BTC BRIEF: Preserving Public Investments - A Better Strategy to Create Jobs

By Edwin McLenaghan
Public Policy Analyst, BTC
May 2011


  • State legislative leaders engaged the UNC Center for Competitive Economies (C3E) to estimate the economic and employment impact of proposed tax reductions totaling $1.6 billion in fiscal year 2011-12 and $2.0 billion in fiscal year 2012-13.
  • The study used the IMPLAN analytical tool to assess the impact of tax reductions without any consideration of the requisite reduction in public investment and jobs that would be required with fewer tax dollars available.
  • Evidence suggests that the model used grossly overstated the employment-related impact of cutting taxes. Some of the fiscal multipliers determined by the C3E IMPLAN analysis are up to five times higher than those used by mainstream economists.
  • The House Budget proposal will result in a loss of jobs at a time when North Carolina must continue to maintain and create employment opportunities for its growing workforce. The direct loss of jobs will result in additional indirect job loss in communities.


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