We learned some great news last week from the economic prognosticators at the legislature and the state budget office. According to their projections, the fiscal experts think that state revenue will be $4.24 billion more that first estimated for the fiscal year ending June 30. That’s almost a 15% increase over what was first expected last June.
Back in February, the Office of State Budget and Management predicted there would be a surplus. But the $4.2 billion number far surpasses what was even imagined. And for the next fiscal year, the estimate is for another surplus – another almost 2 billion dollars.
Where does it come from? Estimates for how the state would come out of the COVID pandemic were cautious and didn’t expect our economy to be in as good a shape as it is now.
Apparently the economic indicators are in good shape – post pandemic job growth is positive, and stock market gains and healthy corporate profits in 2021 were a big surprise.
The report from the Fiscal Research division at the NC General Assembly said that the good news was driven “primarily by individual income tax collections.”
They reported that other positive factors contributed to the good robust fiscal report, including: “Sales and use tax collections are estimated to finish well ahead of forecast due to strong consumer spending and inflation. Corporate income tax collections also contributed to the revision because of stronger than expected corporate profits.
This good news – that the state has around $6 billion in surplus funds to work with – is a great story coming out of the two-year long period of COVID misery – which devastated families and hurt so many NC businesses.
Now the question arises as the Legislature returns to Raleigh this week. What do they do with this huge surplus? As an Associated Press article described it, they have several choices.
“These additional revenues could lead to additional tax cuts; higher salaries; greater spending on one-time projects or permanent programs; flusher reserves for fiscal emergencies beyond what’s required; or a combination of any or all of them.”
The Reform Majority which we often refer to that has been in legislative leadership for more than 10 years has done a great job at establishing a culture and tradition of fiscal responsibility.
They’ve built the “Rainy Day” savings fund to have money when the bad times come. They have kept a steady hand on state spending. And when times have come with budget surpluses, they have given part of that money back to taxpayers in the form of tax cuts – because after all – it’s the taxpayers’ money to start with.
And there have been articles and comments about this new $6 billion budget surplus opportunity. But few have mentioned what the Reform Majority has gone through to develop the process by which surpluses are made possible.
We take for granted what we could be facing. We’re seeing it in Washington with irresponsible fiscal management run amok. Liberals spending like it’s going out of style. The dumping of money into the economy with stimulus money creating a financial imbalance that’s stoked inflation fires to record high levels.
Whenever there’s an extra tax dollar made available in a budget surplus – the big-spending liberals find a way to spend it on their pet projects. We hear it constantly from the Governor. Since the Reform Majority has been in charge, the Reform Majority have taken the heat for years from Rev. William Barbour’s protest crowds, the left-leaning Budget and Tax Center, the increasingly liberal WRAL and seemingly every one of the growing alphabet soup of liberal groups mushrooming more every year in North Carolina.
They’ve been ridiculed and had their constitutional power challenged by the liberal-controlled state Supreme Court because they would not budge off of the steady, sound conservative course they’ve adopted in protecting our state’s finances.
Our hat is off to the disciplined, determined group of legislators who act like adults in saying NO to irresponsible big spending. Who have found a way to fund important elements of state government like our schools, roads and the basic infrastructure we need to take care of our families and keep commerce moving and our economy strong. Without raising taxes.
In a release that followed the fiscal report announcing the budget surplus, Reform Majority leaders Senate Leader Phil Berger and House Speaker Tim Moore said the economic forecast’s good news “highlights the General Assembly’s winning formula of low taxes, reasonable regulations and responsible spending.”
Here’s a hearty “Thank you” to our legislative leadership and an encouraging adage to “Stay the Course” in wise financial management of the state’s coffers as you make critical decisions on what to do with this new money.