NC JUSTICE NEWS: Gov. Perdue's Budget Proposal + The BTC's Revenue Plan + BCBS's Closed-door Maneuvers

February 22, 2011

STATE BUDGET: The highs and lows of Gov. Perdue's proposal

Last week Governor Perdue presented a budget proposal that protects education, mental-health and disability services, and other vital public investments—although it does include significant cuts to state jobs and programs that serve North Carolinians young and old.

The highlights of her budget proposal include the following:

  • Continued state support for K-12 teachers and teacher assistants in the classrooms

  • $75 million for the Mental Health Trust fund to increase the availability of community-based services, housing, and local in-patient beds

  • Full funding to cover enrollment growth in community colleges and universities

  • Open enrollment for all eligible children in NC Health Choice, the state’s health insurance program for kids from low-income families

  • Protection of community-based services for people with developmental and intellectual disabilities

However, the governor proposes some cuts that cause concern, such as cuts to the Medicaid reimbursement rates for doctors, meaning fewer doctors will see Medicaid patients; cuts to the Division of Child Development that will make it harder for low-income working parents to cover the costs of child care; extensive cuts to juvenile justice programs; and cuts to local health departments, early-intervention agencies, and school nurses.

The new leadership in the General Assembly is promising to make much deeper cuts that will put thousands more people out of work, will undermine North Carolina's education system and other public institutions, and leave thousands of families without the services they need.

The fight to protect what’s important to the people of North Carolina has just begun.


REVENUE REFORM: Fiscal responsibility means fixing the problems

The most important thing missing from Gov. Perdue's budget—in fact, the one thing that could have dramatically improved the whole budget picture—was a plan for addressing the problems with North Carolina's revenue system. Modernizing this outdated system and making sure it will serve the state well now and in the future is the only way to protect North Carolina's public structures and services. Instead, the governor proposed cutting the corporate income tax rate—which would not only cost the state over $400 million per year but would do little or nothing to create jobs.

The Republican leaders in the General Assembly have promised to be fiscally responsible. But making deep and damaging budget cuts is not responsible; fixing the problems with the revenue system is. Hopefully, legislative leaders will live up to their promise.

The NC Budget & Tax Center released its comprehensive revenue reform plan yesterday. The plan covers how best to modernize North Carolina’s outdated revenue system, which was built for a 1930s economy, while maintaining funding for vital public investments that fuel prosperity.

Check It Out! NC BUDGET & TAX CENTER: The Future is Now - A Plan to Modernize North Carolina's Revenue System


STATE EITC: Legislature looks to increase taxes on working families

Perhaps one of the most shocking bills to come out of the "No New Taxes" legislature is a proposal to increase taxes on North Carolina's working families.

House Bill 93 would increase taxes on 12% of non-elderly households in North Carolina. It would eliminate the refundable nature of the state Earned Income Tax Credit, a credit that boosts the earning of low- and moderate-income workers. Because it is refundable, the EITC offsets the greater share of total taxes these families pay as compared to those with higher income. (As a rule, the lower a family’s income, the higher share of their income they pay in sales and property taxes.)

This bill would hurt North Carolina's working families when they are already struggling to get by in this tough economy. Plus, it would take $52 million from local economies at a time when consumer spending is critical to job creation and economic recovery.


HEALTH REFORM: BCBS wants to be the fox guarding the hen house

Blue Cross Blue Shield NC is working behind closed doors at the General Assembly to take over the new health benefits exchange created by federal health reform.

As part of reform, North Carolina must create a new marketplace where more than a million individuals and small businesses will purchase insurance policies beginning in 2014. Reform includes numerous protections and benefits, including more affordable rates.

North Carolina lawmakers must create a health benefits exchange to implement and monitor these new protections. This is supposed to be an independent organization that will serve as a consumer watchdog. So the last thing you would want to do is put the state’s largest insurance companies in charge of the exchange.

But that's exactly what House Bill 115 would do. The bill, introduced by Rep. Jerry Dockham, would put three insurance companies on the board of the exchange and—unbelievably—would give Blue Cross a permanent board seat. In addition, it strips the exchange of the ability to kick health plans that are bad actors out of the exchange.

In contrast, Representative Verla Insko (D-Orange) has proposed a great exchange bill (House Bill 126) that puts consumers in charge. It would create a board built around experts, individuals, and small and large business owners—not big insurance companies.


WORKERS' RIGHTS: NC workers rally in support of WI protesters

North Carolina activists held a rally at the General Assembly yesterday to show their solidarity with public workers in Wisconsin, who are fighting to protect collective bargaining rights. Their efforts to prevent devastating cuts and to protect their rights have been awe-inspiring, with tens of thousands of people rallying at Wisconsin’s state capitol.

Around the nation, the right wing is vilifying public workers—as if providing services to those in need and making sure state government works were shameful pursuits. Here in North Carolina, public workers are losing their jobs so the state can give tax breaks to corporations.

North Carolina has long denied its public workers the fundamental right to collective bargaining. A 1959 law bans any government entity from signing contracts with unions or other employee organizations.

Acknowledging the contributions of public workers in North Carolina—and standing up for the rights of workers around the nation—is a first step in bolstering wide-spread support for the role of government in improving communities and providing new opportunities to the least fortunate among us.


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