From the Charlotte Observer:
Top lawmakers say North Carolina will come up $500million short of its $19billion budget by the end of June.
“It would not surprise me if it hit $600(million) or $700 million,” said Sen. David Hoyle, a Gaston County Democrat and co-chairman of the Senate Finance Committee. “But $500 million seems like a given.”
Revenue at the end of January was $35 million behind estimates. The state would be in a $300million hole if not for a special Revenue Department program that settled dozens of business tax disputes, bringing in a flood of money.
But income and sales tax collections continue to trail what the legislature’s fiscal staff projected.
Barry Boardman, chief economist on the staff, said the state could face a $500million gap when the budget year ends June 30. He offered a little more optimism than lawmakers, though: He said if April tax collections are higher than anticipated, the shortfall could be cut in half. Those collections, though, are so difficult to predict that they could just as easily balloon the budget gap.
In spite of more than $1 billion in new taxes, $1.7 billion in federal “stimulus” funds, $100 million of transfers from “special funds,” and $55 million in new fees; the state could still come up half a billion short this year.
How could this be? Here’s a hint.