The second Quarterly General Fund Revenue Report from the Fiscal Research Division of the NC General Assembly reveals some underlying and troubling trends in the economy. It also foreshadows some of the particular challenges of the new tax plan—namely the tax rate reductions for profitable corporations.
On net, the General Fund was $83.5 million above the $10.02 billion revenue target for the first-half of the current fiscal year that ends in June. Revenue collections were ahead of target largely due to a “stronger-than-expected” performance by the corporate income tax. As the economy has slowly improved, corporate profits have been on an upward trend. Collections from the corporate income tax were ahead of target by nearly $90 million.
The new tax plan, however, diminishes the ability of corporate income tax collections to contribute to public investments and support revenue recovery after a downturn in the future. Read More