RALEIGH – It looks like North Carolina will have a budget surplus for a fifth year in a row, at least according the the non-partisan Fiscal Research Division of the N.C. General Assembly. Being that this continues a trend Republican majorities started with tax and regulatory reforms and spending restraint, it is not altogether surprising. What is surprising, however, is the size of the surplus – $700 million.
From the Associated Press:
“North Carolina tax collections are on track for the state to post its highest surplus since the Great Recession.
‘Extraordinary growth’ in year-over-year final tax payments during April means the state ultimately may collect over $700 million above what budget-writers projected last summer to pay for the current year’s budget, General Assembly economist Barry Boardman told legislative leaders. Collections usually pegged to the April 15 tax deadline are historically considered the most unpredictable.
The potential over-collections, equal to roughly a 3% revenue increase, mark a state government revenue surplus for the fifth year in a row and highlight the continuation of stable, modest growth in the state economy. […]
Last year, there was a surplus of $440 million. […]
In an email, Boardman attributed the revenue growth to final individual income tax payments, particularly from taxes on transactions like capital gains and dividends. Those April payments alone were $395 million projections and 46% above what was collected last year. Taxes taken from wage and salary income — usually from paycheck withholdings — have remained very close to forecast totals, Boardman said.
Corporate income tax payments in April also were 42% higher than last year and $75 million above projections, his email said.”
It’s worth reiterating that each and every time Republican majorities on Jones Street advanced tax cuts of any kind Democrats were quick to assume the role of Chicken Little. They predicted revenues would plummet, deficits would return, the State’s stellar credit rating would be lost, and core government functions would be threatened. Indeed, they claimed the sky would fall.
Except, each and every one of those predictions were proven wrong. Governor Roy Cooper’s budget director exclaimed that Republicans’ tax moves would result in a $600 million shortfall by 2019. To his credit, he nearly got the number right, but in the wrong direction. Somehow, a less tax happy (letting people and businesses keep more of THEIR OWN money) government enables a flourishing of economic activity.
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The NCGOP is right to point out the contrast between Republicans and Democrats like Cooper and his bureaucrats.
From NCGOP spokesman Jeff Hauser:
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