Local Politics

Tax collections should boost state's spending account

Posted April 20, 2009

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— 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 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.

13 Comments

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  • Titus Pullo Apr 21, 2009

    If you get a refund, I want to thank you for making that interest free loan to the government.

  • Weaker Pelosi Apr 21, 2009

    There will be rubber checks bouncing around downtown.

  • irishale Apr 21, 2009

    9% cut, huh? I took one that size last year due to job elimination, and I worked it out. Now, I'm facing a closing at my new job... so, call that a 100% income reduction.

    WE have to make do, so can the government. I believe it would serve the state well not to count on the tax payments coming in. There's a very good chance that a lot of people CAN'T make their tax payments... so then what?

  • Garnerwolf1 Apr 21, 2009

    The April revenue they think will save them will be way down. The economic crisis is just now hitting NC state govt - tax revenues always trail economic downturns and upturns - which means when the rest of the economy is improving, the state (and locals) will still be struggling. Buckle your chinstraps, it's about to get ugly, ie layoffs and tax increases. Of course, since the politicans are afraid to actually cut anything, as opposed to just slicing off tiny slivers, spending hasn't been reduced like it should have been .

  • FoxtrotUniformCharlieKiloakaCALM Apr 21, 2009

    the 7500 tax credit or the 8000 tax credit (for 2009) is federal not state, why is that even quoted in this article?

  • willsmithfield Apr 21, 2009

    So, i work for the state and we just had a meeting where they told us our whole dept. might be shut down! I will admit that we are about the most inefficient bunch you have ever seen, but come on now.

  • Nancy Apr 21, 2009

    From the article: "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."

    Gee, see how that works? You have to PAY to play. So if they want to hold out it will cost them. And they don't like that.

    Something tells me if they could change THAT law (pay interest if refunds are not forthcoming by the end of May) they will.

    This also tells me that they count on monies before they receive them and spend accordingly.

    Irresponsibility is a hallmark of government.

  • Garnerwolf1 Apr 21, 2009

    Don't think the state gives $7500 home buying credits...

  • 3779LRRP Apr 20, 2009

    Mondo, go green if you want with your refund. I'm going to spend mine the way I choose. Not the way recommended by the present administration. Might just blow it on trivial stuff. It's my money.

  • mondo Apr 20, 2009

    whenever my refund arrives I will promtly place it into the purchase of green technology for my home.

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