In the most recent N.C. Consensus Revenue Forecast, the Tarheel state boasts a revenue surplus of $150 million as well as “solid employment and wage growth.”
“Results for the public and private sector are what really matter,” State House Speaker Tim Moore (R-District 111) said in a statement. “People are paying lower taxes in North Carolina and benefitting from a smart approach to state government and economic growth.”
Highlights from the report:
- General Fund revenue is expected to increase by $1.7 billion and reach $25.8 billion by the end of FY 2020-21
- Consistent, solid economic growth will continue throughout the upcoming biennium
- FY 2018-19 collections are expected to be above the budgeted amount by $150.8 million (0.6%)
- Stable, modest growth is expected to continue during the upcoming biennium
- General Fund revenue is forecast to increase by 2.2% over the amount collected in FY 2017-18
- Employment should increase during both years of the 2019 biennium
- The state’s economy has made steady gains since the end of the Great Recession in 2009 by adding 75,000 to 95,000 jobs per year
- Strong sales tax growth; Partial credit is given to the June 2018 U.S. Supreme Court ruling (Wayfair) about online sales tax collection
The new forecast report is in line with the previous one. The January 2019 report stated “the economy is stronger now than it was a year ago,” and that the state’s economy “is growing at a steady, solid pace.”
Moore’s statement also seemed to respond to recent remarks by Governor Cooper endorsing big labor agenda items like raising the minimum wage and to an economic progressive wish list bill filed by statehouse Democrats.
“Those calling for drastic change in our economic approach are calling for a change in these positive economic outlooks and budget surpluses,” Moore said. “It is essential our state maintain financial flexibility and not return to days of higher taxes and wasteful spending and deficits.”
The N.C. Consensus Revenue Forecast is at odds with the Governor on employment and wages.
The report says that wage growth has been below expectations, but that recent data says is starting to change. The report cites the U.S. Bureau of Labor Statistics, noting that “inflation-adjusted average hourly wages increased by 1.6% in 2018.”
Also, the forecast report expects employment to “experience steady gains of 1.2% in each year of the biennium.”
A forced minimum wage hike such as the one proposed by state Democrats and supported by Governor Cooper would likely kill off that employment growth.
Moore also noted that since taking over the majority in the General Assembly, the state has paid down billions in debt, replenished the ‘Rainy day’ fund, and put back in order the financial systems for programs like Medicaid and unemployment insurance.
An interesting part of the forecast report talks about the impact of the Tax Cut and Jobs Act. According to the forecast report, personal income tax collection estimates were down by .4%.
The report says this is likely because taxpayers made higher-than-normal estimated payments in the 2017 tax year and then turned around and reduced the amount of their final estimated payments in the 2018 tax year. In other words, taxpayers were expecting to pay less and did pay less.
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A.P. Dillon is the North Carolina Bureau Chief for The Tennesee Star and a reporter at Battleground State News. Follow A.P. Dillon on Twitter. Email Tips to [email protected].
Photo “Factory Worker” by Airman 1st Class Megan Floyd.