Revenue collection a growing concern

Published December 17, 2014

Editorial by Rocky Mount Telegram, December 16, 2014.

There are two measures by which to judge tax reform. The first is to count the money we have left in our pockets at the end of the day. The second is to count the money the state has in its piggybank after it has finished collection.

At the state level, the second measure is coming up a bit lean. Revenue collection was $62 million short of projections at the end of the first quarter of the fiscal year that began July 1. Five months into the fiscal year, the shortfall has grown to $190 million.

Budget analysts say it’s too early to say how much the revenue gap is likely to be by July 1, 2015, when the new fiscal year begins. And sales taxes will no doubt get a boost following the end of the Christmas shopping season.

The deficit at this point comes nowhere close to some of the billion-dollar shortfalls faced by previous legislatures, but no one really knows what the new year will bring. North Carolina’s new income tax plan may result in smaller refund checks next year, which would be a boost to the state.

But considering all of the belt-tightening undertaken earlier this year by the N.C. General Assembly, we hope the legislature will choose not to make drastic cuts to state spending. North Carolina already faces big challenges to maintain public schools, roads, Medicaid, medical examiners and other infrastructure.

If the tax plan needs tweaking, tweak it. But the state has to meet its obligations to the people it serves.