August 6, 2013
There are two things that the folks running the General Assembly and the moneyed interests behind them are petrified that people in North Carolina will realize about this legislative session.
No, it’s not the unprecedented assaults on voting and women’s reproductive rights. People already understand those regressive and troubling decisions.
After all, there are not many ways to spin the fact that lawmakers made it harder for people who disagree with them to vote and that they put new harsh restrictions on access to abortion services — no matter how intensely Governor Pat McCrory claims otherwise to try to wiggle out of a clear and concise campaign promise. He straightforwardly broke the promise when he signed the abortion bill this week.
Lawmakers are most afraid that voters will understand that they made another round of deep cuts to education and they used the money to give big tax cuts to millionaires and corporations. And they did it even though most respected economists told them the tax cuts would not create jobs and spur new economic development, which legislative leaders continue to claim every day.
Let’s start with education. Legislative leaders and the think tanks on the Right are flailing to defend the education budget as criticism of the cuts continues to grow.
The budget slashes funding for more than 5,000 teaching positions and 4,500 teacher assistants. Teachers will no longer receive additional pay for earning a master’s degree.
Funding is cut for instructional support personnel, school buses, limited English proficiency students, and a host of other programs.
The bottom line is that lawmakers made deep cuts to public schools and higher education this year at the same time they were doling out tax cuts to millionaires. Overall education spending falls $481 million short over the next two years of what it would take to keep services at the same level as 2012-2013.
It’s that number that drives the Right crazy as columnists and pundits and legislative leaders have been screeching that education was not cut at all, that this year’s budget actually spends more than last year.
That’s only true if you present the numbers disingenuously. Every year before the budget debate begins, the Office of State Budget and Management calculates something called the base budget. They come up with that number by taking the total money spent last year and then adding inflationary increases, increased enrollment and other expenses that increase year to year.
The 2013-2014 base budget developed by OSBM under the direction of State Budget Director Art Pope was 11.731 billion for education at all levels, public schools, community college and the university system.
The total education budget approved by the General Assembly and signed by Governor McCrory was $11.472 billion—-a $259 million cut. The budget for the second year cuts another $221.9 million from the base budget, for a total of $480 million slashed from what’s needed to keep education spending at the same level.
If you don’t adjust for inflation and enrollment, etc. you could argue that more is spent in real dollars, but that means less services, less spending per pupil, fewer teachers, fewer teacher assistants, larger classes—-in other words BUDGET CUTS.
Schools have fewer resources with which to educate students thanks to the budget passed by the General Assembly and signed by Governor McCrory. That is simply beyond dispute.
Then there is the tax cut where the spinning from the Right is also out of control. Governor McCrory and many conservative pundits have claimed that everyone will pay less in taxes under the tax cut plan passed this year.
That’s false even when only using the tax scenarios provided by the Fiscal Research Division of the General Assembly that Republicans always cite to explain their plan.
In one example, a couple with two children that earns $64,000 a year will pay $2,700 more. The claims by McCrory and anyone else that all taxpayers will receive a break from the final tax plan are blatantly false.
Some right-wing pundits backed off that earlier claim and now say instead that most people will pay less under the new tax plan. But that is false too. The scenarios only apply to individual taxpayers that have specific and unique financial characteristics.
An analysis of the tax plan using a comprehensive and widely accepted economic incidence model shows that roughly 80 percent of people will pay more under the plan while millionaires will pay $10,000 less.
And finally, there’s the most important claim of all by the Right, that cutting taxes on corporations and the wealthy will boost economic development and spur job creation which will benefit us all. That’s their fallback answer to everything, that the economy will improve and that helps everybody.
It’s what they based their entire budget and tax plan on, the guarantee that lower taxes will create jobs.
But that’s simply not true either. Four senior economists told the Senate Finance Committee that there is no consensus that cutting taxes will create jobs. One of them, Dr. Mike Walden at N.C. State and an adjunct scholar at the John Locke Foundation, went a step further recently, telling the News & Observer, “So will the cut in state taxes set off an economic boom in North Carolina? I would say based on the literature that I have looked at, which is extensive, no.”
No, cutting taxes on millionaires and corporations (while making most families pay more) will not create jobs. But they did it anyway. And yes, cutting teachers, teacher assistants and other education funding will hurt schools and students. But they did that anyway too.
Both moves are not only bad policy, they are extremely unpopular with the voters. That’s why there is such uproar on the Right these days. They are terrified that people are learning the truth about what really happened on Jones Street this summer.
Chris Fitzsimon is the Executive Director at N.C. Policy Watch.