Forecast: Pandemic predicted to take $4B bite out of state revenue
Top state government fiscal researchers predicted Friday that North Carolina will collect $4 billion less in revenues over a two-year period than previously forecast as the pandemic-related economic slowdown continues.
Researchers from the General Assembly’s Fiscal Research Division and the executive branch Office of State Budget and Management jointly estimated that state collections for the current fiscal year will fall $1.6 billion short of a pre-pandemic forecast. And for the 2020-21 fiscal year, the group predicted that revenue will fall short of the previous forecast by nearly $2.6 billion.
The group did note that because the current pandemic is unprecedented, their forecast reflects more uncertainty than normal. They also noted that delays in state tax deadlines for individuals and businesses also clouded the picture.
“Public health measures undertaken in response to COVID-19 resulted in shuttered businesses and the temporary or permanent loss of hundreds of thousands of jobs,” the researchers wrote.
In a joint statement, Senate leader Phil Berger and House Speaker Tim Moore said they plan to “continue to work collaboratively with the Governor on fiscal responses to this crisis, just as we did earlier this month” when lawmakers approved a plan to distribute federal relief funds.
Berger said earlier this week that cash and other reserves in North Carolina’s coffers should help the state withstand the revenue drop-off this year and next. He also hopes the federal government will let lawmakers use some of the rest of the state’s share of federal relief funds — another $1.9 billion — to help fill additional gaps.
By Jonathan Drew, Associated Press North Carolina’s unemployment rate ballooned to a record 12% in April amid the coronavirus-related economic... read more