NC JUSTICE NEWS: House Budget Proposal + Unemployment System's Solvency + Capping the Gas Tax

HOUSE BUDGET: Proposal puts state on the wrong path

The North Carolina House presented its budget proposal on Tuesday, and although the proposal includes increased spending over the continuation budget passed in 2011, critics point out that the budget comes nowhere close to fully restoring cuts to K-12 education, Medicaid, and early education that were made last year.

The proposal continues to fall short of meeting the needs of North Carolina's communities, said the Budget & Tax Center, even as it acknowledges the need for reinvesting in key public structures. The proposal only temporarily and partially restores cuts that were made last year, leaving fewer slots for children in NC Pre-K, a continued shortfall in Medicaid, fewer dollars for public transit, and reductions to environmental protections.

Last week, the Together NC coalition oversaw a poll that found North Carolinians favor raising revenue to restore budget cuts to key public services. Unfortunately, the proposed budget passed by the Appropriations Committee sets North Carolina "on a path towards mediocrity," Together NC said yesterday. The proposal aims to expand in areas that were devastated by budget cuts last year, and yet these patchwork increases are largely paid for with non-recurring dollars, Together NC points out. These types of quick fixes won't cut it, and they could have been avoided. Lawmakers could have focused on raising revenue to restore deep budget cuts and set North Carolina on a path towards renewed prosperity.

UNEMPLOYMENT TRUST FUND: NC faces solvency issues

North Carolina is currently facing a crisis in the solvency of the state's unemployment insurance trust fund, a system that was designed to enable jobless workers to maintain economic security as they look for new jobs, while also ensuring that the economy can recover during a time of massive job displacement.

A new report from the Budget & Tax Center points out that state legislators' decision to cut employer contributions to the trust fund – along with the historic job loss – has resulted in an insolvent trust fund for North Carolina. The unemployment insurance system was designed to be funded by employers, who would contribute to the trust fund in good times so that funds would be available for jobless workers in bad times. This type of "forward-financing" creates an unemployment insurance system that protects the overall economy during downturns. However, North Carolina abandoned the design of forward-financing in the 1990s, and in turn, failed to build an adequate balance for the fund before the recession, leading to rapidly diminishing funds even as unemployment skyrocketed.

Now, it’s up to policymakers to seek solutions that will improve the fund’s solvency and build a system that better weathers economic downturns. The solution doesn’t lie with further cutting benefits, which would harm workers, but rather maintaining an effective wage-replacement level for the system. As it stands, unemployment insurance payments on average represent just 37 percent of workers' previous earnings.

GAS TAX: Transportation system at risk

On Tuesday, the House presented a budget proposal that aligns with Governor Beverly Perdue's plan to cap the state gas tax, which accounts for more than half of all the revenue for transportation projects in the state. Capping the gas tax would delay much-needed repairs for bridges and roadways, and severely weaken the overall transportation budget.

Maintaining a gas tax that generates revenue is critical for building and maintaining a reliable transportation system that is efficient and safe for motorists, points out a new report from the Budget & Tax Center. The state’s transportation budget is already facing a funding gap, and its system is under pressure due to aging infrastructure, increasing demand, and declining revenue.

North Carolina can’t afford to further damage its transportation budget. The state ranks 48th in the country in spending per lane-mile of paved road, and even more shocking, poor road conditions cost North Carolina drivers $1.7 billion in additional repairs and operating costs. If our lawmakers fail to finance new projects and repairs, the state could face a dramatic decline in its transportation system. Congested roadways, unsafe bridges, and uneven roads all translate into significant costs to motorists and the state as a whole.

CAMPAIGN FOR BETTER CARE: Luncheon in Goldsboro

Join the NC Justice Center on Thursday, May 31 for the next Campaign for Better Care community luncheon and make your voice heard on one of the most important, complex issues in North Carolina today.

The Campaign for Better Care aims to make improvements in the health system for vulnerable older adults and to build a strong, lasting consumer voice for better health care. Come and share your experiences about what you think needs to be changed in our health system. Acacia Bamberg Salatti, Deputy Director of the Center for Faith-Based and Neighborhood Partnerships at the U.S. Dept. of Health and Human Services, will present on how the health care law is already helping North Carolina families.

The event will be held from 11:30 a.m.-1:30 p.m. at First African Baptist Church of Goldsboro. Reserve your seat today by calling Betty Lewis at 919-734-4935 or; or Ophelia White at 919-734-6043.

WORKERS' RIGHTS: "Know Your Rights" trainings across the state

The Justice Center’s Workers’ Rights Project has been traveling around the state to present "Know Your Rights" trainings for workers. As part of the NC Families Care coalition, we’ve been from the mountains to sea to talk to workers about rights we have and rights we need. Interactive workshop topics include:

  • Wage and hour laws and wage theft protections
  • The FMLA and the need for paid leave
  • At-will employment
  • Discrimination protections

Contact Ajamu Dillahunt at 919-856-3194 or to talk to us about a workshop at your organization, church or community group.

CRUCIAL CONVERSATION: Lawrence Lessig on corrupt politics

Americans' trust in government is at an all-time law, points out Harvard Law Professor Lawrence Lessig in his book Republic, Lost, due in part to a belief that special interests have taken over the country's political system. "There is a feeling today among too many Americans that we might not make it," Lessig said. “Not that the end is near or that doom is around the corner, but that a distinctly American feeling of inevitability, of greatness – culturally, economically, politically – is gone."

Join NC Policy Watch and Common Cause of North Carolina for a very special Crucial Conversation breakfast with Prof. Lessig on Tuesday, June 12 at 8:00 a.m. at the Center for Community Leadership Training Room at the Junior League of Raleigh Building, 711 Hillsborough Street in Raleigh. Contact Rob Schofield at 919-861-2065 or with questions.


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