Earlier this year, at least 25 states were projected to face revenue shortfalls as they entered their 2018 legislative sessions.
However, according to the General Assembly’s Fiscal Research Division, North Carolina is not one of them. Currently, North Carolina’s revenues are $190.6 million above projected revenue.
SOURCE: Office of the State Controller; General Fund Monthly Financial Report. The graph above compares the year-to-date tax revenues for the current and prior fiscal years.
That is quite an impressive feat, and a testament to economic growth, when you consider that North Carolina has passed four major tax cuts (2013, 2015, 2016 and 2017) in the past five years.
Even more impressive is the fact that we have seen multiple consecutive years of revenue surpluses (2015, 2016, 2017) in North Carolina.
To be clear, a revenue surplus is not the same as a budget surplus. A revenue surplus occurs when state government accrues more revenue than anticipated. A budget surplus occurs when state government spends less money than anticipated and meets revenue targets.
More Tax Cuts Coming
It is also important to note that corporate and personal income taxes will drop on January 1, 2019. The current corporate income tax rate is 3 percent (the lowest of any state with a corporate income tax) and will drop to 2.5 percent in 2019. The personal income tax rate will drop from 5.499 percent to 5.25 percent in 2019, while the standard deduction will increase for all taxpayers.
Don’t believe the fiscal fear-mongering of the progressive left. North Carolina is in good fiscal health with a bright future.
Leave a Comment