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:
“The predictions from Governor Cooper’s failed budget director were off by over a billion dollars. Any credibility that Cooper had on budget issues is now spent. The report from the nonpartisan staff shows that the Republican reforms put into place over the last five years have resulted in some of the fastest economic growth in the southeast. All of this happened while Republicans lowered taxes so people could decide how best to spend their own money while increasing investments in education and teacher pay. This is responsible budgeting at work.”
A fifth year of surpluses represents a great trend, but it does beg the question: With such consistent revenue overshoots, why aren’t Republicans continuing to lower the tax burden on individuals, families, and businesses with the same fervor they demonstrated in 2013-2015?
Better yet: At what level of a surplus is a tax rebate warranted? You know, giving some of this money back to the people that earned it in the first place.
The latter question is is likely ‘out of the question,’ even with Republicans. After all, these same Republicans loaded up last year’s modified budget with $30 million of pork; politicians will find a way to spend your money, surplus or not.
Further, these surpluses are being realized even as spending has continued to grow. Granted, Republican legislative leaders point out that spending growth, at most, matches growth in population and inflation, but you can’t tell me there aren’t ample opportunities for actual spending CUTS. Imagine how large the surpluses could be if Jones Street demonstrated the political will to actually shrink the size and scope of government.
Instead, we have handfuls of Republicans drawing up their own plans to expand healthcare entitlement programs to compete with Democrats’ Big Government dreams, and a status quo of perpetually raising allocations to an nauseatingly long list of government programs. This year, a biennial budget year in which the two-year budget is drafted and passed by the legislature, the total annual spend will be around $25 billion.
We at First in Freedom Daily like to see government budget surpluses (versus deficits) after years of tax decreases. It’s definitely worth bragging about. However, we would LOVE if that surplus went back to the very North Carolinians that earned it, and were forced to fork it over to the State of North Carolina.
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