With a bipartisan majority of 76 to 43, the North Carolina House of Representatives voted yesterday to override the governor’s recent budget veto. The budget, now state law, enacts another round of middle-class tax cuts, a fourth consecutive teacher pay raise, and a record-high savings reserve.
“The governor chose partisanship over the people of North Carolina when he rejected middle class tax cuts and a fourth consecutive teacher pay raise,” said House Speaker Tim Moore. “But the General Assembly has delivered these priorities to North Carolinians without his support.”
North Carolina’s rapid economic growth, job creation, revenue surpluses and record savings — results of fiscally responsible budgets for the last seven six years — are among the best in the nation. When Republicans took the majority in 2011, North Carolina suffered with a $2.5 billion structural deficit, was saddled with an additional $2.7 billion debt, had the highest taxes in the southeast, and more than one in ten people were unemployed.
According to the National Association of State Budget Officers’ Fiscal Survey of States, two thirds of other other states faced budget shortfalls in 2017, while nearly half were forced to make mid-year budget reductions because of stagnant revenue collections.
In contrast, under Republican leadership, North Carolina has paid off its debt and secured $1.8 billion in savings reserves. Since 2011, the General Assembly lowered the sales tax rate, the income tax rate and the corporate tax rate — moving our state from 44th worst to 11th best in the nonpartisan Tax Foundation’s State Business Tax Climate Index. Additionally, the Republican-led General Assembly has passed dozens of pro-growth regulatory reforms since 2011 that have made a major impact on the state’s positive economic and fiscal outlook.
Targeted tax relief for the less fortunate
The General Assembly’s tax relief removes 95,000 low-income North Carolinians from any income tax liability. The General Assembly’s budget increases the percent of total tax liability for those making more than $100,000, and lowers the percent of total tax liability for those making less than $100,000. Republicans have tripled the zero-tax bracket for married families since 2013, helping those who earn the least the most. Tax relief has consistently produced record savings and budget surpluses this decade, contrasting the deficits and debt that resulted from four sales tax increases by Democrats last decade.
Teacher raises and investing in education
The 2017 state budget increases public education spending by over $700 million from the previous biennium.
North Carolina has had the fastest rising teacher pay in the nation since 2014, according to PolitiFactNC and National Education Association data. The 2017 state budget is the fourth consecutive teacher pay raise delivered to North Carolina educators by the Republican-led state legislature, which also increased total educating spending by hundreds of millions of dollars every budget cycle since 2012.
The General Assembly also provides supplement incentive programs for North Carolina educators including Teach for America, Salary Supplements for Highly Qualified Graduates, the Teacher Assistant Tuition Reimbursement Program and the N.C. Teaching Fellows. UNC System President Margaret Spellings voiced support for this year’s budget, saying that it “signals greater investment in and strong support for the University,” furthering “accessibility, affordability and efficiency, and student success.”
Saving for a rainy day
Despite the governor’s claim that the budget is “the most fiscally irresponsible budget” he’s ever seen — a somewhat puzzling claim, given the shape the state was in when his party controlled the legislature — this year’s budget also saves a record $1.8 billion in its rainy day fund, the highest amount North Carolina’s history.