Building a Stronger North Carolina:A Legislative Briefing and Call to Action

 2014

State of NC Economy

Community Impacts

Policy Matters

Moving Forward to 2015

OVERVIEW

State of

NC Economy

NC has reached same number of jobs as in December 2007

-3

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0.800

0.850

0.900

0.950

1.000

1.050

1.100

1.150

1.200

1.250

1.300

1981 Recession1990 Recession2001 Re-cession**2007 Recession

Months from start of recession

Change in Employment

Yet jobs deficit persists

To provide employment opportunities for the growing working-age population

449,598 jobs

Majority of job growth in the recovery inlow-wage and poverty-wage occupations

Poverty has not declined, Despite the recovery

Source: 2013 American Community Survey.

-2 -1 0 1 2 3 4 5 60.0%

5.0%

10.0%

15.0%

20.0%

1982199120012009

Years Since Start of Official National Recovery*

Po

ve

rty

Ra

te

Poverty remains high

1.7 million+ in Poverty

$23,492(poverty level for family of four)

Source: 2013 American Community Survey.

North Carolina ranks 34th in the nation for overall child well-being

• 26% of North Carolina children are below poverty

• 1/3 have parents who lack secure employment

• 34% live in households with a high housing cost burden

Learn more at datacenter.kidscount.org/NC

Community Impacts

Job Growth Varies by Region

Asheville MSABurlington MSA

Charlotte-Gastonia-Rock Hill NC-SC MSADurham-Chapel Hill MSA

Fayetteville MSAGoldsboro MSA

Greensboro-High Point MSAGreenville MSA

Hickory-Lenoir-Morganton MSAJacksonville MSA

Raleigh-Cary MSARocky Mount MSA

Wilmington MSAWinston-Salem MSA

North Carolina

-0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%

2.4%

2.0%

2.6%

1.9%

0.2%

0.5%

0.6%

2.0%

0.6%

1.6%

3.2%

-0.2%

2.8%

0.9%

2.2%

Percent Change in Employment, September 2013 to 2014

Source: Current Employment Statistics, US Department of Labor

Local Labor Market TrendsSince Great Recession

Change in Labor Force Since Recession

Change in Unemployed Since Recession

Charlotte MSA 9.3% 45.6%

North Carolina 3.3% 39.6%

Source: Local Area Unemployment Statistics, US Department of Labor

Local hardship persists despiteofficial recovery

Poverty Rate Child Poverty Rate

Median Household

Income

Mecklenburg 15.2% 19.9% $54,278

Cabarrus 11.9% 16.3% $54,307

Anson n/a n/a n/a

Union 9.7% 13.6% $63,355

North Carolina 17.9% 25.2% $45,906

Source: 2013 American Community Survey

The end of the NC Earned Income Tax Credit hits working

families

Number of Taxpayers Value of Credit

Mecklenburg 85,331 $10,758,579Cabarrus 14,428 $1,723,452Anson 3,205 $146,352Union 13,517 $1,651,352North Carolina 906,916 $107,660,805

Source: Tax Year 2012, NC Department of Revenue

Policy Matters

NC Relies on Diverse Sources of Revenue to Fund its Priorities

FY2015 General Fund Budget (BTC’s analysis of State Controller data)

51%

29%

5%

5%

9%

Personal Income Tax

Sales and Use Tax

Corporate Income Tax

Insurance and Franchise Tax

Fees and Other Revenue

Source: Original, FN for HB 998; Revised, Consensus Forecast; ITEP, Using Up-to-Date Taxpayer Data

FY 14-15 (Original)

FY 14-15 (Revised)

FY 14-15(ITEP Estimates)

($1,200)

($1,000)

($800)

($600)

($400)

($200)

$0

($513)

($704)

($1,100)

Tax cuts limited the ability to regain

ground lost during the recession.

Major 2014 Tax Change was Repeal of Local Privilege Tax –

beginning July 1, 2015

Source: Fiscal Research Division, Fiscal Note, HB 1050

State spending is not recovering, despite official economic recovery

-1.5%

-1.6%

-4.7%

8.2%

-0.2%

7.3%

1.9%

-6.4%

-0.05%

-9.7%

-1.0%

5.7%

-47.9%

-8.3%

Change from Pre-Recession Investment (FY2008, ad-justed)Change from Base Budget (what is needed to maintain current ser-vice levels)

PUBLIC EDUCATION

COMMUNITY COLLEGES

UNIVERSITY SYSTEM

HEALTH & HUMAN SER-VICES

JUSTICE AND PUBLIC SAFETY

NATURAL & ECONOMIC RESOURCES

TOTAL GENERAL FUND BUDGET

Spending is % below pre-recession levels

K-12 Education

• Teacher Salary Changes• Teacher Assistant Funding• Adjustments to Read to Achieve• Replace Common Core• At-risk Student Services Reduced

Health and Human Services

• Contract reductions

• State/County Special Assistance Changes

• Mental Health

• Medicaid Reform

• Provider Rate Cuts

Early Childhood

• Child Care Market Rate Increase

• Child Care Subsidy Eligibility Changes

• Increasing Reliance on federal funds

Moving Forward

2015 Policy Opportunities & Threats

• Budget: Lower revenue due to tax cuts and a likely shortfall before the end of the fiscal year

• Taxes: Efforts to eliminate income taxes and capital gain tax, nonprofit sales tax refunds, charitable deductions, nonprofit property tax exemption

• Medicaid: Potential for expansion exists but unlikely, opportunities for better outcomes with reform

• Economic Development: Greater push for corporate subsidies

• Early Education: Child care subsidy eligibility, Early literacy

CONCLUSION

State of NC Economy: Jobs deficit persists, low-wage jobs grow

Local Impacts:Communities struggle in recovery

Policy Matters:A commitment to reinvestment

& targeted assistance is needed

Moving Forward to 2015

Contact:

Annaliese Dolph

Government Relations Contractor and Registered Lobbyist

annaliese@dolphlaw.com

(919) 357-8914

Today’s presentation can found at:

www.unitedwaync.org/advocacy