As budget negotiations for the long-overdue 2015 North Carolina state budget continue, the Civitas Institute would like to remind legislators and taxpayers about opportunities to save real money in the budget – which will enable negotiators to come to an agreement once and for all.
Our latest article in the series “Cut This, Go Home” focuses on state budget funding for The Support Center, a “Moral Monday” supporter that funnels taxpayers’ money into risky loans.
The Support Center is a private, non-profit entity formerly known as The Minority Support Center. It was a previous partner in the “Moral Monday” protests. The group is also an original member of the Left-wing Blueprint NC coalition that promised to “eviscerate” the current state government leadership while “crippling” their leaders.
The organization describes itself as a “Community Development Financial Institution” that primarily offers loans and training to start-ups and small businesses.
-The Support Center is a government creation, not a traditional charity supported by voluntary contributions.
-It has received more than $20 million in taxpayer funds since 2007.
-According to an internal audit, 98 percent of The Support Center’s revenue comes from government entities, with about 57 percent from the NC Commerce Department.
-It is the taxpayers’ money that is at risk when The Support Center makes loans.
The Support Center is also in the business of buying bad loans from other groups, and forcing taxpayers to absorb the loss:
-In April 2010 it purchased $1.3 million in delinquent mortgage loans from a credit union, with “significant losses expected.”
-In April 2014 the Support Center purchased more than $430,000 in risky loans from Self-Help Credit Union, with nearly 10 percent of the outstanding portion already past due.
-The Center wrote off more than half a million in bad loans, and another $166,000 in losses of “at-risk investments” last year alone – maneuvers that also used taxpayer funds.
The Support Center has not only been politically connected to movements seeking to “eviscerate” current legislative leadership, it involves taxpayers bailing out bad loans. It is not a core function of government to force taxpayers to bankroll activist groups and pay for loans to start-up businesses or to bail out bad loans.
The $2.5 million in taxpayer funds asked for by House leadership for the Support Center should be redirected to actual core functions of government – perhaps to help shore up mental health services or public safety.
By cutting this $2.5 million, the NC Legislature can move the current budget negotiations closer to being settled so lawmakers can pass a budget and “go home.”