August 31, 2001

Economic Trends

Compared to last year, state’s revenue picture is brightening some

The state doesn’t have an official budget yet for the fiscal year that began July 1 but it does know how much it collected in taxes during the month, and the news is mostly positive. Strong individual income tax collections during the month pushed overall tax receipts $57 million above the same month last fiscal year, according to a preliminary (but usually very accurate) report by the State Controller’s Office.

As the chart at right indicates, individual income tax collections during July were about $65 million above those in the prior year month, enough to more than make up for continuing weakness in other revenue line items.

Bottom line, total tax and nontax revenues for the month of about $1.2 billion were nearly $48 million more than the state collected in July 2000, or a revenue gain of about 4.3 percent.

Meanwhile, the Controller’s Office issued a complete financial report on the month of June, the final month of the 2000-01 fiscal year, which shows that state revenues grew an anemic 2.4 percent compared to fiscal 1999-00. Revenue for the year ended June 30 were $13.452 billion, a gain of $317 million in tax collections over the prior fiscal year.

Excluding nontax revenues (investment income, judicial fees and the like), revenue growth last fiscal year was a mere 1.5 percent – up $182.1 million over the $12.391 billion total for fiscal 1999-00.
 

Georgia energy company to build power plant in Gastonia
Mirant, a Georgia-based company that develops a variety of energy projects, will develop a 1,200-megawatt, natural gas-fired power plant in Gastonia, generating $500 million in investment and creating 35 permanent jobs and as many as 300 temporary construction-related jobs.

"This investment, in an area that has suffered more than its fair share of hardships, will promote future economic growth," Gov. Mike Easley said Monday in making the announcement. "We have to work hard to replace the textile jobs that we have lost in Gaston County and across the state." "This is good news for Gaston County and for North Carolina," said Sen. David Hoyle (D-Gaston). "I am delighted to have Mirant join the state as a corporate citizen."

Construction on the facility is scheduled to begin in early 2002, creating up to 300 construction jobs on the project. Commercial operation is expected to begin in summer 2004. The plant jobs created will be high-skill, full-time jobs.

"North Carolina's energy needs continue to grow, and this site was specifically chosen because of its location in the rapidly developing Gastonia-Charlotte region and the I-85 corridor," said David Rozier, chief executive officer of Mirant's southern U.S. operations.

Mirant is headquartered in Atlanta, with 10,000 employees worldwide. The company is working closely with the N.C. Department of Commerce and the Gaston County Economic Development Commission to select the power plant site.
 

State launches effort to collect $150 million in back taxes
Gov. Mike Easley recently launched a new effort by the Department of Revenue to collect $150 million in back taxes during the next two years. In a ceremony held at the State Capitol, Gov. Easley signed into law S. 353 Project Collect Tax -- an initiative that will focus on collecting overdue individual and corporate taxes.

Through Project Collect Tax, the Department of Revenue will begin to collect money owed from delinquent taxpayers who have ignored requests for payment and repeated efforts by the department to reach a reasonable agreement. The new law allows the department to charge delinquent taxpayers an additional fee that will help cover the costs of collecting these taxes.

Starting Aug. 22, the Department began sends notices to every taxpayer who has an account with the department that is at least 90 days past due. The department estimates there are at least 490,000 such accounts and expects to collect $150 million in back taxes over the next two years.

"Ninety percent of our citizens and businesses pay their taxes on time and according to the law," said Revenue Secretary Norris Tolson. "The other 10 percent are forcing us to use honest taxpayers' money to subsidize them. That day is over."

After receiving a notice from the state Department of Revenue, taxpayers will have 30 days to contact the department and settle their accounts. After those 30 days, the department will begin its full-scale effort to collect any funds that have not been paid and a 20 percent collection fee will be imposed. Under Project Collect Tax, taxpayers who already have payment plans with the Department of Revenue to settle tax debts will not have to pay the collection fee.

"We intend to be fair, honest, and straightforward in all our dealings with taxpayers -- just as we always have been," said Tolson. "However we cannot allow the number of unpaid tax accounts to continue to grow. It is not fair to honest taxpayers and it is a disservice to future generations of North Carolinians."

Return to Page One