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Projected budget deficit shrinks with March report
 For the first time in several months, officials have reason to
believe that the worst is over in the state’s budget crisis.
With release of the March revenue report, which takes the
state through the end of its fiscal third quarter, officials
say they see some light at the end of the tunnel.
On a straight accounting basis, state tax collections through
the end of the third quarter are running $524.4 million under
budget (see chart below). However, officials believe that the
shortfall is overstated somewhat by a surge in state income
tax refunds delivered early to individuals taking advantage of
electronic filing. Taking those early filers into account,
officials believe that the actual budget shortfall is $394
million. That figure is well within the spending cuts and
other cost-saving measures the state already has put in place.
The budget numbers and other factors prompted Gov. Mike Easley
to release $40 million in Hurricane Floyd relief funds he
impounded in February as part of a package of $1 billion in
spending cuts and frozen funds to cover the projected budget
shortfall.
Lower that projected individual income tax collections
continues to be the main problem for the state budget. When
legislators wrote the current budget last year, they
anticipated the state would rake in $351.4 million in
individual income taxes in March – the month when most
families file their state tax returns. However, only $270.6
million was realized in the month. Through nine months,
individual income taxes are $342 million under budget.
However, comparing actual tax collections through three
quarters of this fiscal year to collections in the same
year-ago period shows that the state’s economy is holding
its own. At this point in the 1999-00 year, the state had
collected $9,474.8 million; this year’s third-quarter total
is $9,476.9, a positive difference of $2.1 million.
See more details in the chart below:
March
Revenue Report
dollars in millions |
Projected
Monthly
Budget |
Actual
Monthly
Collections |
Y-T-D
Monthly
Budget |
Actual
Y-T-D
Collected |
Percent
Realized
v. Budget |
| Individual
income |
$351.40 |
$270.60 |
$5,303.20 |
$4,968.80 |
93.70% |
| Corporate
income |
161.6 |
143.9 |
433.1 |
322.3 |
74.40% |
| Sales
and use |
255.3 |
234.6 |
2,668.50 |
2,570.70 |
96.3 |
| Franchise |
96.2 |
123.8 |
440.2 |
503.7 |
114.40% |
| Insurance |
43.8 |
41.4 |
144.6 |
139.4 |
96.40% |
| Beverage |
13.9 |
14.2 |
128.7 |
127.8 |
99.30% |
| Inheritance |
12.7 |
13.6 |
114.6 |
93 |
81.20% |
| Privilege
license |
1.2 |
0.9 |
29.8 |
8.8 |
29.50% |
| Tobacco
products |
3.5 |
3.2 |
31.9 |
31.4 |
98.40% |
| Real
estate conveyance |
- |
- |
8.2 |
8.2 |
100% |
| Other |
–3.0 |
–0.6 |
33.9 |
37.9 |
117.20% |
| Total
Tax Revenue |
$936.60 |
$847.20 |
$9,336.70 |
$8,812.30 |
94.40% |
| Non-tax
revenue |
40.2 |
43.9 |
699.7 |
664.6 |
95.00% |
| Total
Revenue |
$976.80 |
$891.10 |
$10,036.40 |
$9,476.90 |
94.40% |
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