House and Senate budgets essentially the same at their core
Published June 13, 2014
by Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, June 12, 2014.
Most of the talk in Raleigh these days is about how different the House and Senate budgets are and speculation about how difficult it will be for the two sides to reach a final budget agreement to send to Governor Pat McCrory.
And the two budgets do seem far apart. Senate leaders want to kick aged, blind and disabled people off of Medicaid and fire 7,400 teacher assistants to come up with the money to give teachers an 11-percent pay hike if they agree to give up career-status protections.
House leaders want to give teachers a 5-percent raise and pay for it by increasing lottery revenues and cutting more from the university system.
There are dozens of other differences but those are the high-profile decisions that have received most of the attention.
But there are common threads running through both spending plans, too, and one stands out. House and Senate leaders agree that last year’s massive tax cuts that went primarily to the wealthy and big corporations were not enough.
Both budgets leave in place the next round of cuts to the personal and corporate income tax rates that take effect January 1st of next year with a cost that’s roughly the same as the extra money the House would raise by increasing the advertising budget of the lottery that is played disproportionately by the poor.
That’s the real agreement between House and Senate leaders, that folks at the bottom of the economic ladder must bear the burden of paying for a teacher salary increase and another tax cut for the wealthy.
The Senate does it by slashing services to the most vulnerable people in the state. The House does it by encouraging low-income families to spend more of their meager income on a one-in-a-100-million chance that they will strike it rich.
Both budgets make it harder for low-income families to receive child-care subsidies and both make more cuts across state government, most of which translate into fewer services for people who are struggling. The House budget also redirects lottery money away from financial aid for students in the university system.
And most tellingly, neither budget extends the state Earned Income Tax Credit that helps almost a million low-wage workers in the state including roughly 70,000 military families. The House Finance Committee rejected an attempt to amend the budget to extend the EITC.
Former President Ronald Reagan called the federal Earned Income Tax Credit the best anti-poverty program that Congress ever came up with because it helps families by rewarding hard work. The state EITC did that too, though that point seems lost on many lawmakers.
Some members of the Finance Committee said they opposed the EITC because it “works against empowering people to work,” which is exactly the opposite of what it actually does.
Soon House and Senate leaders will huddle in backrooms to come up with a final budget plan that resolves the differences between the two sides’ proposals and gives teachers a meaningful raise.
But unless they change their direction soon, they will also decide how to make low-income families pay for it.
For all the talk about the differences between the House and Senate spending plans, at their cores, they are the same. The wealthy gets another tax cut on the backs of low-income families as the rush to a more regressive North Carolina rolls on.
