By CLC staff
The latest consensus revenue forecast was released today, reflecting the economic growth in North Carolina. The forecast shows that the state has a one-time $1.4 billion surplus.
Collections (i.e. taxes) will exceed the amount of revenue anticipated by nearly $415 million for the current fiscal year, which ends on June 30. The state is now also projected to receive $1 billion more in collections in the upcoming fiscal year, which starts on July 1. This represents a 2.2% and 3% increase, respectively.
“Today’s revenue forecast is a sign that North Carolina is on the right track,” commented House Speaker Tim Moore. “Our conservative approach to responsible spending has been effective in strengthening our economy and attracting business to our state. When those businesses bring thousands of jobs to NC and our economy is strong, all of North Carolina wins.”
This year’s numbers are the latest in a decade-long run of record revenue surpluses produced by the conservative General Assembly: last year, the state saw a $3.25 billion surplus; the year before that, nearly $3 billion.
Since 2013, the reform majority in the General Assembly has lowered individual income taxes from a high of 7.75% in 2010 to 4.6% this year. The state’s corporate income tax rate went from a high of 6.9% in 2010 to the current 2.5% (the lowest in the country among states that collect corporate income taxes) and North Carolina is slated to eliminate it entirely by 2030.
North Carolina operates on a biennial budget, meaning that it covers two fiscal years (adjustments are made by the legislature in the second year, during the so-called short session); the current year’s budget is nearly $30 billion.
Revenue forecasts (and sometimes subsequent revisions to those forecasts) are estimates of the amount of revenue that will be available for the budget. These figures are produced several times a year by the state’s Consensus Forecasting Group, which is comprised of economists from both the executive branch (the Office of State Management and Budget) and the General Assembly’s non-partisan Fiscal Research Division.
