At this week’s Moral Monday rally, Senate leader Phil Berger surprised protesters by meeting with teachers and parents who had planned to stage a sit-in outside his office. During the discussion, Berger handed out a 24-page “amendment” to the Senate budget that he claimed represented the demands of the Moral Monday movement.
“We were unable to find a sponsor,” Berger said, noting that the legislature’s fiscal research staff had determined the changes would require a corporate tax rate increase from 6 percent to 50 percent.
But Alexandra Sirota, Director of the NC Budget & Tax Center, has a different take on the numbers. In an analysis posted to NC Policy Watch, Sirota concludes that “barring two sections which have no basis in the Moral Monday agenda, [Berger's proposal] is not only revenue neutral but provides for additional revenue to meet the state’s pressing needs.”
Via NC Policy Watch:
First, it is important to note that the amendment was drafted without a prior conversation with Moral Monday protestors about the specifics of their policy proposals and makes various assumptions, some false or exaggerated, likely for effect. Two particularly egregious examples are in the assumption that government should pay the health insurance premiums on the private sector market for uninsured North Carolinians and that the corporate income tax rate should be 50 percent. These two provisions are likely tied together in that in order because boosting the corporate income tax rate to 50 percent would cover the of the premium payments, thus keeping the budget in balance.
The Moral Monday movement and many other organizations and medical professionals have called explicitly for the expansion of Medicaid and an overall goal that all North Carolinians should be able to access affordable health insurance. The latter is something to aspire to and most policy experts in the field would design a system of coverage in which people contribute to their premiums. No one has suggested that people not contribute to their own premiums. Moreover, it is likely that with the expansion of Medicaid along with the availability of the health care exchange far fewer North Carolinians would be eligible under the provision as detailed in this amendment.
There has never been a call for the corporate income tax rate to rise to 50 percent but rather a call for profitable corporations to pay their fair share in supporting the public investments that not only help their businesses thrive—educating the workforce and building a modern infrastructure—but deliver a quality of life for their employees.
Importantly, too, there are some provisions such as the elimination of the unemployment insurance cuts made last year that have no impact on the state’s General Fund. By undoing the harm of these cuts, policymakers would be ensuring that jobless workers have temporary and adequate support while they search for work in a job market with too few jobs for those who want to work. The Trust Fund debt could then be paid down by employer’s automatic contributions by federal law, a debt that was driven by tax cuts for employers in the 1990s and historic job loss. Of course, alternative approaches to the unemployment insurance debt have been proposed and not considered.
Read the full fiscal analysis:
NC Policy Watch – A fiscally responsible way exists to address Moral Monday priorities
“What this analysis from the NC Budget & Tax Center shows us is that we can repeal and reverse course in North Carolina away from these regressive policies; we only miss the political will to do so,” NC NAACP President Rev. William Barber said in a statement. “Senate Leader Berger has distorted the numbers in order to avoid doing the moral thing in this State House, but we will not be fooled and we shall not be moved from our petition to stop helping corporations and the wealthy at the expense of hardworking families.”
Berger’s draft amendment:
Fiscal note on the amendment: