State tax collections ended the fiscal year June 30 more than $445 million above the state’s original budget projection, according to a memo from the General Assembly’s Fiscal Research Division to legislators. The news doesn’t come as a surprise, as legislative staff and legislators have said for a couple of months that they expected the fiscal year to end with a surplus of about $400 million.
Rep. Nelson Dollar, a Wake County Republican and top House budget writer, said Monday the additional $45 million is “a few extra dollars to work with, which is always helpful.” The state still doesn’t have a budget for the 2015-17 biennium, as legislators are working behind the scenes on a compromise plan between the House and Senate.
Also as expected, the revenue numbers mean the state’s corporate income tax rate automatically will decrease from 5 percent to 4 percent in 2016 because of a trigger put into law as part of 2013 tax code changes. That legislation trimmed the corporate income tax rate from 6.9 percent to 6 percent in 2014 and to 5 percent in 2015. The trigger to further reduce the corporate tax to 4 percent was $20.2 billion.
According to the memo, the state’s general fund collected more than $21.4 billion in fiscal year 2014-15, $445 million more than the $21 billion revenue target and more than $230 million above the corporate tax trigger.
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The surplus marks a sharp contrast from midway through the fiscal year, when budget officials reported a $200 million shortfall between budgeted revenues and collections. But they cautioned all along that the state revenue picture wouldn’t come clear until after tax season.
The 2013 tax legislation also called for an additional corporate tax rate cut to 3 percent at the start of 2017 if revenue is just shy of $21 billion by mid-2016.
Ads hit Burr on environment
A pair of TV ads aimed at U.S. Sen. Richard Burr, R-NC, for his opposition to the federal Environmental Protection Agency’s forthcoming plan to reduce carbon emissions from power plants was launched on Monday by a national group.
The League of Conservation Voters says it is spending about $100,000 on two TV ads airing on satellite across North Carolina. The ads urge viewers to tell Burr to vote against any bill that would stop or delay the EPA plan. Burr has said the new regulations would cost jobs and disposable household income.
The EPA rules, expected in August, will require states to develop plans to reach goals to reduce carbon emissions or else the federal agency will write them for them.
A bill in the state House would have established a stakeholder group to write the state plan. But a Senate committee rewrote that bill last week to stop the state from preparing any plan until legal challenges are resolved.
Patrick Gannon of The Insider and staff writer Craig Jarvis
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