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| April 20, 2004 |
Volume 4, Issue 2 |
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| The Living
Income Initiative is a special project of the NC Justice and Community
Development Center. It is |
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| IN THIS ISSUE:
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| Are
Legislators Considering Tax Cuts and Corporate Handouts Before
Addressing Unmet Needs?
Friday, the media reported that Legislative fiscal analysts now think the state will end this fiscal year on June 30 with an extra $190 million. While this is an enormous improvement over the past three years when the legislature faced more than $1 billion shortfall per year, it only makes a dent in the $500 to $700 million shortfall predicted for 2004-05. Other rumors also indicate that the revenue and spending news is rosier and there may be an opportunity for legislators to avoid more cuts and possibly even fund critical needs that have been ignored – or cut – in the last three sessions. Before the debate even begins businesses call for and legislative committees recommend corporate tax cuts that would continue to reduce state revenues, increase unfairness in state tax system and are unproven as an economic development remedy. Tax cuts in the mid-1990’s, an outdated tax code and economic slowdown led to a dramatic drop in state revenues beginning in 2000-2001. As a result, for each of the last three years the legislature has cut programs about $1 billion per year. This has meant that waiting lists have grown, state employee positions have been eliminated and whole programs no longer exist. Some examples of recent cuts include:
These cuts are in addition to millions of dollars in other cuts and 2% withheld across the board for the past three years. Furthermore, many other identified needs have been inadequately addressed or unaddressed altogether:
Before an assessment is even done of the State’s needs, however, the Joint Select Committee on Economic Growth and Development recommended on Thursday a corporate tax cut in the form of a $20,000 corporate tax exemption. This would mean that the first $20,000 profit of any corporation would be untaxed costing the state about $30 million. Such an exemption would benefit Wachovia, Inc. which made $3.6 billion in profits in 2002 and posted record profits the first quarter of 2004, as well as meeting the claimed goal of helping smaller businesses struggling to get started. Not the most targeted way to spend limited dollars. According to BTC Reports, North Carolina’s corporate tax rate ranks 28th and overall corporate taxes paid ranks us far lower. Are more corporate tax cuts really the way to address the state’s most pressing needs? Read the BTC Report. The Economic Growth Committee also recommends expanding corporate give-aways by allocating more funding to the state’s two primary business “incentive” programs intended to lure business to the state. They recommend adding $10 million to the One NC Fund and expanding and extending the Jobs Development Incentive Program (JDIG) by another $10 million per year until 2009. While unemployment and job loss remain high in the state’s poorest counties, a recent BTC Reports found that 88.9% of JDIG money and 36.4% of One NC Fund money went to the wealthiest counties. Read the BTC Report Before
the Governor and the Legislature give away more of North Carolina’s
limited tax revenue they should conduct a thorough evaluation
of the needs that have largely gone unmet due to years
of revenue decline. With so many families still suffering the
effects of the economic downturn and the permanent loss of jobs,
program and service needs are not expected to go away even if
revenues rebound. Now is the time to ensure that all dollars
are spent wisely to address the most critical needs. Handing
more money to businesses without first providing the normal citizen
and state employee with health care, child care, safe state facilities
and job training is short sited and will leave our workers unprepared
to move into the new economy that is already upon us. |
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Employment
Security Commission Hosts Workers Memorial Day Ceremony A ceremony honoring workers who have lost their lives while on the job, was hosted April 28 by the North Carolina Employment Security Commission. The ceremony - organized by the ESC for the third year - took on added significance for the agency in the aftermath of Hendersonville ESC Manager Letch Beatty's murder and Ron Piercy injured when a gunman entered the office and shot both men, while doing their jobs April 2. One of ESC's regional managers, Jim McMahan, will deliver a remembrance
of Beatty during the ceremony. Wednesday's observance also featured opening remarks from Gov. Mike Easley, delivered by Sonia Barnes, Special Assistant for Community Affairs in the Governor's Office; an address by Payne; a talk about workplace safety by William H. Collins Jr., General Manager of Human Resources for Durham's AW North Carolina, Inc.; and, remarks by Marlyn Valeiko, Latino Outreach Coordinator for N.C. Occupational Safety and Health Project in Durham. |
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