Tax Day 2014


This year’s tax reform efforts will lead to a tax cut for the average North Carolina household in every income category. The benefits from these changes will more than compensate for any minor expansions of the sales tax base or the end of the state’s Earned Income Tax Credit (which amounts to an average of just 33¢ per person per day).

This afternoon, Governor Pat McCrory joined key legislators and business leaders at a press conference to mark “Tax Day” and focus on the benefits of North Carolina’s 2013 tax reform package. For more information on the details of last session’s historic tax reform changes and what they mean for North Carolina, click here.

2014 Small Farmer of the Year

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Yancey County’s Ryan Wiebe was honored last month by North Carolina A&T State University when he received the 2014 N.C. Small Farmer of the Year Award.

Wiebe (pronounced “we be”) grows USDA-certified organic produce on his six-acre farm, cleverly named Wiebe Farmin’. During the peak growing season, the farm ships 3-to-5 tons of produce every week (including squash, cabbage, tomatoes, pumpkins and potatoes) —  nearly 20 tons every year. Wiebe got his start in 2004 with the assistance of North Carolina’s Cooperative Extension Program and NCA&T.

“Ryan has established himself as one of the premier farmers in the state,” said Representative Michele Presnell. “He is giving back to the community and with his help, the next generation of farmers will see to it that the practice of farming — the backbone of the state’s economy — will continue in Western North Carolina.”

Education spending is increasing, but where is it going?

CarolinaCAN-logoThe following article is from the North Carolina Campaign For Achievement Now. It was originally published on April 9, 2014 and reappears here with the gracious permission of the author.

Over the past few years, we’ve heard anecdotes and seen national trends of rising education expenditures, and of simultaneously flat (or mostly flat) teacher salaries.

In North Carolina, total education spending in inflation-adjusted dollars has risen from $7.4 million in the 2003-2004 school year to $12 million for the 2013-2014 school year.

In the face of rising expenditures, why do our teachers remain among the lowest paid in the nation?

We assumed (and set out to find) that state, federal and local dollars were being funneled toward uses other than teacher compensation. Perhaps we were spending more on professional development, administrator salaries, or instructional materials, when research shows that rewards and incentives for excellent teachers are among the best investments we can make to improve schools.

We were surprised by what we found…and thought we’d share. It’s important to point out that our analysis is fairly cursory, as we were limited to numbers posted online by DPI (which are pretty high-level). Nonetheless, they offer enough information to see that stagnant wages aren’t due to some blatantly misplaced public investment – but rather, to rising benefits costs and an overall tough economic period for the state.

Employee compensation

After crunching the state’s education spending on total compensation from the 2003-2004 school year through 2012-2013, this is what we found:

  • Personnel salary expenditures as a percent of the state’s total education spending have dropped from 69 percent in 2004 to 62 percent in 2013.
  • Over the past decade, benefits spending as a percent of total state education expenditures has risen from 13 percent in 2004 to 21 percent in 2013.
  • Total employee compensation spending (salaries plus benefits) at the state level has remained fairly constant over the past decade. From 2004-2014, total compensation has been between 82-83% of NC’s total education spending.

Changes in total employee compensation as a percent of total education expenditures from 2004-2013
Because of the way spending is reported by DPI, we do not know how much of total salary spending is allocated for teacher wages relative to other personnel, so we used publicly available workforce statistics to test another one of our suspicions.

We wondered if the number of teachers had increased over the past decade (requiring similar funds to be spread among larger numbers of people) and if the number of school administrators (principals, assistant principals, etc) had also increased over the same period.

Education workforce

Our findings show that from 2004 to 2013:

  • The number of both teachers and administrators has gone up and down throughout the past decade. As seen in the graphs below, there was a significant uptick in both administrator and teacher hiring in the 2007-2008 school year, but a fairly steady decline since then.

Total number of teachers

We are still working through these numbers to make sense out of them and see what they mean for future teacher compensation plans. As always we appreciate your thoughts and ideas.

At CarolinaCAN, we know that investing in our great teachers is one of the best ways to achieve the greatest gains in North Carolina’s schools. We remain committed to finding the best ways to allocate precious state dollars toward that goal.

Source: North Carolina Department of Public Instruction.

This article was written by Julie Kowal. Ms. Kowal is a nationally-recognized education policy expert on teacher and leader quality, charter schools, and school turnarounds and currently serves as the Executive Director of North Carolina Campaign For Achievement Now. CarolinaCan is a 501(c)3 nonprofit education policy organization dedicated to arming state leaders with the information they need to enact policies that give every North Carolina child access to a great public school.

Prior to her position at CarolinaCAN, Ms. Kowal was with with the North Carolina-based education policy and management consulting firm Public Impact, where she led project teams on many leading education reforms in the nation. Prior to Public Impact, Ms. Kowal served as a research assistant at the UNC Center for Civil Rights and the UNC School of Government, and directed an after-school writing program in 23 Washington, D.C. public elementary schools. Follow her on Twitter @jkowal14.

Trial Court Ruling Hurts Low-Income Families, Creates Uncertainty for Private University, Pre-K Funding

Thom Tillis
Speaker of the House
Contact: Anna Roberts, Communications Director: 919-733-5917

Friday, April 11, 2014

Trial Court Ruling Hurts Low-Income Families, Creates Uncertainty for Private University, Pre-K Funding

Raleigh – Senate Leader Phil Berger (R-Rockingham) and House Speaker Thom Tillis (R-Mecklenburg) announced Friday they intend to ask the state Supreme Court to stay a lower court’s order that blocks opportunity scholarships designed to give underprivileged students opportunities for better educational outcomes. The legislative leaders also said they are considering formally intervening in the lawsuit, after Attorney General Roy Cooper refused to appeal the ruling late last month.

Berger and Tillis have serious concerns that a Superior Court judge’s basis for denying opportunity scholarships could also have the unintended consequence of endangering hundreds of millions of dollars in state funding for a host of other programs – including private university scholarships, Pre-K, Smart Start, aid to disabled and deaf children and Teach for America.

The Superior Court judge ruled that state funds for public education cannot be spent on anything other than our state’s public schools. If the wording and rationale of the ruling are upheld on appeal, it could call into question the legislature’s ability to appropriate public education dollars to private nonprofit organizations that serve North Carolina students.

“As if it isn’t bad enough that a single trial court’s ruling could trap underprivileged children in schools that don’t fit their needs for another school year, it could also potentially wipe out programs to help students all across North Carolina,” said Berger and Tillis. “We are taking action to make sure these unintended and far-reaching consequences don’t become reality.”

The list of programs that could be impacted by the trial court’s decision includes (FY 2013-14 State Funding):

    • NC Pre-K Program: $140 million
    • Smart Start: $140 million
    • Disability Scholarships: $3.7 million
    • NC Need-Based Scholarships for students to attend private universities: $86.4 million
    • Teach for America: $6 million
    • Communities in Schools: $1.5 million
    • Beginnings for Children: $920,000
    • 21st Century Schools: $28.4 million
    • TOTAL: $407 million

There’s a Tax For That!

tax-money-sack-1c-500The Revenue Laws Study Committee, a bipartisan group comprised of members of both the House and Senate, met early this morning to discuss what are known as “privilege license taxes.”

A privilege license tax is an additional fee that’s imposed on business owners by city governments for the “privilege” of either locating a business within a city’s borders or for the “privilege” of having customers who happen to live in the city imposing the tax.

Under current state law, a city has the authority to levy a privilege tax on all trades, occupations, professions, business activities and franchises carried on within a city — on top of the existing property taxes, state and local sales taxes, income taxes, franchise taxes and other taxes they must also pay. (Although state law gives counties some authority in this regard, it is both extremely limited and financially insignificant, therefore we will and not address it here.)

For example, the City of Charlotte charges more than 40,000 individual businesses a privilege license tax. 25% of those (9,017 individual businesses) are physically located outside Charlotte’s municipal borders (some as far away as San Francisco) yet are still taxed for the “privilege” of having customers who live in Charlotte. Sound crazy?

“In general,” according to Professor Christopher McLaughlin of the UNC School of Government, “any individual or entity that is ‘doing business’ in a particular municipality may be subject to privilege license taxes levied by that municipality.” (See North Carolina General Statutes Section 160A-211). For a thorough discussion of the legal issues surrounding privilege license taxes, read professor McLaughlin’s entire article here.

300 of North Carolina’s 540 cities currently charge these so-called privilege license taxes on businesses in one form or another. And despite the term “license” in its name (or the fact that these “licenses” must be prominently displayed by businesses in order to avoid facing financial penalties or even closure), the privilege license doesn’t hold any regulatory significance in terms of conferring a legal “stamp of approval” by the city. For all practical purposes, it’s nothing more than proof to city inspectors that the business is all paid up. “It’s a protection racket,” privately quipped one legislator after today’s meeting. “If the mob was doing the same thing, it would be illegal.”


A “Gargantuan” Investigation

investigationJust days after national news outlets reported on alarming evidence of widespread voter error and fraud in North Carolina, The Fayetteville Observer reported the Robeson County District Attorney’s office is launching a “gargantuan” criminal investigation into allegations of felony voter fraud.

According to the newspaper, District Attorney Johnson Britt’s office is reviewing allegations of “irregular or fraudulent activity or false statements made in an effort to influence an election.” Allegations could include people who may have been threatened, harassed, intimidated or coerced to vote in a town or city where they didn’t live, he said.

Late last year, the North Carolina State Board of Elections ordered an entirely new municipal election for the Town of Pembroke after it found irregularities when two Pembroke Town Council candidates claimed voters who lived outside town limits cast ballots in the election. A December 2013 article in The Raleigh News & Observer reported the new election was “the only appropriate remedy because of the seriousness and number of irregularities.”

North Carolina Senate President Pro-Tem Phil Berger and Speaker Tillis issued a joint statement Monday in response to the most recent news:

“On the heels of last week’s alarming report that several hundred and perhaps thousands of votes were fraudulently cast in North Carolina, it is extremely disturbing to hear of major voting irregularities that have triggered a ‘gargantuan’ criminal investigation and the redo of an entire election. It is time for North Carolina Democrats to stop insisting there isn’t a problem and start supporting common-sense efforts to restore the integrity of our elections process.”

Joint Statement on Newly Discovered, Alarming Evidence of Voter Error and Fraud

Thom Tillis
Speaker of the House
Contact: Anna Roberts, Communications Director: 919-733-5917

Wednesday, April 2, 2014

Joint Statement on Newly Discovered, Alarming Evidence of Voter Error and Fraud

Raleigh – House Speaker Thom Tillis (R-Mecklenburg) and Senate Leader Phil Berger (R-Rockingham) issued a joint statement Wednesday in response to more alarming evidence of voter error and fraud discovered by the North Carolina State Board of Elections.

Initial findings from the Board presented to the Joint Legislative Elections Oversight Committee today show:

  • 765 voters with an exact match of first and last name, DOB and last four digits of SSN were registered in N.C. and another state and voted in N.C. and the other state in the 2012 general election.
  • 35,750 voters with the same first and last name and DOB were registered in N.C. and another state and voted in both states in the 2012 general election.
  • 155,692 voters with the same first and last name, DOB and last four digits of SSN were registered in N.C. and another state – and the latest date of registration or voter activity did not take place within N.C.

These findings only take into account data from the 28 states who participated in the 2014 Interstate Crosscheck, leaving out potential voter error and fraud in the 22 states that do not participate in the consortium.

Additionally, during an audit of death records from the Department of Health and Human Services, the Board discovered:

  • 50,000 new death records that had not previously been provided to the State Board of Elections
  • 13,416 deceased voters on the voter rolls in October 2013
  • 81 deceased voters that had voter activity after they died

The findings were made possible by a new election reform law passed by the General Assembly last year, which called on the Board to improve the accuracy of voter registration lists and combat potential fraud by cross checking information on voting records with those of other states.

“While we are alarmed to hear evidence of widespread voter error and fraud, we are encouraged to see the common-sense law passed to ensure voters are who they say they are is working,” said Tillis and Berger. “These findings should put to rest ill-informed claims that problems don’t exist and help restore the integrity of our elections process. We appreciate the State Board of Elections bringing this critical information to light.”

You can hear the audio of today’s Joint Legislative Elections Oversight Committee meeting here. (Audio courtesy of the good folks at, a project of The North Carolina Center for Voter Education.)

Tillis Statement on Governor McCrory’s State Government Directive

Thom Tillis
Speaker of the House
Contact: Anna Roberts, Communications Director: 919-733-5917

Thursday, March 27, 2014

Tillis Statement on Governor McCrory’s State Government Directive

Raleigh – The following statement is from House Speaker Thom Tillis (R-Mecklenburg) regarding the Governor’s directive to enact budget management initiatives for the remainder of this fiscal year:

“I applaud the Governor’s leadership and prudence in monitoring the state budget and exercising fiscal responsibility to ensure we can maintain our important government responsibilities and functions to the citizens of North Carolina. We are pleased that the balance sheet is moving in the right direction and that steps are being taken to ensure that remains the case.”

How will Obamacare affect us in NC?

Video courtesy of UNC-TV: North Carolina legislative leaders have created a special oversight committee to study how the federal Affordable Care Act is – and could – affect North Carolinians, state health care budgets and the state’s overall economy. Expert testimony before the committee paints a bleak picture of job losses but Democrats suggest the Republican leadership isn’t interested in taking a balanced approach to studying the Affordable Care Act. Kelly McCullen follows the debate for UNC-TV.

On January 13, Speaker Tillis and Senate President Pro-Tem Phil Berger announced the formation of a Joint Legislative Study Committee to investigate the impacts of the Affordable Care Act on North Carolina. The committee was formed to explore the real-world impacts that the Affordable Care Act is having on North Carolina’s economy and citizens through disruptions in the insurance marketplace, dropped coverage for families and higher premiums without improved access to providers.

“It’s important for states to fully understand the impact Obamacare will have on our citizens, their jobs and on our state government,” said Speaker Tillis after the committee’s first meeting on March 18. “As we deal with budget issues in the coming months, we need to know how much Obamacare is going to cost the state. This initial meeting is an important step in assessing how we adapt to minimize the impact on North Carolinians.”

Why Didn’t NC Expand Medicaid?

On March 6, 2013 Governor Pat McCrory signed into law legislation which clarified that the State of North Carolina would neither expand Medicaid nor pursue a state-based health care exchange under the federal “Affordable Care Act.”

Since then, activists who opposed the move have tried, unfortunately, to politicize the issue by ignoring or intentionally misrepresenting the facts. But like so many other difficult public policy decisions (especially ones involving billions of taxpayer dollars), the reasons behind it are far more sobering and far more complex — and not easily communicated in a sound bite or a Tweet.

Medicaid currently costs North Carolina’s taxpayers over $13 billion a year; Speaker Tillis and the General Assembly (which serves as the state’s “Board of Directors”) want to be sure that your tax dollars are being spent in the most efficient and economical way possible. We hope you’ll take a few minutes out of this beautiful Carolina weekend to read this rather lengthy post in order to get a more complete perspective on this very important issue.