11.19.2009 Policy Points

Bleak Budget Outlook

The newest economic and revenue report prepared by the staff of the NC General Assembly suggests that joblessness and budget shortfalls will trouble North Carolina well into the foreseeable future.

Among the report’s disturbing findings are the following:

  • As of October, state tax collections are running $95 million (or 1.5 percent) below target. After adjusting for changes in the tax code, revenues are down four percent compared to the previous year.
  • Sales tax collections continue to plunge and are down 11.7 percent compared to the prior year.
  • Withholding tax collections also are declining but are moving in line with projections.
  • An employment rebound is essential to any long-term economic and revenue recovery; unfortunately, few signs point to such growth and “a robust expansionary recovery is still a year or two away.”
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