Recently the Fiscal Research Division of the General Assembly provided a report on the State’s revenue collections and budget outlook. Through February, the State has experienced a $45 million revenue shortfall which is projected to increase through the end of the fiscal year. While the downward trend of sales and income tax collections has leveled out, the report predicts the economic recovery will be slow resulting weak revenue collections extending through the 2010-11 fiscal year. The current shortfall was reduced by the Department of Revenue’s initiative to resolve longstanding tax disputes with more than 200 taxpayers producing $422 million in tax collections.

Recently the Fiscal Research Division of the General Assembly provided a report on the State’s revenue collections and budget outlook. Through February, the State has experienced a $45 million revenue shortfall which is projected to increase through the end of the fiscal year. While the downward trend of sales and income tax collections has leveled out, the report predicts the economic recovery will be slow resulting weak revenue collections extending through the 2010-11 fiscal year. The current shortfall was reduced by the Department of Revenue’s initiative to resolve longstanding tax disputes with more than 200 taxpayers producing $422 million in tax collections.

Although the current shortfall is small, revenue collections during the final quarter of 2009-2010 will determine whether further cuts or tax increases are necessary. If the economy continues to recover slowly, projections for fiscal year 2010-2011 will need to be revised downward. In early April, the NC Senate is scheduled to begin Appropriations meetings with a full legislative fiscal briefing to occur in early May.