(The Center Square) – Three months ago the forecast was for nearly half-a-billion dollars in overcollections. Wednesday, North Carolina officials said it’s about $180 million lower at $364 million for the 2024-25 fiscal year.
That’s good and not as great, mixed with a model questioned on its historical accuracy.
Numbers were released by the Consensus Forecasting Group, a group of economists at the Office of State Budget and Management and the Fiscal Research Division of the General Assembly. Corporate income tax collections in April, the report says, are the primary driver in the lower expectations.
Recent tariff implementations from the Trump administration were cited in the report.
The forecasting group said it expected little impact from the federal income tax filing deadline shifting from April 15 to May 1 and eventually to Sept. 25.
With lower collections from sales, individual income and corporate income taxes, lower revenues are also forecast in the two-year budget cycle that begins July 1. Uncertainty in the economy is another factor influencing the reduced expectations.
Past forecasts in this model have often been off by hundreds of millions, even up to 6%. Negotiations are ongoing to set the state’s two-year budget, with the preferring the tax cutting plan getting the state income tax rate to 2.49% by 2027 and the House of Representatives staying at a flat 3.99% through 2027.
