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Tax revenue revised down, slightly, still forecasting ~$1 billion surplus



Carolina Journal

Staff


The Office of State Budget and Management (OSBM), along with the Fiscal Research Division of the NC General Assembly, announced Friday downward revisions to their consensus tax revenue forecast for the biennium. The adjustments, representing a less than 1% change, were due to lower than anticipated processed tax filing revenues following the April 15 tax deadline.


“April, when income tax returns and payments for the prior tax year are due, is the most uncertain month for revenue collections,” reads the report. “The [Consensus Forecasting Group] issued the April 2024 consensus forecast before the Department of Revenue began processing the bulk of those payments, which required the CFG to project the amounts for those payments in the forecast.


When those collections were processed, CFG officials say, the actual numbers fell short of expectations set by their previous consensus forecast. As a result, they have what they describe as a “modest downward revision to the General Fund Forecast of $225 million (0.7%) in the current fiscal year and $205 million (0.6%) in the next fiscal year.”


Republicans hold a veto-proof majority in the General Assembly, giving them full discretion on spending priorities.


In addition to possible raises for state employees and teachers, current items on the table for budget adjustments are additional funds for North Carolina’s Opportunity Scholarship Program, which exhausted this year’s funding following a deluge of applicants for the universal school choice program; possible tax rebates for those earning the money paid into government’s tax coffers, in light of the aforementioned surplus revenues; and, weighing planned taxpayer gifts to special projects, such as NCInnovation’s slated $250 million payment, versus the economic needs of North Carolina’s taxpayers.

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