Legislative Briefings -- Fall 2013 Budget & Revenue Education, Financial Stability, Health
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1 Legislative Briefings -- Fall 2013 Budget & Revenue Education, Financial Stability, Health Slides available online at: Legislative Briefings United Way of North Carolina & The NC Budget and Tax Center
2 OVERVIEW State of NC Economy State & Federal Policy Matters Community Level Impacts Moving Forward to 2014
3 State of NC Economy
4 Current employment recovery taking longer than other recoveries
5 North Carolina faces steep jobs deficit Jobs needed to reach pre-recession employment levels and keep up with population growth
6 And the jobs we re gaining aren t as good as the one s we ve lost Mid-wage goods-producing jobs replaced by low-wage serviceproviding jobs
7 The economy is more productive but wages have declined
8 Growing income inequality represents a barrier to progress $30.00 $25.00 $20.00 $ th percentile 80th percentile $10.00 $5.00 $
9 North Carolinians are Still Reeling from the Effects of the Great Recession 1.7 million+ in Poverty $23,492 (poverty level for family of four) Source: 2012 American Community Survey.
10 10 th highest Highest Poverty Rate NC is in the Bottom of the Pack Southern region Highest Child Poverty Rate 12 th highest Deep Poverty Rate (half of poverty level) Source: 2012 American Community Survey.
11 Nearly one in two children live in poverty. 50% 40% Statewide average (26%) 30% 20% 10% 0% American Indian Hispanic or Latino African American White, non- Hispanic Asian Source: 2012 American Community Survey.
12 What does economic progress look like?
13
14 State & Federal Policy Matters
15 8% State Spending as a Share of the Economy is Below the 40-Year Average Total General Fund appropriations as a share of state personal income 7% 6% 40-year average = 6.16% Final Budget = 5.36% 5% 4% 3% 2% 1% 0%
16 Spending is 8.3% below prerecession levels Change from Base Budget (what is needed to maintain current service levels) Change from Pre-Recession Investment (FY2008, adjusted) -47.9% -1.5% -6.4% -1.6% -0.05% -4.7% -9.7% -1.0% -0.2% -8.3% 8.2% 5.7% 7.3% 1.9% PUBLIC EDUCATION COMMUNITY COLLEGES UNIVERSITY SYSTEM HEALTH & HUMAN SERVICES JUSTICE AND PUBLIC SAFETY NATURAL & ECONOMIC RESOURCES TOTAL GENERAL FUND BUDGET
17 Tax cuts limited the ability to regain ground lost during the recession. In the next two years, the tax plan passed this session will reduce available revenues by $525 million. These dollars could have been used to: Keep 1 in 5 teacher assistant jobs in FY14 and FY15 Keep the Teaching Fellows program in FY14 and FY15 Protect salary supplement for teachers with master s degrees in FY15 Prevent the higher mileage threshold for school bus replacement Provide a 1% salary increase for teachers and state employees
18 Millions A decreasing investment $0 ($100) ($87) ($200) ($300) ($400) ($500) ($438) ($600) ($700) ($645) ($624) ($650) FY FY FY FY FY 17-18
19 A tax shift +0.4% Average total tax change as a share of income +0.2% 0.2% Lowest 20% Second 20% Middle 20% Fourth 20% Next 15% Next 4% Top 1% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4%
20 Federal deficit reduction has reduced dollars for domestic programs 70% of Recent Policy Savings to Reduce Deficits Have Come From Program Cuts
21 Across-the-board spending cuts Have hit North Carolina hard Legend Loss of Federal Dollars Per Person Due to Sequestration $150 or less $ to $300 $ to $500 $500 or more Source: Donald, David, Center for Public Integrity and James Politi, Financial Times, September 29, 2013, Sequestration: How is your county affected?
22 Before Cuts to SNAP and future proposed changes make putting food on the table more difficult. After $1.35 $1.06 Average per person per meal Average per person per meal Source: The 2009 ARRA s temporary boost to SNAP will end November 1, Center on Budget and Policy Priorities analysis of USDA Food and Nutrition Service data, FY2011 and projected FY2014.
23 Local Impacts
24 Job Growth Varies by Region 6.0% Percent Change in Employed Persons, August 2012 to August % 2.0% 0.0% North Central Northeast Northwest Piedmont Triad Sandhills Southeast Southwest Western -2.0% -4.0% -6.0%
25 Hardship aligns with state experience Poverty Rate Median Household Income Buncombe 17.6% $43,294 Henderson 13.6% $45,067 North Carolina 16.1% $46,291
26 The Elimination of the Earned Income Tax Credit will harm working families in Buncombe County. 20,550 Taxpayers received the state EITC in 2011 $2.1 million Value of the state EITC in 2011
27 Unemployment Insurance Cuts will Impact Workers & Business in Buncombe County 1,267 Unemployed workers will lose Federal Unemployment Insurance Compensation in Forsyth and Guilford County as a result of the state-level changes 6.2% Unemployment rate in July 2013
28
29 Moving Forward
30 What to expect in 2014? ECONOMIC PICTURE Unemployment: Likely to remain high Poverty: Could increase as federal and state policies reduce supports for families that are struggling Growth: Productivity gains will likely continue Progress: Stagnates
31 What to expect in 2014? POLICY CONTEXT Budget: Lower revenue due to tax cuts, effort to address public education spending cuts could be made Taxes: Tax credits, deductions and loopholes could be eliminated to generate some new revenue Medicaid: Potential for expansion still exists Economic Development: Privatization of aspects of Commerce work and definition of 10-year plan will direct allocation of resources to economic development strategies (likely with a narrower focus)
32 CONCLUSION State of NC Economy: Jobs deficit persists, low-wage jobs grow State & Federal Policy Matters: Policy directions threaten sustainable economy Local Impacts: Communities struggle in recovery Moving Forward to 2014: Improving economic picture, new policy directions?
33 me at: Follow us on Twitter
34 Digging Deeper Education, Financial Stability & Health Jill Cox
35 A couple of baseline questions? How many years does it take for a North Carolina teacher to make $40,000 per year in base salary? 16 years If you could choose the best health care option what would you choose and why: ObamaCare or the Affordable Care Act? Both are the same thing 35 December 2, 2013
36 Accomplishments of the 2013 General Assembly Charitable Giving Tax Deduction was not capped, pooled or eliminated. Some critical tax credits remained in place like the Child Tax Credit for working families. The final revenue plan was less limiting. Teacher assistants were not specifically eliminated leaving the door open for future reinvestments. Impact to SmartStart was minimized. 36 December 2, 2013
37 Educational Achievement Key to a Strong NC 37 December 2, 2013
38 The State Budget: Education Impacts $ for classroom teachers resulting in higher student:teacher ratios in classrooms $ for support staff resulting in fewer counselors, social workers etc. $ for supplies and text books $ for teacher assistants though teacher assistants were not completely eliminated $ for Excellence in Public Schools Act $ for innovation grants No merit raises, but potential bonus for those opting for 4 yr. contracts 38 December 2, 2013
39 State funding has declined in key classroom-level areas that help boost student outcomes $400 $350 $300 $334 $299 State funding per student FY2008 FY2014 $250 $245 $214 $200 $150 $100 $50 $0 Teacher Assistants Instructional Support Textbooks Classroom Materials/Instructional Source: NC Department of Public Instruction and NCGA-approved FY14 Supplies/Equipment budget $68 $15 $57 $29
40 Student Investments in Surrounding States / / GA NC SC TN VA National Source: NEA Ranking of the States and Estimates of School Statistics 40 December 2, 2013
41 Average Teacher Salary in the Southeast preliminary rankings 2012/13 Source: NEA ranking & estimates 2/ December 2, 2013
42 Policy Changes Impacting the Classroom Common Core and the NC Standard Course of Study implemented in classrooms. First round data measuring student growth released this month to the SBE in the Ready Report. READY Initiative being rolled out to prevent retention on grade in 3 rd grade for failure to meeting 3 rd grade reading assessment requirements 11/ th graders proficient in ELA/Math 58.9% 12/ th graders proficient in ELA/Math 32.0% 3 rd grade reading proficiency 45.2% Policy changes to teacher tenure 42 December 2, 2013
43 Local Education Snapshot Buncombe County: 24 teacher assistants lost; Teacher assistants who remain will face reduced hours and days on the job. [Black Mountain News] 43 December 2, 2013
44 The State Budget: Health and Human Services NC PreK 2,500 slots. This outcome could have been much worse. SmartStart held its own overall with budget negotiators agreeing not to move subsidy money to the child care pot. ECU High Risk Maternity Clinic retained funding with $375,000 each year, but not in recurring dollars Food Bank did not receive its $2 million as allocated in the Gov s budget 44 December 2, 2013
45 The State Budget: Financial Stability Impacts The State Earned Income Tax Credit will sunset at the end of the year leaving low income working families with less. The North Carolina Housing Trust Fund was funded at $7 million. This is less than at the high point but better than at the low point. 45 December 2, 2013
46 Opportunities: NC 211 Top 10 Needs: Food Utility Rent Homeless shelter School supplies Home rental listings Transitional housing Community clinics Transportation Prescription Assistance 46 December 2, 2013
47 What People Need When They Dial NC * Housing Assistance Utility Assistance Food Assistance School Supplies 47 December 2, 2013
48 Impacts to Health Care: Low Awareness of the Affordable Care Act November % of the uninsured don t know about the Health Insurance Marketplace August % of the uninsured don t know about the Health Insurance Marketplace 48
49 Uninsured Rates High 49 December 2, 2013
50 Five Things Everyone Should Know 1. New Health Insurance Marketplace open until March 31, and TTY: Plans cover what you need. Primary care, maternity care, emergency, hospitalization, mental health, prescriptions & more. 3. Financial help available to most uninsured. Sliding scale help for those from % federal poverty level. 4. You can get free help: online, by phone, in person Call Toll Free for appointment to get local in-person help. 5. You cannot be denied for a pre-existing condition.
51 Types of In-Person Assistance Navigators Aug $3m awarded 3 regional groups and the Navigator Consortium Community Health Centers July 10 - $4m awarded 31 CHCs Certified Application Counselor Organizations Applying for Certification 51 December 2, 2013
52 Finding Help To make an appointment with a Navigator: Call Toll Free: To find an In-Person Assistor in your community Dial 211 Or search online at nc211.org 52 December 2, 2013
53 Thank you! Jill K. Cox United Way of North Carolina
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