HB 713 would expand North Carolina’s existing tax credit to corporations shooting movies or television shows in North Carolina. The tax credit is being expanded under the guise of “creating jobs.” Studies show, however, that film incentives do not create jobs, and end up being a drag on state budgets. In the current economic climate, it seems especially harsh to expect hard-working North Carolinians to pay for a tax break to wealthy Hollywood executives.
The NC House is set to take up HB 530 on the first day of session. This bill would establish an investment vehicle by which investors can provide capital to startup life sciences corporations, but their risk in investing will be guaranteed by taxpayers. The state of North Carolina would guarantee through tax credits that investors would receive a specified rate of return on their capital.
North Carolina’s dire fiscal condition will once again take center stage this spring as state lawmakers return to Raleigh to craft a budget for the coming 2010-11 fiscal year. North Carolina’s financial woes, however, run much deeper than the daunting shortfall in next year’s budget.
A majority of North Carolina voters believe state government is failing them. According to Civitas Institute January 2010 polling results, 54 percent of likely voters believe that the state is on the “wrong track,” compared to only 31 percent who replied that the state is headed in the right direction.
Like all political candidates, Democratic Gov. Bev Perdue unleashed a barrage of promises during her 2008 gubernatorial campaign. Her to-do list was long and included pledges ranging from her version of “no new taxes” to free community college for all high school graduates. All too predictably, many of her campaign promises remain unfulfilled.
On April 20, Governor Bev Perdue released her recommended adjustments for the fiscal year 2010-11 North Carolina state budget. Included in her recommendations are an increase in spending over the current year’s expected appropriations, the elimination of roughly 600 mostly vacant state positions, a cut to public education and public safety, and a misguided attempt to “create jobs” via credits aimed at small businesses.
Justice and Public Safety (JPS) is one of only two major state agencies – K-12 public education being the other – to receive a reduction in Governor Perdue’s 2010-11 budget recommendations.
Governor Perdue’s recommended spending adjustments to the FY 2010-11 budget includes a 7.3% increase for the Department of Natural and Economic Resources (NER), the largest such recommended expansion, percentage-wise, among all state agencies.
On net, the Governor made almost no changes to state funding levels for agencies devoted to performing General Government functions. A slight expansion of 0.3 percent for this department marks the smallest amount of recommended adjustments in her proposal.
Included in Gov. Perdue’s Recommended Adjustments for the 2010-11 state budget was a line item for $15 million for a “Back to Work” incentive fund. The fund was included as part of Perdue’s “JobsNow” proposal to bolster job growth in the state. In her budget, she describes the purpose of the new fund as to “provide a direct rebate to small businesses that hire long-term unemployed workers.”
April 2010 Tax Day Tea Party - Brian Balfour
The final two recommendations in the Civitas Institute 2010 Agenda: “20 Changes for 2010: A Primer for State Reform” focus on cleaning up corruption in state government, enacting meaningful ethics reform and making state government and elected officials’ actions more transparent to its citizens.
In 2009, North Carolina legislators found themselves having to address yet another budget crisis, the second major deficit in eight years. Rather than using the situation as an opportunity to implement meaningful spending reform, lawmakers imposed another round of “temporary” tax hikes – this time totaling more than $1 billion dollars.
The debate over the stimulus bill’s effectiveness rages on. A close inspection of stimulus grants and contracts awarded to North Carolina reveals a rather questionable strategy for the disbursement of stimulus funds. Many projects seem completely unrelated to avoiding an economic “catastrophe,” but rather an ad hoc satisfaction of countless dubious wish lists.
North Carolina’s current BRAC was formed in large part in response to the current state budget deficit situation. Several other states in like situations have formed similar commissions to examine ways to streamline government operations as well. Thus far, North Carolina’s BRAC has met three times and is already examining issues such as reforming North Carolina’s Alcoholic Beverage Control (ABC) system, purchasing and informational technology systems and the use of state aircraft.