North Carolina has posted a revenue surplus of $188 million, according to a new state economic report, making it the sixth such surplus in a row.
The report, produced by the North Carolina Fiscal Research Division, says that “the economy is stronger now than it was a year ago,” and that the data suggests the state’s economy “is growing at a steady, solid pace.”
“Our state’s excellent economic reports reflect a rising quality of life for families and businesses in North Carolina as a result of our commitments to their priorities,” North Carolina Speaker of the House Tim Moore said in a press statement.
“The General Assembly must maintain our proven economic approach to creating opportunity and prosperity for millions of North Carolinians,” Moore said.
According to the economic report, the “collections from corporate taxpayers are a big reason why overall collections are 1.9 percent ahead of target.”
Corporate income and franchise taxes together are “$82.9 million above the 6-month target.” The report also stated that corporate income tax collections are up 16.5 percent from last year.
The report takes the wind out of the tax rhetoric that has come from Democratic Gov. Roy Cooper, who within days of first taking office proposed a tax hike.
Cooper has repeatedly demonized the tax reforms as giving “tax breaks to the wealthy.” In 2018, he used the same rhetoric to slam the legislature’s budget.
“This budget has the wrong priorities and is irresponsible. It values tax breaks for corporations and the wealthy at the expense of public education not only this year, but for years to come.” – Gov. Cooper.
— Governor Roy Cooper (@NC_Governor) June 6, 2018
Cooper’s own 2018 budget was analyzed and found that it would create a $500 million structural state budget deficit. Later that year, Cooper’s fiscal policies and his proposed 2018 budget were given an “F” by the CATO Institute.
“On taxes, Cooper has tried to block efforts by the legislature to make pro-growth reforms,” the Cato Fiscal Report card says.
Since taking control of the General Assembly in 2011, Republicans have enacted historic tax reforms.
Before the Republican tax reforms were put into place, North Carolina had a two-bracket individual income tax with rates of 6.0 and 7.75 percent, and the highest corporate income tax rate in the South at 6.9 percent.
Juxtapose the pre-reform rates with 2019’s most recent cuts that bring the personal rate down from 3 percent to 2.5 percent and the corporate rate from 5.499 percent to 5.25%.
The state’s income tax standard deduction has also nearly tripled since 2011.
To give the latest budget surplus some context, if one looks back to the state of North Carolina when Republicans took control of the legislature.
North Carolina had the fifth highest unemployment rates in the country, owed $2.8 billion to the federal government, and overspent $500 million on Medicaid.
In 2016, the North Carolina Tax Climate ranking had jumped from 44th to 11th due to the reforms made by the Republican-led legislature.
At the beginning of 2017, the state had a $500 million dollar surplus and had added over 300,000 jobs.
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A.P. Dillon is a reporter at Battleground State News. Follow A.P. Dillon on Twitter. Email Tips to [email protected].
Photo “Tim Moore” by North Carolina General Assembly. Background Photo “North Carolina Capital” by Chanilim714. CC BY-SA 3.0.
