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Five things to remember during the budget debate

CHRIS FITZSIMON

This year’s state-budget debate began in earnest Tuesday with the release of Gov. Beverly Perdue’s recommendations to adjust the second year of the two-year spending plan approved by the General Assembly last session. Lawmakers face a shortfall in next year’s budget of more than a billion dollars.

That means the partisan and misleading rhetoric about the budget also begins with the claims by Republican leaders that the state tax rates are oppressive and running every last business out of the state.

It means semantic contortions by Democrats too, trying to put the best face on the devastating cuts to public education, human services and criminal justice they made last session and the ones they are planning to make this year.

Here are a few things to remember as the budget debate begins to help navigate through the distortions:

(1) North Carolina’s current budget woes have not been caused by out-of-control state spending. The N.C. Budget & Tax Center finds that state government spending per person is now lower than it has been in 13 years. And that is after last session’s tax increase, which kept budget cuts at merely devastating levels.

(2) North Carolina is not a high-tax state. The right-wing Tax Foundation says the state ranks 28th in state and local taxes per capita. Even the foundation’s deeply flawed “Tax Freedom Day” analysis found North Carolina slightly better than the national average, ahead of neighboring states like Georgia and Virginia.

(3) North Carolina business taxes are among the lowest in the country. Anti-government forces like to cherry-pick individual tax rates to claim that state taxes on business are too high and responsible for driving jobs out of the state. It is simply not true.

The latest analysis of business taxes by the Council on State Taxation and Ernst and Young found that state and local taxes paid by businesses in North Carolina are 3.5 percent of the total gross state product. That ties this state with Oregon for the lowest taxes on business.

(4) North Carolinians are not buried in public debt. The folks on the right want you to believe that state lawmakers have over-borrowed to pay for infrastructure projects at universities and community colleges, but the conservative Tax Foundation says North Carolina ranks 40th in per capita state debt.

(5) Last year’s budget cuts inflicted damage on public education and human services that will take a decade to repair. The Charlotte-Mecklenburg Board of Education recently voted to lay off 600 teachers, and that number may rise to 1,000. Education Week ranks North Carolina 11th of the 12 Southeastern states in spending for public education.

Last session’s cuts in the mental health system have ended vital services to thousands of people with a mental illness or developmental disability. It is true throughout the human-services system. There are now gaping holes in the state safety net at the same time more people are forced to rely on it.

More than 300 people living with HIV/AIDS have been denied lifesaving medication and put on a waiting list instead of a drug regimen.

The state’s prison system is bursting at the seams, yet alternative-sentencing programs to keep people out of prison have been cut and after-school programs to keep kids from getting in trouble in the first place have been eliminated.

The devastation from last year’s budget cuts is real and only getting worse. Lawmakers cannot simply cut their way out of this year’s budget hole without creating more suffering and more long-term damage to the vital institutions of the state.

Those are the facts as the budget debate begins.

Chris Fitzsimon is executive director of N.C. Policy Watch.

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