I-Team: State pay raise put to reality check
RALEIGH (WTVD) -- Lawmakers say one of the biggest selling points of the new state budget is the $1,000 raise for all state employees, but do the numbers add up?
Most state employees would say every dollar counts, and they're glad to get the raise. However, after figuring in the state's new tax code, for some there may not be a raise at all.
Paging through the state's new tax laws, Cedric Johnson found a problem for state workers looking forward to their raises.
"Particularly low and moderate income families, those with multiple children, two or more children," Johnson explained. "They will find themselves paying more, even with the new pay raise."
According to the Liberal Budget and Tax Center's new pay raise calculator, the average state worker will see a net decrease in income after the pay raise. The calculator figures in the Republican-backed tax overhaul from last year which expanded the state sales tax, eliminates the earned income tax credit, and lowered personal and corporate income taxes.
The average state employee, who is married with two children and making $42,000 a year, would see their pay go up to $43,000, but the new tax laws result in an additional tax burden of $205.
Those kinds of cases would be rare according to conservatives who support the tax reform measures.
"There could be very isolated incidents," says Brian Balfour, with the conservative Civitas Institute.
Balfour argued the tax changes will spur business growth, investment and higher wages that will benefit all workers in the state.
"When you're doing an analysis and not taking that into account, you're really overlooking the whole purpose of the tax reform itself," said Balfour.
The raises will result in about $38 extra in every paycheck for state workers, but there are new questions about how much of that money you will actually get to keep.
