State revenue forecast coming out this week, will guide NC budget plans
AI-generated summary reviewed by our newsroom.
- Consensus revenue forecast will guide lawmakers' budget and tax-cut talks.
- April forecast revision will show if revenue triggers for a 2027 cut are met.
- House discusses property tax amendment; Stein wants local governments held harmless.
Good morning to you and welcome to our Under the Dome newsletter that focuses on the governor. I’m Capitol bureau chief Dawn Vaughan.
There are two major unknowns for Democratic Gov. Josh Stein with a month to go before the General Assembly begins a new session:
Will lawmakers send him a new, comprehensive state budget?
And what about the intra-Republican battle over tax cuts?
One thing we’ll know for sure this week is a contributing factor to both issues: the consensus revenue forecast.
That’s the annual report from the governor’s Office of State Budget and Management and the legislature’s Fiscal Research Division about what we can expect for state revenue. In other words, how much of our tax money the state will collect and then spend.
A few weeks after tax day on April 15, the forecast will be revised with numbers adjusted after tax collections.
The revenue forecast will guide how top lawmakers — Senate leader Phil Berger and House Speaker Destin Hall — finally negotiate a deal over tax cuts, if they reach one. We’ll also know if tax cut revenue triggers already in place are met, which means the individual income tax rate could be reduced again in 2027.
Berger and Hall could also just tell budget writers to start from scratch on a new budget, using the revenue forecast to guide decisions.
Stein warned of the impending “fiscal cliff” after the 2025 revenue forecast.
In 2022, the revenue forecast was sunny, but inflation clouded the horizon.
In 2019, top Republicans proposed that the state take $680 million of a budget surplus and give it back to taxpayers, but that bill never passed.
Property tax reform on legislative agenda
In other tax and revenue news, the House continues to talk about how to reform property tax laws, with the latest a proposal for a constitutional amendment.
Stein has said that he’s “certainly open to that conversation” about changing property tax law, but that “anything that the state does should hold local governments harmless.”
You can read more in my story about the amendment and exemption proposals, as well as what Berger is saying about the prospect of property tax legisation in the spring session:
Thanks for reading. Be sure to listen to our Under the Dome podcast, with a new episode out on Tuesdays.
Reach me at dvaughan@newsobserver.com or the entire politics team at dome@newsobserver.com.
