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

Thousands of educators march in Raleigh and demand respect

On Wednesday May 16, 2018, the opening day of the legislative session, educators and their supporters from across the state traveled to Raleigh to demand more funding for public education.
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On Wednesday May 16, 2018, the opening day of the legislative session, educators and their supporters from across the state traveled to Raleigh to demand more funding for public education.

This November, North Carolina voters will cast their ballots on six constitutional amendments. They range in scope—from a constitutional right to hunting to a constitutionally-enforced voter suppression tactic—but all are desperate North Carolina GOP attempts at maintaining power in a state that increasingly repudiates its politics.

In typical N.C. General Assembly fashion, most of these amendments are worded, diabolically, to sound harmless on paper. One in particular—Senate Bill 75—sounds great. The amendment proposes to cap state income tax at 7 percent—a reduction from the current 10 percent cap. The amendment is appealing—after all, who likes taxes? But in the long run, it will ingrain a heaping disparity in our public school system.

I grew up in North Carolina public schools. From kindergarten to senior year, I walked their halls and bothered their teachers. I read their textbooks and camped in their libraries. My public schools gave me the knowledge I needed to navigate an ever-complicated world, and the confidence in myself to do so.

In 1868, North Carolina became one of the first states in the nation to recognize education as a constitutional right. Our state’s commitment to public education goes back even further—UNC Chapel Hill was chartered in 1789, becoming the first public university in the states. Its funding was protected and reinvigorated in the progressive 1868 constitution, which outlined a detailed Board of Education system.

Public schools are integral to our state culture. So, what do public schools have to do with a proposed income tax cap? In short, everything. Education is our state’s second highest budget expenditure. Each year, all of our well-earned income taxes are collected to fund the state—and over a third of that money goes directly toward our public education system. This is the money that pays our teachers, principals and counselors.

As it stands, our state income tax policy is already regressive. The current income tax rate clocks in at just below 5.5 percent, and we are one of only six states across the country that enforces a flat tax rate—we don’t bracket our tax structure. Effectively, this means that Duke Energy CEO Lynn Good, who made more than $21 million in 2017, pays the same tax rate on her income as a public school teacher does.

In states like California and New Jersey—whose education systems are ranked 37 and 31 spots ahead of ours, respectively—income tax is bracketed by income level, with top brackets paying up to 13 percent in state income tax—nearly triple our flat rate. A top tax rate as high as 13 percent could buy computers, books, pencils and field trips for millions of K-12 students in North Carolina.

The problem with this amendment is that, in a time when more start-ups, researchers and well-established corporations are headquartering in our state, this constitutionally-backed income tax ceiling would only serve to intensify the chasm dividing rich and poor school districts.

In all honesty, my school district will be fine. I grew up in Chapel Hill, a wealthy district where the county will be able to raise property taxes enough to make up for the dismal lack in funding from the state. Last year, the Chapel Hill-Carrboro City Schools budget relied on over $10 million more in local revenue than state revenue.

Most districts, however, will not be so lucky should this amendment pass. Without redistribution efforts from the state, rural school districts will be left to fend for themselves as their urban neighbors’ income levels soar. Families living in these districts will continue paying the flat income tax rate, but their districts will be unable to make up for disparate local funding levels.

This amendment will make poor schools poorer, and rich schools richer. We should be proud of our public education system. Income taxes aren’t the most glamorous issue, but they will almost certainly make the difference between staggering inequality and prosperous, equitable growth.

Leah Abrams, a 2016 graduate of Carrboro High, is a junior at Duke University.