system, support schools and poorly performing districts. , revise a discriminatory academic responsibility system and create better links with academia and careers.
- Short-term and insufficient funds for equitable preschool education. The Senate budget does not significantly increase investments in NC Pre-K, Smart Start, child care grants or increased salaries for preschool educators and teachers, which is also required by a June 7th. Leandro order of cort. The Senate budget slightly increases the slot funding for NC Pre-K but does not increase the number of slots available. Although it does provide some funding for Smart Start, these funds are one-time, so the system does not receive ongoing investment. State dollars would have provided continued support to North Carolina’s youngest children and their families and would have helped ensure that federal funds lead to transformative change. Instead, the Senate budget relies on funding for the US bailout, which does not meet the long-term needs of our state or Leandro conditions.
- Choose to pass on a key tax incentive to expand access to health care. Senate leaders have failed to address the lack of access to affordable health care for more than 500,000 North Carolina residents. While the Senate plan includes extending full Medicaid benefits to women for 12 months postpartum – rather than the current 60 days of limited Medicaid postpartum pregnancy coverage – this exclusion demonstrates a failure to recognize the link between pregnancy-related and long-term health, as well as the need for all individuals and family members to have access to care whenever they need it. General Assembly leaders also rejected the net estimated at $ 1.2 billion that North Carolina would receive as an incentive to extend Medicaid over two years, made possible by the American Rescue Plan Act.
- Short-term and insufficient support for small businesses. The NC office of Historically Underutilized Companies (HUB) conducted a disparity study in 2020, which found that there were significant disparities in procurement opportunities for HUB certified companies, even controlling for factors. neutral for race (capital, time spent in the company, employees, etc.). The HUB Office does not have the capacity to resolve issues on its own and additional funding is required. Despite the findings of the study, no additional funds were allocated to the HUB Office. The Senate budget includes $ 20 million in US bailout funds for ReToolNC, which provides recovery grants to HUB companies. While useful, these funds will only solve some of the short-term challenges of the pandemic instead of committing state dollars to mitigate the damage to minority-owned businesses and address the underlying systemic issues. that created the disparities.
- Prioritize tax cuts for the rich instead of a targeted, bottom-up tax credit. The Senate budget did not include state tax credits for working families, which would provide an upward tax cut by benefiting low- and middle-income households with incomes no greater than about 57,000 $ for a family with three or more children. Instead, the Senate proposal increases the standard deduction, a provision that would offer 24% of the tax cut to the richest 20% of North Carolina taxpayers. This tax change, in addition to an elimination of corporate income tax and a reduction in personal income tax – which massively benefits the richest – reflects a failure to recognize that people with what they need will lead to a healthier economy.
- Low levels of investment that will exacerbate North Carolina’s housing affordability crisis. Currently, North Carolina is short of nearly 200,000 affordable housing units for tenants with very low incomes, and with 1 in 3 tenants with extremely low incomes spending 50 percent or more of their income on housing. The Senate budget the proposal includes provisions this would change the operations of the NC Housing Finance Agency, making it more difficult for landlords to receive much-needed help, in addition to the lack of additional funds to support the agency. While investment remains low, North Carolina’s affordable housing crisis will continue to worsen as the state’s projected population growth continues to rise.
- Undermine our democracy by weakening the state’s electoral infrastructure. North Carolina is one of many states with Republican legislatures that are proposing restrictions on election administration that would alter the ability of state election officials to deal with election prosecutions – instead giving power to elected officials, including the leaders of the General Assembly. In order to mitigate the impact, the NCGA recommends allocating $ 5 million for mobile programs to help people who will need photo ID, rather than removing ID requirements that disproportionately harm black voters and women.
- One-off funds for environment-related expenses where long-term investments are required. Environment-related spending in the Senate budget primarily takes the form of one-time funding for projects that required at least multi-year or even long-term funding, as well as earmarking for specific projects. While the budget includes an allocation to meet the state’s counterpart for FEMA’s major storm disaster funds this year, it does little to advance the state’s environmental resilience, including including flood management.
- Limited expenses on local reintegration programs and disinvestment in infrastructure and state and local reintegration programs. Funding for reintegration assistance is essential to prevent recidivism for the more than 22,000 people who return home each year from state prisons. The budget does not include adequate funding to support this population, for example by providing limited funds for the diversion and treatment of people with substance use disorders, but by not making additional funds available for the functioning of local reintegration councils, transitional housing programs or vocational training and placement. assistance. Although the budget creates a Justice Reinvestment Council, it must also allocate adequate funding to this entity to carry out the work of reinvesting funds in community reintegration programs.
Kris Nordstrom from the Education and Law Project, Laura Holland and Quisha Mallette from the Fair Chance Criminal Justice Project, as well as Parker Martin and Logan Harris from the Budget & Tax Center, all projects from the NC Justice Center, contributed to this article.