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Governor’s budget sacrifices human services to cut business taxes.

By Chris Fitzsimon

[05.13.04] — All the buzz about the recently convened General Assembly session has focused largely on what is being described as a $200 million surplus in state revenues and proposals to reduce business taxes, either with a reduction in the corporate tax rate or a tax reduction aimed at small businesses.

The small-business reduction is Gov. Mike Easley’s plan.

Any surplus is welcome news, especially after several years of massive budget shortfalls that resulted in deep cuts to human-service programs that were already underfunded.

The problem is that the $200 million won’t even cover the mandated increases in next year’s budget for items like enrollment increases in public schools, not to mention raises for state employees, who haven’t had a pay hike in three years.

Those mandated items and raises add up to $800 million, four times the alleged surplus.

The budget recommendations Easley presented to legislators this week would cut as much as $350 million from state programs to balance the budget and pay for his proposal to cut business taxes.

Easley couldn’t find enough money, or more correctly, couldn’t find enough courage to find enough money, to increase funding for affordable housing, or reduce the waiting list of children needing day-care services.

His budget does include enough money to continue those services to children who currently receive them and, to his credit, his proposal points out that 24,000 children remain on the waiting list.

Easley’s budget proposal is just the beginning.

Legislative leaders have reportedly asked the state Department of Health and Human Services to come up with another $91 million in cuts beyond Easley’s proposal to pay for as-yet-unrevealed legislative priorities.

Human-service programs are always where the cuts are made, programs already unable to provide basic services to people struggling to find affordable medicine, decent housing or mental-health services.

In other words, people without lobbyists.

Those programs took the brunt of the roughly $1 billion in cuts made each of the last three years by the General Assembly.

Now those programs may be cut further to reduce taxes on businesses.

Lawmakers need to stop looking for budget cuts to pay for tax reductions and start finding ways to take care of the people suffering in North Carolina.

Even if they don’t have lobbyists.


Chris Fitzsimon is director of NC Policy Watch, a program of the A.J. Fletcher Foundation, which publishes the Philanthropy Journal.

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