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THE RALEIGH REPORT

September 21, 2015

On Friday, September 18, Governor McCrory signed into law the 2015-16 State Budget that was supposed to have gone into effect on July 1. Multiple, major disputes between House and Senate Republicans produced a contentious negotiation process and final product that continues to unravel the progress of the past 50 years.

First the good news: The budget provides funds to lower first grade class size from 17 to 16; increases public school funding for textbooks (that is still about half the amount spent pre-recession), digital resources and connectivity. UNC system enrollment growth is fully funded. It expands foster care from age 18 to 21 and provides new money for local health departments to improve birth outcomes. The medical tax deduction for State income is restored with no cap; the historic preservation tax credit is restored to expire in 2020; funding for the Rural Center and the Film and Entertainment grant fund are partially restored. Republicans repealed their requirement to count the incomes of non-parent caregiver relatives when determining a child’s eligibility for child-care subsidy. They decided not to eliminate teacher assistants or driver education.

The original House budget was good enough to win support from 32 of the 45 House Democrats; but most Democrats voted against the final version because House negotiators caved on too many issues. The original 2% across the board pay raise for teachers and state employees ended up as a $750 one-time bonus for everyone except teachers in their first five years who were bumped up to $35,000/year from $33,000/year. For a standard 40-hour week, $35,000/year amounts to about $17/hour. A living wage for a 1 adult, 1 child North Carolina family is $20/hour or more.

While, I support opening 72 more mental health beds at Central Prison and setting up 8 mental health clinics at other prisons, we could get a better deal and serve more people by expanding Medicaid to cover childless adults up to 133% of the Federal Poverty Level (FPL). That would let us use the same state funds for Medicaid match to draw down two federal dollars for every state dollar invested and triple the funding for community based mental health services that would keep many of the mentally ill out of our judicial system. As it is, we send our tax dollars to other states to pay for their Medicaid expansion and use more of our own tax dollars to pay for mental health services in prisons.

Republicans claim to have fully funded K-12 enrollment growth; but that’s based on last year’s budget. We still have 2,500 fewer teachers and 7,100 fewer teacher assistants than in 2009 and the per-pupil funding is still $877 less than in 2008. In addition, Republicans sent another $14 million to private schools through the school voucher program. Child-care subsidy is funded at last year’s level; but we are now serving only 71,000 children with 31,500 on the waiting list. In 2005 we served 104,500 children and had 19,000 on the waiting list. No consideration was given to providing extended-day child care subsidy for students aged 6 to 12 or to restoring the Earned Income Tax Credit. The budget raised Community college tuition another $4/credit hour bringing the total increase since 2008 to a whopping 81%.

The budget phases out funding to clean up leaking underground storage tanks, caps the light rail money for Orange and Durham Counties at $500,000 and directs the rest of the $140 million in the transit account to other rail or airport projects.

The Republican’s theory that tax cuts create more jobs isn’t working. With 3 rounds of tax cuts, our recovery is one of the slowest in the nation, unemployment is growing faster than employment and there are 60,000 plus more North Carolinians looking for work today than before the recession. The Budget and Tax Center writes that in 2013, an hour’s work in North Carolina was $2.50 less than the national average. Today that gap is almost $3.00.

This budget was balanced on a tax package that includes another round of personal income and corporate tax cuts that are offset by levying a sales tax on the installation, maintenance and repair of tangible personal property items that are already subject to the Sales Tax – a hit on middle and working class consumers. Buy a refrigerator, pay a sales tax; have it installed, pay a sales tax; have it repaired, pay a sales tax.

After combining all the income and sales tax changes passed this year, taxpayers making $12,000/year will see a tax increase of about $7; taxpayers making $1million/year will see a tax decrease of $1,800. The Budget and Tax Center calls it the “upside-down” tax system. If we really want to put more money into the pockets of hard working Americans, let’s restore the Earned Income Tax Credit.

This budget exposes the Republican agenda of helping the wealthy at the expense of working and middle class and undermining the future economic and social wellbeing of all North Carolinians. I voted NO.

As always, thank you for your support of my work in Raleigh as your representative. Please let me know of your position on issues, your suggestions for legislation and your requests for help.

Verla Insko

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Verla Insko, NC House · 300 N. Salisbury Street, Room 502 LOB · Raleigh, NC 27603-5925 ·
Phone (919) 733-7208 · Mobile (919) 618-9889 · E-mail verla.insko@gmail.com or verla.insko@ncleg.net