The consensus revenue forecast released by the General Assembly today provides further evidence of both the enormous economic harm COVID-19 is inflicting on the state and some important long-term certainties about our economy. More than ever, it’s clear that how people are faring and what policy decisions are made to support their well-being will make a difference for the state’s economic recovery.
Economists with the Fiscal Research Division and Office of State Budget and Management are cautiously projecting revenue losses as deep as the Great Recession, but they also lift up many questions that remain about how this downturn and the recovery will play out. They also make clear that the numbers reflected in today’s forecast could change.
One thing we know for certain, however, is that our leaders in Washington and Raleigh can and should put policies in place today to support people and thereby, in turn, our economy.
Only through a bold policy agenda that rejects the status quo can our state hope to bend this latest curve upward so that we can secure an inclusive recovery and ensure all communities can thrive.
The hard truth is that weaknesses of our last economic expansion left our state less resilient in the face of this pandemic. Too many North Carolinians were already living paycheck to paycheck; too many didn’t have access to affordable health insurance; too many couldn’t afford safe housing or afford to put food on the table each night. Too many barriers to good jobs and the capital to start new businesses persisted for Black and brown North Carolinians.
Our leaders must go further to provide people with the supports to make it through this pandemic. A pro-growth agenda can’t ignore the drag of inequities and hardship any longer, but must first invest in every person’s well-being.
Even with the projected revenue losses, North Carolina leaders can make smart choices to quicken the recovery for more people.
Now is the time for our state leaders to call for additional federal aid to state and local governments that is sufficient and flexible to fill this revenue shortfall. Now is the time to look to smart, targeted revenue options at the state level that can undo tax cuts that have hampered our public response.
In this moment and for the future, North Carolina must have the foundation of public services and institutions in place to deliver well-being to all.
Alexandra Sirota is the Director of the N.C. Budget & Tax Center.