Local Politics

State budget picture brightens a bit

Posted April 12, 2010

State budget
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— The state budget won't be in such bad shape in the coming year, after all, a fiscal analyst told lawmakers Monday.

The latest projections call for a budget deficit of $787.9 million for the 2010-11 fiscal year, which begins in July, Barry Boardman, an analyst in the nonpartisan Fiscal Research Division of the General Assembly, wrote in a memo to the heads of the House and Senate budget and appropriations committees.

State officials previously estimated a deficit of $700 million to $1.2 billion for the upcoming year, on the heels of the record $4.5 billion shortfall last year.

Because personal income tax and sales tax collections remain below forecasts, Boardman said, the revenue shortfall will likely be $702.9 million in 2010-11. The remaining $85 million of the projected deficit is tied to the expiration of the federal estate tax in January.

The federal government will reinstate the estate tax next January, but because it isn't applied in 2010, North Carolina will not collect a state estate tax.

In addition to balancing the 2010-11 budget, lawmakers must trim $391 million from the budget for the 2009-10 fiscal year, which ends in June. That deficit is about 2 percent of the $18.9 billion state budget.

Previously, the 2009-10 deficit was projected at $500 million.

Gov. Beverly Perdue last August ordered up to 5 percent of state agency budgets held back in anticipation of a continued weak economy. That money has been kept in a reserve account and should cover most of the 2009-10 shortfall, officials said.

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  • affirmativediversity Apr 13, 2010

    Tax Refunds ARE sup ..... con't

    Tax Refunds are suppose to be reimbursements of excess withholdings from the previous year...thus they are called REFUNDS. When the State has to rely on the next years revenues in order to REPAY last years REFUNDS then they are, literally, robbing Peter to pay Paul.

  • affirmativediversity Apr 13, 2010

    Your brats do not get taught, trash does not get picked up, roads do not get repaired, parks and rivers cleaned up if you do not have some sort of taxation for these services. per balog

    --------------

    My "brats" as you so eloquently put it don't attend public school...I pay for a private trash service...I have a pothole on the road the size of a small swimming pool not far from my house and have been told it will not be repaired this year...last time I checked rivers have a ready source of water for self cleaning purposes and parks have no cleaning crews (people who use them are expected to clean up after themselves).

    So far, you're batting average on government services I'd be whining about isn't very good.

  • affirmativediversity Apr 13, 2010

    Apparently, you have no understanding of how the state system works.Second,there is no debt except for operating expenses. The problem is, when business and industry created a lack of jobs etc many people ended up with no income to pay those taxes. Your tax refunds are not from your overpayments in withholding.Refunds are paid out within revenues ( amount owed) received in per ratherbnnc

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    I feel bad...its almost become a hobby of mine to expose you for the uninformed fool that you are.

    First, North Carolina does have debt. They regularly issue bonds (which are big loans for the uninformed amoungst us)...

    http://www.rbh.com/practice_areas.asp?id=20

    Next, its difficult for business to "create" a lack of anything...but be that as it may...business will never "create" in so unstable a fiscal environment...and having to wonder what new tax scheme the Local, State and Federal Democrats are going to come up with today is a little unsettling.

    Tax Refunds ARE sup

  • ratherbnnc Apr 13, 2010

    First of all the State has no money, what is has is billions of debt so there is no cushion. Secondly many people overpaid their State taxes, so they are in fact waiting to get back their own money not money from some other persons pocket. Perhaps in the future what the State should do, is pay the people first that overpaid. Next they can pay the beggar class that get back more than they paid in because of the various beggar class tax credits.
    whatelseisnew

    Apparently, you have no understanding of how the state system works.Second,there is no debt except for operating expenses. The problem is, when business and industry created a lack of jobs etc many people ended up with no income to pay those taxes.
    Your tax refunds are not from your overpayments in withholding.Refunds are paid out within revenues ( amount owed) received in.

  • scientistjo Apr 13, 2010

    whatusay, you ask "where are the jobs" and then say "cut gov't in half". The governement doesn't make private sector jobs! And the past decade has been spent cutting taxes for private companies. But the recession happened anyway! If a governor or president could wave a magic wand a create jobs, they would because they want your vote. So obviously they can't do that or it would have been done.

  • balog Apr 13, 2010

    "Where are the jobs? Perdue can't depend on increasing taxes and dreaming up new things to tax forever. Cut government in half and deport the illegals and there will be plenty of money. But, I forgot we have a democrat majority of lawmakers, including our governor. No hope."

    It is posts like these at highlight just how clueless most people really are about state (or any) government. This is the same type of person who would pee and whine about "why arent the roads being cleanred of snow fats enough" yet wants to slash spending by half. Take away half of the states jobs, that would put a HUGE dent in revenue collection. State workers pay taxes too. Your brats do not get taught, trash does not get picked up, roads do not get repaired, parks and rivers cleaned up if you do not have some sort of taxation for these services.

    People need to stop and think before they go for this hatchet of spending. Think - right, that would be asking waaay to much.

  • whatelseisnew Apr 13, 2010

    "Its a good thing since that deficit money is already in reserve due to cuts last budget year. That gives the state a cushion. And quit whining about your tax refund. This has nothing to do with that. Blame those people who havent paid their income taxes yet.Your money comes from them!"

    First of all the State has no money, what is has is billions of debt so there is no cushion. Secondly many people overpaid their State taxes, so they are in fact waiting to get back their own money not money from some other persons pocket. Perhaps in the future what the State should do, is pay the people first that overpaid. Next they can pay the beggar class that get back more than they paid in because of the various beggar class tax credits.

  • Garnerwolf1 Apr 13, 2010

    "I mis-calculated last year on my withholdings, I have corrected it for 2010 so Beverly will not be able to have any of my money and then tell me they do not know when I will get it back." What?! If you adjusted your withholding as you say you did, so Bev would not have your money, why are you waiting on a refund. Do you understand the concept of tax due - withholding = refund or amount owed?

  • Luv2Camp Apr 12, 2010

    Does the state have an underfunded pension obligation? If so, you had better re-check these nos. Most states are GROSSLY underfunded in their pension obligations. If NC is underfunded, I cannot help but wonder if taxes will rise, pensions will be cut, or some combination will occur and when. Folks, this is a massive issue that will hit the US soon and MAY hit NC as well. Batton down the hatches!

  • Daisygirlforever Apr 12, 2010

    Does that mean we actually might get our state tax refund after all?

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