Tax collections should boost state's spending account
Posted April 20, 2009
Raleigh, N.C. — North Carolina tax collections are expected to fill a $1.3 billion hole in the state's checking account, but state officials said Monday they do not know how long the state might stay out of the red.
"I do believe we'll be in the positive by the end of this week," State Controller David McCoy said. "Whether it's $100 million or $500 million, that's all yet to be seen as the Department of Revenue processes those payments."
Tax revenue will help state pay bills
Lower-than-projected revenue has forced all state departments to cut budgets by at least 9 percent this year and has meant the state has had to dip into its reserve accounts to keep operations running.
Despite an estimated $2 billion that McCoy expects to come in to the state's general operating fund by the end of the week, the figure is still $1.1 billion less – an 8.5 percent decline – than last year.
McCoy said the state still faces uncertainty and challenges for May and June, which are typically slower revenue periods.
"(If we don't get the necessary revenues,) we will have to take other steps, including reductions from other agencies," McCoy said. "We have to have a balanced budget at the end of the year."
The influx of revenue, however, means good news for taxpayers like Scott McKaig, whose tax refund has been delayed because of the state's money problems.
McKaig is waiting for a $7,500 tax credit for buying a house. "Hopefully, it'll come soon, he said."Bills need to get paid."
McCoy said getting those processed refunds out is a goal for the state, which has been slow in issuing tax refunds to help ease the cash crunch.
It has until May 31 to issue checks on processed returns, otherwise it must begin paying interest on those not mailed.
"(We want to) get those refunds in the hands of the taxpayers as quickly as we can and get that obligation off our books and move forward," McCoy said.