The North Carolina General Fund Revenue Report and Economic Outlook for April 2013 developed by the Fiscal Research Division of the General Assembly can be seen here. This report is an update provided by the General Assembly’s Fiscal Research Division that summarizes revenue for the current fiscal year and outlines the risks to revenue receipts for the current year.
The following is an excerpt from the report:
• General Fund revenue through three quarters of the fiscal year is $110 million above a $14.3 billion revenue target.
• The State’s economy has steadily been gaining strength. We anticipate the pace of economic growth to stay on a steady, upward trend.
• Federal sequestration policies may put the pace of growth at risk as the effects begin to take hold this summer.
• Unlike the last several years, an “April surprise” is more likely especially given the added volatility from the new $50k business exemption and taxpayers’ reactions to federal tax changes.
• The State’s employment picture reflects the improvements in the overall economy. Nonetheless, we do not anticipate job growth to be strong enough to significantly lower the unemployment rate until mid-2014.
• Since last year, the State added nearly 64,000 jobs. At the same time the labor force grew by 64,500 (seasonally adjusted). The combination of modest growth and a growing work force has kept the unemployment rate from falling.
General Fund Revenue Report & Economic Outlook
Summary provided by the News & Observer:
NC’s economic outlook improving but risks remain
RALEIGH — North Carolina’s revenue and tax collections so far this fiscal year show an improving state economy that is still struggling to build up considerable momentum.
Through the first three quarters of the fiscal year, North Carolina’s general fund revenues have exceeded the state’s $14.3 billion revenue target by $110 million, according to a new report by the state’s Fiscal Research Division. Tax revenues are $126 million ahead of a $13.5 billion target.
But sales tax collections have been below projections, with the state taking in $90 million less than the $4 billion targeted through the first three quarters of the fiscal year. Non-tax revenues, which includes investment income and judicial fees, are also $16.3 million less than the state’s $513 million target.
The report attributes the shortfall in sales tax collections to the late summer slowdown in the economy and the ending of the 2 percent federal payroll tax cut earlier this year. The state now expects sales taxes to grow by 3.1 percent during the 2012-13 fiscal year, well below the 6.3 percent growth reported during the 2011-12 fiscal year.