INNOVATIVE IDEAS FOR A CHANGING NORTH CAROLINA
9 Innovative Ideas that Won’t
Bust the Budget
Just because North Carolina is facing a budget crunch
Timely, doesn't mean state lawmakers' hands are tied. With
fresh ideas, state government can create a better future
for working families without substantial new spending.
The NC Budget & Tax Center (BTC) has compiled Working Concepts, a list of innovative initiatives
analysis of to improve the lives of North Carolinians at little to no cost. In certain cases, these policies would
state and local actually increase revenue while enhancing quality of life.
budget and tax Common threads run through each of the initiatives. They will help state and local governments
spend each dollar more efficiently, assist workers by creating high-quality jobs and more effective
issues transportation solutions, and empower political leaders with forward-thinking tools to help low- and
At a time when the state is facing massive demographic changes and growth, meeting the
challenges of a new era requires new approaches. The following recommendations from the BTC,
a project of the NC Justice Center, will address some of North Carolina's most critical and pressing
concerns -- without busting the budget.
• Modernize the State's Transportation Finance System - Closing a loophole in the state's
vehicle sales tax, enacting some reasonable increases in the Highway Use Tax, and
reforming vehicle registration fees could raise considerable revenues. These funds increase
the state's debt capacity enough to pay for a large transportation bond. This would enable
North Carolina to fix its deteriorating transportation infrastructure, invest in public
transportation, and fund refundable tax credits for low-income households to offset the tax
and fee increases.
P.O. Box 28068 • Fund Metropolitan Transportation Based on Road Use - The current transportation
Raleigh, NC funding system is not coping with rapidly increasing costs and spiraling transportation
27611-8068 demand, including calls for more public transportation. Unfortunately, taxing road use using
Editor: Elaine Mejia
GPS technology is still many years away. What can be done now is assessing fees on real
property based on the amount of traffic the property generates. Such a property-based traffic
www.ncjustice.org fee is an ideal metropolitan area revenue source for both public transportation and road
construction or maintenance that could also supplement existing taxation sources.
• Grow a "Green" Workforce - To realize the environmental and economic benefits of the
emerging "green" economy, North Carolina must develop a workforce skilled in vital
technical fields. Building such a workforce requires the state to reinvigorate the community
college system's technical training programs and help to create the market for appropriately
• Guarantee Paid Sick Days - Working families are struggling to meet the competing
demands of work and family. Giving every worker the opportunity to earn a reasonable
amount of paid sick time will benefit families and their employers, who will have more
reliable, healthier workers who are less likely to leave. Paid sick days will also improve public
health by reducing the spread of illnesses.
• Integrate Economic Development and Workforce Education - Growing industries
across North Carolina are struggling to find workers with the technical skills taught at the
state's community colleges. Additionally, North Carolina has thousands of low-wage workers
who, with appropriate education, could fill their needs. Integrating economic development
and workforce education through "sectoral partnerships" could ensure the supply of skilled
workers demanded by industries.
• Link Business Subsidies to Adequate Wages - North Carolina spends more than $100
million a year subsidizing businesses that all too often don't pay their employees enough to
sustain a family. Business subsidies should be viewed as an investment in the state's economy,
and state leaders must make sure taxpayers are getting good-paying jobs for their money.
• Maximize Investments in the Unemployment Insurance System - Financing the state's
unemployment insurance system in more adequate and equitable ways would allow the
system to better assist jobless workers and distressed local communities. Ensuring that all
employers pay a fair share and that the system is funded for the long-term would maximize
the system's ability to mitigate the effects of economic downturns.
• Empower Local Elected Officials to Make Revenue and Spending Decisions - North
Carolina's counties are facing new challenges, like greater demand for schools, deteriorating
infrastructure and increased responsibility for road maintenance and construction. Yet, the
state legislature has failed to provide local leaders with sufficient authority to raise new
revenue. Local leaders in all 100 counties should be given the authority to enact a slate of
progressive revenue options and the flexibility to spend the revenue in a way that works best
for meeting the needs of their communities.
• Equip Lawmakers to Make Better Informed Tax Policy Decisions - North Carolina's
lawmakers do not have the tools nor are they required to properly evaluate the impact of tax
policy proposals that come across their desks. The result is ill-informed tax policy debates that
do not take into consideration the effect proposed changes would have on their constituents.
The state should build the capacity to analyze the impact each proposed tax change would
have on North Carolinians, divided by income groups, and then require this information to be
attached to every revenue bill introduced. This "tax incidence analysis" would lead to