Gov. Roy Cooper’s budget director issued false shortfall prediction in June 2017 that was wrong by over $1 billion
Raleigh, N.C. – The chief economist of the North Carolina General Assembly’s Fiscal Research Division advised state lawmakers of “extraordinary growth” in tax payments on Monday indicating an estimated revenue surplus of more than $700 million.
The optimistic collections forecast stands in stark contrast to the predictions of Gov. Roy Cooper’s budget team, which warned a $600 million revenue shortfall would result two years after the Republican-led legislature overrode Cooper’s veto of the 2017 state budget.
“Preliminary results from April tax collections indicate extraordinary growth in year-over-year final tax payment,” wrote Chief Economist Barry Boardman of North Carolina’s Fiscal Research to state lawmakers and staff on Monday.
“April collections did generate a true ‘surprise’ this year. Final payments on the Individual Income tax came in at $395 million above projection and 46% over what we collected in April of last year.”
Boardman cited “the largest year-over-year increase in payments since 2005” and noted “corporate income tax payments in April were up 42% over last year and exceeded April’s projection by $75 million.”
The update on the state’s tax collections does not reflect a final consensus revenue forecast, Boardman told lawmakers, and an official report has been delayed until May 14, 2019 because analysts “need additional time to reach a consensus forecast.”
“Altogether, this means April collections will be well-above the monthly target and could push over-collections for the current fiscal year to over $700 M (sic),” Boardman wrote.
The positive economic forecast stands in stark contrast to the predictions of Gov. Roy Cooper’s budget team, which warned a $600 million revenue shortfall would result two years after the Republican-led legislature overrode Cooper’s veto of the 2017 state budget.
“The tax structure as enacted in this budget will, in just two years, leave North Carolina unable to meet the same level of service as is delivered to citizens today,” wrote Gov. Roy Cooper’s budget director in June 2017.
“Conservatively, we anticipate this budget would blow a $600 million hole just to meet current service levels.”
Based on the preliminary forecasts provided by the Fiscal Research Division, Gov. Roy Cooper’s budget director’s shortfall prediction was wrong by more than $1 billion.