Well, did anyone really expect North Carolina’s General Assembly, in finalizing a new state budget, suddenly to see the light and swerve toward more effective, fairer government? The same General Assembly that for the past five years has embraced a shrunken, warped vision of its proper role?
Nope, we didn’t think so.
The new budget – technically, an update of one that was crafted last summer – is due by the start of the next fiscal year on July 1. All indications are that the deadline will be met, what with the legislature’s Republican leaders eager to conclude the every-other-year “short session” without becoming bogged down in more controversy. (The fallout from House Bill 2 has meant headaches enough.)
In the state House, which was the first to consider budget legislation, the Republican approach even drew healthy support from across the aisle. When the final vote came on May 19, 30 Democrats joined unanimous Republicans in backing House Bill 1030. That left only 12 of the minority caucus’ more liberal members on the short end of the 103-12 tally.
For Democrats who voted yes, the rationale was that this was the best budget they were likely to get – better, they figured, than what’s likely to emerge from the Senate, where conservatives of an even more doctrinaire stripe run the show.
But the lonesome dozen weren’t ready to abandon the arguments they and other progressives have made throughout the tax-cutting, small-government Republican ascendancy.
It’s true that under election-year pressure, and perhaps even embarrassed at how North Carolina continues to lag nationally in teacher pay, House budget writers decided to give decent raises to some teachers in the middle of the seniority range. That would build on raises granted last year to those teachers’ junior colleagues.
The biggest bump, 5 percent, would go to those with 10 to 14 years of experience. In a state that has chronic problems with teacher turnover, boosting mid-career pay would have to help.
Still, budget supporters found themselves boasting that their plan would push the state’s average teacher pay to an underwhelming 38th in the country. That we’d wind up 10 rungs higher on the ladder is cold comfort, considering how far we’ve fallen as pay scales were allowed to languish.
Rep. Larry Hall of Durham, the House’s Democratic leader, summed up the opponents’ critique, as reported by The News & Observer of Raleigh.
Regarding pay for the people whose skill and dedication is essential to high-quality public schools, Hall said, “We do not have a discernible plan to get our teachers and our education personnel to or above the national average. At this rate, we won’t make it there anytime soon.”
And referring to the Republican fondness for tax and spending cuts, he continued: “We artificially starved ourselves. We have funds available, and we decided not to invest.”
The Senate was still wrapping up the details of its budget proposal, expected to be released soon after Memorial Day. But the chamber’s top Republican, President Pro Tem Phil Berger, on May 25 previewed a teacher-pay formula also designed to help maneuver North Carolina out of this particular ditch.
The aim would be to let teachers reach the top of their pay scale in 15 years rather than 25 – a carrot to junior teachers tempted to quit – and also to raise average salaries to more than $54,000 within two years.
According to Berger, North Carolina would then have the highest teacher pay in the Southeast and the 24th highest in the country. Not bad, perhaps, but think of how much more leeway the state would have both to hit that target and to address other critical needs if legislators hadn’t taken a tax-cut plunge whose cost in forgone revenue stands in the range of $1 billion a year and climbing.
The House’s budget, with a $22.2 billion bottom line, would boost spending by 2.3 percent over the level authorized for fiscal 2015-16, which ends June 30. Some worthwhile programs would be helped. Yet because of relentless belt-tightening in recent years, that increase represents a drop in the bucket compared to the accumulated needs if government operations are to be sustained in a way that adequately serves each of the state’s residents.
Even as tax collections come in ahead of forecasts because of overall economic improvements (the benefits of which are by no means shared equally across the state), the House budget wouldn’t take full advantage of the extra money.
The priority could have been on making up ground lost during the recession and subsequent years of budget hardship. Instead, the aim is to cap new spending at a level reflecting population growth plus inflation. That’s an approach with conservative ideological appeal, but one that deprives the state of flexibility to address problems that have built up over time. The proposed budget in fact would leave some $127 million available but unspent, even after contributions to the state’s so-called Rainy Day Fund – the point Larry Hall was making.
Meanwhile, the tax cut train rolls on. This time, at least, legislators with voters looking over their shoulders aim to give middle-class taxpayers a break – a break many will appreciate after seeing higher-end earners benefit the most from previous cuts. The standard deduction – utilized mainly by people with modest incomes — seems likely to rise once House and Senate members agree on the specifics, meaning that more of those people’s income will go untaxed.
Perhaps those residents can’t be blamed if they overlook how the loss of that revenue adds to the state’s difficulties in providing services that many of them rely on, from well-staffed public schools to good child-care programs to courts that have the personnel and equipment to dispense justice fairly and promptly.
The same could be said for everyone who’s set to enjoy a further cut in the already-slashed personal income tax beginning in 2017. The rate, which had been higher for upper-income earners under long-standing policies of progressive taxation, has been flattened so that the same rate now applies to everyone with a tax liability.
It’s due to drop from 5.75 percent to 5.499 percent, and legislators show no signs of backing away from that plan despite the associated revenue losses. Or, as they resort to revenue workarounds such as a broadening of the sales tax to cover various services – another change that goes against the interests of people struggling to get by.
The shrinking middle
That North Carolina has such people in abundance is impossible to ignore. One reminder comes from the Pew Research Center, which examined income trends within the nation’s metropolitan areas.
The center looked at the share of each area’s residents that could be classified as upper-, middle- or lower-class on the basis of household income. It turns out, shockingly, that among the 10 areas whose middle class shrank the most from 2000 to 2014, three are in North Carolina. Rocky Mount was 10th, Hickory-Lenoir-Morganton was fourth and Goldsboro was tied (with Springfield, Ohio) for the dubious honor of being first. Nor is the middle class shrinking in these places because residents are getting rich. It’s shrinking because they’re falling farther behind.
Legislative chiefs and Gov. Pat McCrory boast about the “Carolina comeback” supposedly triggered by their economic policies. Certainly, some companies are attracted by low taxes, low wages and lax regulation – all touchstones of the conservative regime. And it’s true that the state can point to economic successes that give some areas the sheen of prosperity, with residents living the good life.
Yet that prosperity is nowhere to be found in many of our rural counties and small towns. Jobs are scarce. Younger people are moving away. Schools are underfunded and health care is spotty. In urban neighborhoods where minority residents often have no choice but to live, despair and the crime it breeds are too often part of the fabric of life.
These are the kinds of conditions and challenges that responsible state leaders would not permit themselves to tolerate. They would be explaining, day in and day out, why we as a state can and must do better – why the fortunate among us cannot in good conscience avert our gaze from the unfortunate, why the dogma of low taxes and limited government too often represents a collective shirking of our duties toward one another.
Whatever shape the next state budget takes, it will have to be judged a failure if it helps perpetuate the inequalities and lack of opportunities that, for many who live here, make North Carolina a cold, harsh place that the rest of us can barely recognize.