RALEIGH – The Fiscal Research Division of the N.C. General Assembly issued its 2017-2018 fiscal year report Monday in which it announced the state collected $400 million more in tax revenues than it originally expected.
That’s after multiple tax reduction reforms that elicited hyperbolic warnings of revenue shortfalls and insolvency from Democrats in the Old North State.
From the report:
“FY 2017-18 Revenue Results
FY 2017-18 General Fund revenue collections totaled $23.56 billion, which was
$400.2 million higher than the certified revenue for the fiscal year. The $400.2
million in over-collections was $43.5 million higher than the recent revised forecast
had projected (the revised forecast projected over-collections at $356.7 million).
Typically, end-of-fiscal-year revenue estimates made after April’s collections are
accurate within a range of $15 – $25 million. This year’s estimate fell outside that
range primarily due to unusually-low Sales tax refunds in June.”
Edging close to $24 billion in collections, it makes one wonder if taxes shouldn’t be cut drastically more than they already have been. The flip side of the ledger, though, is spending, and we all know too well that politicians – from county commissions to the state legislature – are fond of finding ways to spend money.
Still, that $400 million is surplus revenue does not belong to the State; it belongs to the individuals from which it was taken, and it should be given back to them.
Five years after the tax cutting by Republican began in earnest, the revenues from the dramatically reduced income tax rates have continued to rise. The 2017-2018 fiscal year saw income tax revenues exceed revised expectations by 1.4 percent.
While the forecasters at Fiscal Research use a conservative approach, which helps in maintaining fiscally conservative budgeting by lawmakers, their initial predictions have gotten marginally closer to the final mark over the last several years.
In a state growing in production and population such as ours, increases in tax revenues (and spending) can be expected. However, even though tax rates have fallen substantially, the overall take the Old North State gets from all of the hard work of North Carolinians is still disconcerting.
This is mostly money taken from one person, and given to the other, whether it be for healthcare subsidization of millions or building a dog park for the Great Smithfield-Selma Chamber of Commerce.
According to the report, lawmakers will have even more money to play around with next time. The projected surplus for the 2018-2019 fiscal year currently stands at nearly $270 million, and could rise further.
To be sure, these reports would look very different if Democrats had their way. According to their own stated policy desires, they’d spend billions more to redistribute in myriad ways and they’d soak the “rich” to pay for it.
Except, unlike the pleasant fiscal and economic side effects of letting people and businesses keep more of their money, plans to take more money from those that the Left call “rich” often has the opposite effect. The higher rates stifle economic activity, negatively influence business behavior, and leave Democrats scratching their heads because they never consider that they are taxing people, not income producing robots. That leaves them with big spending plans that can easily dwarf what the state ends up collecting in taxes.
I’ll take the lower taxes and $400 million surplus every time.