| for
members only |
may
2002 |
 |
State Budget Update
No
‘April surprise’ to dilute red ink
in final months of this year’s state budget
As
work gets under way on closing the gap in the state budget for
the coming fiscal year, officials are taking steps to make
sure income matches outgo in the final months of the current
year. There was more bad news on that front when analysts
informed legislators that the state probably won’t have a
windfall from greater-than-expected individual income taxes
– the so-called “April surprise” that has flooded the
General Fund in years past.
That means the revenue shortfall for the year ending June 30
likely will be on the high end of previous estimates that put
the gap at between $950 million and $1.2 billion. At the close
of the state’s fiscal third quarter, the budget shortfall
stood at nearly $600 million, with three weak months to come,
according to reports by the General Assembly’s Fiscal
Research Division.
Back in the booming 1990s, April usually brought the state an
unexpected bounty of revenues from capital gains taxes and
soaring individual income taxes. However, tax returns for the
recession-plagued 2001 year show April is a bust this time.
Some analysts even said the state might end up collecting less
in taxes this year than last, something that hasn’t happened
in decades.
Total tax revenues for March were $935.7 million, about $124
million less than projected. Through three quarters, the state
has collected total tax and non-tax revenues of $9.65 billion,
about $172 million more than in the comparable period last
fiscal year. That’s a 1.8 percent growth in revenues, but
this year’s budget assumed a 4 percent revenue growth (see
chart below).
Gov. Mike Easley continues to insist that he already has cut
enough spending and seized enough money from various accounts,
including $209 million in reimbursements to local governments,
to cover a $1.2 billion shortfall.
|
Status
of General Fund in March, compared to March 2001
|
Current
Month
|
Year
to Date
|
Authorized
Budget
|
Percent
of Budget
Realized/Expended
Year to Date
|
|
‘01-‘02
|
‘00-‘01
|
‘01-‘02
|
‘00-‘01
|
‘01-‘02
|
‘00-‘01
|
‘01-‘02
|
‘00-‘01
|
|
Tax
Revenues:
|
|
Individual
Income
|
$271.3
|
$270.6
|
$5,061.7
|
$4,968.8
|
$8,179.3
|
$7,650.7
|
61.9%
|
64.9%
|
|
Corporate
Income
|
165.7
|
143.9
|
353.0
|
322.3
|
586.4
|
689.5
|
60.2%
|
46.7%
|
|
Sales
and Use
|
283.0
|
234.6
|
2,702.7
|
2,570.7
|
3,796.3
|
3,613.3
|
71.2%
|
71.1%
|
|
Franchise
|
117.1
|
123.8
|
421.8
|
503.7
|
639.0
|
500.5
|
66.0%
|
100.6%
|
|
Insurance
|
43.8
|
41.4
|
151.9
|
139.4
|
321.6
|
288.7
|
47.2%
|
48.3%
|
|
Beverage
|
13.9
|
14.2
|
131.1
|
127.8
|
174.0
|
174.0
|
75.3%
|
73.4%
|
|
Inheritance
|
10.3
|
13.6
|
80.2
|
93.0
|
130.2
|
152.7
|
61.6%
|
60.9%
|
|
Privilege
License
|
1.1
|
0.9
|
12.2
|
8.8
|
26.4
|
45.0
|
46.2%
|
19.6%
|
|
Tobacco
Products
|
3.1
|
3.2
|
30.7
|
31.4
|
40.7
|
42.4
|
75.4%
|
74.1%
|
|
Real
Estate
|
—
|
—
|
9.0
|
8.2
|
—
|
—
|
—
|
—
|
|
Gift
|
0.5
|
0.5
|
4.0
|
3.2
|
23.2
|
28.1
|
17.2%
|
11.4%
|
|
White
Goods
|
0.3
|
0.3
|
1.9
|
1.0
|
—
|
—
|
—
|
—
|
|
Scrap
Tire
|
0.8
|
0.8
|
4.0
|
2.3
|
—
|
—
|
—
|
—
|
|
Freight
Car Lines
|
0.1
|
—
|
0.1
|
—
|
0.5
|
0.5
|
20.0%
|
—
|
|
Piped
Natural Gas
|
(1.4)
|
(0.8)
|
16.7
|
31.4
|
37.9
|
28.3
|
44.1%
|
111.0%
|
|
Other
|
(0.1)
|
0.2
|
—
|
0.3
|
0.6
|
0.6
|
—
|
50.0%
|
Total
|
$909.5
|
$847.2
|
$8,981
|
$8,812.3
|
$13,956
|
$13,214
|
64.4%
|
66.7%
|
|
Non-Tax
Revenue:
|
|
Treasurer's
Investments
|
5.8
|
11.0
|
103.2
|
132.6
|
166.8
|
214.0
|
61.9%
|
62.0%
|
|
Judicial
Fees
|
9.6
|
10.4
|
82.1
|
81.3
|
112.0
|
112.8
|
73.3%
|
72.1%
|
|
Insurance
|
—
|
—
|
11.9
|
11.8
|
45.5
|
42.1
|
26.2%
|
28.0%
|
|
Disproportionate
Share
|
—
|
—
|
107.0
|
109.1
|
107.0
|
106.0
|
100.0%
|
102.9%
|
|
Highway
Fund Transfer In
|
—
|
3.4
|
10.4
|
10.2
|
14.5
|
13.8
|
71.7%
|
73.9%
|
|
Highway
Trust Fund Transfer In
|
—
|
—
|
171.7
|
170.0
|
171.7
|
170.0
|
100.0%
|
100.0%
|
|
Other
[**]
|
10.8
|
19.1
|
181.5
|
149.6
|
139.4
|
177.3
|
130.2%
|
84.4%
|
|
Total
|
$26.2
|
$43.9
|
$667.8
|
$664.6
|
$756.9
|
$836.0
|
88.2%
|
79.5%
|
|
Grand
Total
|
$935.7
|
$891.1
|
$9,648.8
|
$9,476.9
|
$14,713.0
|
$14,050.3
|
65.6%
|
67.4%
|
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