Raleigh, N.C. – The nonpartisan Fiscal Research Division of the North Carolina General Assembly said state tax collections are expected to remain on target in a second quarter revenue report released Monday for the 2017-2018 fiscal year.
“The economy is on solid footing and remains in a stable growth pattern,” wrote the division’s Chief Economist Barry Boardman. “Collections are expected to remain on target throughout the fiscal year.”
Second quarter revenue was $7.9 million above target and the state is essentially on track to reach the fiscal year’s $23.1 billion revenue target with a modest $43 million shortfall through half of the fiscal year.
“Employment continues to grow at a steady pace and should spur additional overall wage growth, “ Boardman wrote of North Carolina’s economic outlook. “The state’s growth is starting to outpace average national growth.”
Personal income and corporate tax collections were slightly below target, while franchise tax collections exceeded expectations by $34 million.
“Long-run baseline growth was 5.0% this past quarter, which was well ahead of the post-recession average of 4.2%,” Boardman wrote of sales and use tax collections.
The growth in quarterly collections was ahead of what North Carolina has on average experienced in post-recessionary periods, according to the report.
“The economy is stronger than it was a year ago and is beginning to look like an economy that has entered into a true expansionary phase,” Boardman wrote.
The North Carolina General Assembly enacted historic tax relief this decade to save state taxpayers billions of dollars, encourage economic growth and spur job creation.
Since 2011 the General Assembly has levied a lower sales tax rate, personal income tax rate and corporate tax rate on North Carolina families and businesses, while raising the standard deduction for low-income earners.
North Carolina House Speaker Tim Moore (R-Cleveland) said the report was good news for taxpayers:
“Citizens can feel confident in the General Assembly’s successful approach to putting money back in their pockets,” Moore said.
“Now more than ever, it’s critical North Carolina continue putting families and businesses first with policies that encourage robust economic growth and a solid financial foundation for our state.”