THE RALEIGH REPORT
September 24, 2014
The 2014 elections are capturing all headlines and overshadowing policy work at the General Assembly, although a few interim committees are studying issues and preparing legislation for the 2015 session Ė and the Governor is working on his budget proposal.
General Election Day is Tuesday, November 4; but, if you are registered to vote, you can get an absentee ballot and vote right now. State law no longer requires requests for absentee ballots to include an ďexcuse.Ē You can download an absentee ballot request form at the Orange County Board of Elections website or go by the office in Hillsborough and pick up one in person.
The deadline to register to vote is October 10; early voting begins on October 23 and closes on November 1. On November 4, polls open at 6:30 am. Polls technically close at 7:30pm; but, if you are in line at that time, you are legally approved to vote.
Donít miss this election. Itís your chance to express your support or opposition to the changes that have been made in Raleigh over the past four years.
The Current and Future State Budgets
Not many people know that four House Republicans voted against the Republican proposed budget that finally passed this year. One of those was the Chair of the House Finance Committee who is also the most senior Republican member of NC House - because "the budget is unsustainable."
One reason for their action was a new analysis by the General Assemblyís fiscal division indicating the tax cuts passed in 2013 were producing greater state revenue losses than predicted. This forced the budget writers to fund some of the teacher pay increase with one-time money. Since those raises will have to be paid next year as well as this year, they should have been funded with a recurring source of revenue.
Itís important to note that the tax cuts to the state income tax are a recurring cut to state revenue. The impact will continue and because most of the benefits of the tax cut went to the wealthiest, the impact will grow as income for the top 10% - 20% continues to grow and the income of the bottom 80-90% continues to be stagnant.
Now, we are hearing that state revenue for the first two months of the State Fiscal Year 2014 -15 is $50 million short of projections. While itís too early to prove a trend, the figure is in line with a prediction made earlier this year by the NC Budget and Tax Center. If the trend continues, the budget for this fiscal year will have to be cut by an additional $300 million to comply with the state constitutional requirement for a balanced state budget.
The General Assembly could make any needed adjustments when we convene in January for the 2015 session. Or, if the trend proves to be true before then, the Governor could declare an emergency and make the cuts himself as authorized by the Executive Budget Act. The State Budget office has already issued a directive to the heads of all state agencies to prepare for a 2% required reversion of funds.
Tax Cuts and the Economy
Meanwhile, another round of tax cuts for the wealthy goes into effect on January 1, 2015. That will remove another $300 million from state revenue needed to pay for essential services.
According to the NC Budget and Tax Center, extensive research on federal and state income tax policy found that tax cuts do nothing to stimulate the economy. ďThe nine states with the highest income tax rates have economies as good as, or in some cases better than, the nine state without a personal income tax.Ē(BTC, May, 2013) What recovery we have from the Great Recession is based primarily on low wage or part time jobs, and we are still about 30,000 jobs short of what we had in 2007.
Regardless of the impact on this yearís state budget, itís very likely the ill-conceived tax cuts will force more program cuts in the next fiscal year. Republicans will still have the majority in both chambers next year and Governor McCrory will still occupy the Governorís office.
In my column next month, Iíll discuss components of a proposal to produce economic growth that will reduce the income gap.
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.