Group Releases Plan for NC Economic Recovery
February 23, 2012
RALEIGH, N.C. - Like its citizens, North Carolina took a big hit from the latest economic downturn. As the state continues to recover after decreased revenue and subsequent budget cuts, a report released today highlights five things policymakers can do this year to push the state toward revenue recovery.
The NC Budget and Tax Center says the strategies would help repair what it calls the "great recession" the state and nation experienced in recent years. If all its recommendations were implemented, says Edwin McLenaghan, the center's public policy director, the additional funds would be significant.
"The sum total of all five of those strategies could restore up to about a billion and a half in revenue next year to offset a lot of the billions of dollars in cuts that have been made over the course of the last several years."
Today's report cautions against the "cuts only" approach taken by lawmakers in the most recent legislative session. It insists that the state must examine ways to raise revenue in order to move forward. Among the suggestions: Capping tax subsidies which benefit wealthy households, which the center says would raise $200 million n additional state revenue.
Another $250 million could be raised by extending the sales tax to things such as auto repair, warranty and installation services not now taxed in the state, the report says. While he acknowledges raising taxes is a tough proposal for politicians to champion, McLenaghan points to surveys done last year by Elon University and others that showed a majority of voters supported a 1 percent sales-tax hike. He says voters understand that the need for revenue is serious for the state.
"The hole that's been dug is so deep that it's going to take us a long time to get out. Some people have called this the Great Recession, others the Lesser Depression. So, I think either name is really apt to show how big a hole our economy is in."
Another strategy in today's report suggests adding a new tax bracket for households earning more than $1 million per year, which the center says would raise up to $90 million.
The full report is online at ncjustice.org.