- Discontinuing the higher personal income tax surcharge and the tax surcharge on profitable corporations put $200 million per year into the pockets of the wealthiest North Carolinians and largest corporations, but did not benefit North Carolina families – working or not – of more modest means.
- Legislative leaders gave away more than $467 million over the biennium to businesses in the form of a $50,000 business tax exemption. This exemption does not come with any requirements, such as job creation, and as a result is highly unlikely to make a dent in North Carolina’s persistently high unemployment rate.
By undermining revenue availability in these ways, North Carolina policymakers put the state budget in a precarious fiscal position while taking no action to improve the revenue system’s equity or adequacy to support a stronger state for all.So while you may have heard about a revenue “surplus”, don’t believe it. It’s still far too early to declare a state revenue surplus (which is revenue collections over projections at the close of the fiscal year, in June) and even more unrealistic to assume that some economic improvement short of major gains in statewide employment will be enough to mend this unbalanced budget. Revenue collections ahead of target are not the same as a revenue surplus. Even if it was, the $140 million ahead of target at current time isn’t even enough to meet current-year obligations, let alone increase availability for next year’s budget.