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Want to hurt NC public schools? Cut the income tax cap.

In November, NC will vote on whether it should reduce the income tax cap from 10% to 7%. The article, written by Leah Abrams, argues that doing so will damage the public education system within the state. A third of the money from the current income taxes goes directly to schools.

One of the critical issues with the state income tax, according to Abrams, is that it's one of only 6 statewide flat-tax rates- as most of the country uses income brackets to determine the rate. The low state rate of 5.5 is decidedly regressive.

I agree with her analysis, that the reduction in taxes will cause disparities in education, and could harm communities that are already dealing with issues of inequality due to wealthy neighbors. I also agree that the flat tax indeed becomes regressive, as the wealthiest people end up with the same tax rate as the poorest. A statewide cap drop from 10 to 7 means that local communities would not be able to reap nearly as much income. Some communities could raise other taxes, but poorer communities, with less desirable property, will not be able to reap the benefits of other sources of funding. We will see how the state votes in the next few weeks.

SC has an extra $177 million. Here's how it might get spent. 

This past July, SC's general fund closed this year at over $8.1 billion, and reported a $177 million surplus. The chief budget writer has a 4 point plan that is recommended for the state, including several big expenditures: three new nursing homes for veterans, and 13,000 voting machines. These would make up about half of the total surplus.The budget writer also wants to renovate aging school structures in poorer districts, that can't do so themselves; as well as start a state run matching-grant program for volunteer-run fire departments.

However, there has been much debate from lawmakers about whether this is the right path. Many want to use the temporary surplus for more long term goals, such as pay raises for state workers. The current governor also followed this school of thought, suggesting income tax cuts for several different groups, including first responders.

The state will critically have to decide how to spend such funds. I agree with the budget writer, as well as many others, that these temporary funds should go to critical, immediate, and one-time purchases- not to those that will compromise future budgets, such as pay raises.

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