NC Justice Center's Living Income Initiative E-mail Update

April 17, 2003

Volume 3, Issue 4

The Living Income Initiative is a special project of the NC Justice and Community Development Center. It is
supported completely through contributions and foundation support. You can contribute directly by mail at
Living Income Initiative, P.O. Box 28068, Raleigh, NC 27611. Email us at sorien@ncjustice.org

LIVING INCOME EMAIL UPDATE - Legislative Update of the Justice Center


HOUSE PASSES BUDGET

In this update:

• House Passes Budget and Revenue Package
• Cigarette Tax Gets a Hearing
• Unemployment Improvements Bill Passes the Senate

 


HOUSE PASSES BUDGET AND REVENUE PACKAGE

With limited debate or opportunities for amendments, the House passed a budget and revenue plan which implements serious cuts to several children’s programs. Representative Verla Insko ran numerous amendments in the sub-committee to improve both the funding and the budget provisions, but nearly all failed. Later, however, leadership was able to find TANF money to replace cuts made to child care subsidy, one of Insko’s failed amendments. On the floor Representative Paul Luebke spoke strongly on the need to restore all cuts made to Medicaid and Health Choice and of the horrible impact these cuts will have on thousands of North Carolinians. Representative Mickey Michaux tried to fix new limitations placed on Smart Start but that amendment failed 54 to 61. All in all, the rules were enforced in such a way as to limit amendments and discussion. There were only five hours of debate on second reading and three hours debate on third, compared with days of debate in the last several years. The bill passed third reading 75 to 42, with several sub-committee chairs voting against the budget because of the tax freezes. Here is a brief summary of what they did, but not Paula’s usual detailed account of the discussion.

Getting the Money

They maintained or raised $384m in revenue by extending the ½ cent state sales tax and the top income tax bracket, which were both set to expire on June 30, 2003. In addition they took revenue for one year from a few funds and they raised fees for several items, including the licenses for child care centers. Unlike the Governor’s budget, the house did not delay the implementation of the increase in the child tax credit and the credit for married couples, which cost them more money. No other tax options were even considered, except for a debate, but not a vote, on the cigarette tax. (See below)

Making Cuts

To balance the budget, therefore, the House had to make over $800 m in cuts to programs and services. Many of these cuts are devastating.

This list does not include all budget changes but the cuts include:

EDUCATION
•  
 Cut per pupil funding for public school students with Limited English Proficiency
•  
 Cut per pupil funding for at risk students
•  

Cut $42m from local school systems
•  
Teachers received a one-step pay increase

HEALTH
•  
 Eliminate Medicaid coverage for 19 & 20 year olds
•  
 Eliminate Medicaid for families Transitioning off Work First
•  
 Eliminate Medicaid coverage for pregnant women and infants under one between 151% and 185% of federal poverty level
•  
 Cap Health Choice at 100,000 children which means the program will be frozen immediately

PUBLIC HEALTH
•  

Eliminate the WIC Farmers Market Program
•  

Eliminate Intensive home Visitation Program
•  
 Eliminate staff for Child Fatality Task Force
•  
 Increase fees charged Public Health Departments for processing pap smears
•  
 Eliminate grant to Prevent Blindness of NC

CHILD CARE AND DEVELOPMENT
•  

Cut Smart Start Partnerships by $9.5m
•  
 Cut TEACH program funds in half

DIVISION OF SOCIAL SERVICES
•  
 Increase the assistance payments to foster parents 
•  
 Cut funds to Child Caring Institutions $710,000
•  
 Numerous contracts were cancelled including with Family and Children Resource program, Another Choice for Black Children, Children and Family Services, and the UNC-CH Child Welfare Education Collaborative
•  
 Some other state fund cuts were replaced with TANF funds. Further analysis of the TANF block grant will be sent later.

MENTAL HEALTH, DD AND SA SERVICES
•  
 The House did NOT take the Governor’s $20m cut to the Mental Health Trust Fund
•  
 Several Contracts were cancelled or reduced

GENERAL HHS
•  
 Eliminate grant for NC Child Advocacy Institute
•  
 Expand the More at Four program

JUVENILE JUSTICE
•  
 Cuts made to nonprofit programs including: Support our Students, Boys and Girls Clubs, Communities in Schools, Methodist Group Home, Governor’s One on One
•  
 Reduction in Population Increases to: community beds, Eckerd Camps, Sex Offender Beds, JCPCs

Much will have to be fixed in the Senate, however, it is expected that revenue estimates will go down and the Senate will have less money to work with.

(TOP)

 


CIGARETTE TAX GETS A HEARING

For the first time in history, the legislature publicly debated the cigarette tax. Several members of the House finance committee refused to vote for the sales tax freeze unless they could have a hearing on the cigarette tax. Many health advocates, as well as several tax opponents, spoke to legislators. Rep. Jennifer Weiss, the cigarette tax bill sponsor, pulled the bill before there was a vote. While the bill would have failed on a vote, it was still historic that the debate was held. The bill is eligible for consideration again by the House during this biennium.

Contact Pam Seamans for more information pamseamans@nc.rr.com.


 


UNEMPLOYMENT IMPROVEMENTS BILL PASSES SENATE

Senate Bill 439, sponsored by Senator Clodfelter, passed the Senate 48 to 0 this week. Part of the Justice Center’s Living Income Agenda, this excellent bill will modernize the Unemployment Insurance system to better reflect the realities faced by many workers. With unemployment rates hitting twenty-year-highs last year, it is more important than ever to ensure that laid-off workers can get the help they need. This bill would do that.

To see the bill go to: http://www.ncga.state.nc.us/html2003/bills/AllVersions/Senate/S439v3.html

 

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CONTACTS & LINKS

Living Income Email Update and Advocacy
Sorien K. Schmidt 919-856-2151 sorien@ncjustice.org		 Living Income Research and Grassroots Campaigns
 Elizabeth Jordan 919-856-3185
 Living Income Grassroots Education and Organizing
Sheila Kingsberry Burt 919-856-3194
Elaine Mejia
NCJCDC Budget & Tax Center		 How to Take Action The Living Income Agenda (PDF)
Subscribe to the Living Income Email Update Earned Income Tax Credit (EITC) Fact Sheet Living Income Fact Sheet
Working for a Good Living Workshop brochure (PDF) Learn more about public assistance in North Carolina. North Carolina EITC Tax claims by county and as a percent of income tax filers for 1998.