At the NCGA Revenue Laws Committee meeting this week, during the discussion on increasing the standard deduction, Rep Mike Hager asked what if there was additional $187.4 Million revenue that could be redirected to further increasing the standard deduction?  Fiscal Research staff did not have the numbers then but has provided followup in this email:

I thought that Rep. Hager was interested in how much more the deduction could be increased if we appropriated $187.4 million less. In the meeting I presented the impact of raising the standard deduction by $1,000 for a tax return (and $2,000 if married and filing jointly). . The total fiscal impact would be estimated as a reduction in the General Fund of $195-$205 million.

I have run the numbers on the scenario where you would appropriate $187.4 M less and you could raise the standard deduction an additional $1,200 for a tax return (and $2,400 if married and filing jointly). That would make the total increase respectively $2,200 and ,$4,400. The total fiscal impact would be estimated at $380 – $390 million.

If you go the other direction and reduce the fiscal impact of the standard deduction by approximately $187.4 (appropriate more), then a preliminary estimate indicates you would be able to raise the deduction respectively by $70 and $140. The total fiscal impact would be estimated at $10 – $15 million.

Where did Rep Hager get the $187.4 Million figure? That’s the latest estimate that the solar safe harbor costs NC taxpayers this year. It’s all about choices and priorities.

So you decide – $187.4 Million in even more subsidies for solar companies OR giving a tax break to hard working NC taxpayers?