State leaders must create a budget that meets the population’s needs and allows them to make the investments that will prepare North Carolina for future prosperity. But these goals are made more difficult to achieve by the state’s deteriorated revenue system, which even in the best of times cannot produce the resources required for education, public safety, health care, transportation and other necessities for a strong economy. It’s not that taxes are too high or too low; the problem goes deeper than that. Whether one thinks North Carolina should spend more or less than it does today, the state needs a tax system that can raise adequate revenue and do it in a way that treats taxpayers equitably.
North Carolina’s revenue system is no longer in line with the state’s economy and asks more from those with the least ability to pay. As devastating as the Great Recession continues to be for North Carolina’s economy and state revenues, comprehensive revenue reform along the lines of what is proposed in this report would have eliminated a substantial portion of this year’s revenue shortfall while ensuring that North Carolina could continue to invest in the public structures that will help pave the way to economic recovery and prosperity.