We’ve heard complaints about teacher salaries, which have left us with a shortage. Not true. Between 2010 and 2016, 11,936 out-of-state teachers came here while 4,050 left for another state. North Carolina had a net gain of nearly 8,000 teachers. Efforts since 2013 have resulted in bringing the annual average pay in the $50,000 range, with promises to increase that to about $55.000.
Opponents of opportunity scholarships and charter schools say school choice hurts education. But more than 1,200 low-income students attended a private school the first year opportunity scholarships were available. This year, 6,200 students are being served, and nearly 23,000 students have submitted applications since 2014. Applications to the 420 registered private schools far outweigh available slots. Last year, the General Assembly committed funding for 2,500 additional scholarships per year for the next 10 years. Parents offer the ultimate accountability.
New legislation reduces the seats on the state Court of Appeals from 15 to 12. This would not be the first time for changes. The court had six members in 1967. That increased to nine in 1969, and to 12 in 1977. In 2000, it increased to 15. The court’s workload has decreased 22 percent between 2006 and 2016.
Here’s another example. Tax cuts implemented since 2011 have benefited millionaires and corporations at the expense of everyone else. False.
In 2011, the sales tax was rolled back, giving everyone a break — $1 billion of relief, benefiting low-income earners the most. The sales tax later was expanded to more services, lowering the overall burden.
In 2013, North Carolina’s personal income tax went from three progressively higher rates to a flat tax rate of 5.499 percent. In addition, the standard deduction, or zero tax bracket, has expanded. While all categories of taxpayers get a break, the amount of income completely exempt from taxes has gone from $3,000 to $8,750 for a single taxpayer. Under current law, that single taxpayer making $25,000 a year pays an effective tax rate of 3.6 percent; a single taxpayer earning $120,000 a year pays an effective tax rate of 5.1 percent. So, the notion tax breaks are only for the wealthy is nonsense.
The corporate income tax has been reduced from 6.9 percent to 3 percent, the lowest of any state that imposes a corporate tax.
Further tax relief under consideration this session would lower the personal income rate to 5.35 percent, increase the standard deduction for married taxpayers filing jointly from $17,500 to $20,000, and reduce the corporate rate to 2.75 percent in 2017 and 2.5 percent in 2018.
The Senate tax plan proposes $1 billion in tax relief over the biennium. A report by the General Assembly fiscal research staff predicted a budget crisis with large revenue shortfalls — $600 million in three of the five years — but the assumptions were flawed.
It assumed that state government would continue providing the same services the same way to more people at higher cost over the next five years, leading to 4.8 percent higher spending each year. Due to fiscally responsible measures from 2013, the budget growth is now based on available money, not assumed continuation of programs. In addition, the annual growth for the two years ending June 30 is 2.6 percent. If we assume leadership keeps growth to 2.6 percent, the projections change considerably.
Using the revised growth percentage, the projection under the Senate tax plan would result in a $145 million revenue shortfall the in 2018-19, easily covered by unreserved cash from the previous year, and then revenue surpluses of $800 million by 2021-22.
Becki Gray is senior vice president of the John Locke Foundation.