North Carolina’s tax and fee collections continued to improve from a year ago, according to the latest General Fund Monthly Report from the Office of the State Controller. Individual income tax revenue for November was up to $870.8 million, $50 billion ahead of November 2019 collections. Sales taxes generated $780.3 million for the state, up from $751 million in November 2019. Total tax collections for the month reached $1.726 billion, compared to$1.635 billion. Adding in non-tax revenue, and not counting federal funds to the state, North Carolina is on pace to take in $25 billion for the year.
Total tax and non-tax revenue for the year is distorted by the delay in income tax filing and payment from April to July, but is up to $12.672 billion for the fiscal year. For a fair year-over-year comparison revenue for the April-November period in 2020 is now $17.684 billion, which is 0.1% more than the same period in 2019.
With budgeted General Fund appropriations of $24.485 billion, the state should finish the fiscal year in good shape. Even with vaccines on the way, there is still a great deal of uncertainty about the economy in 2021. Budget writers should spend cautiously, restock the Savings Reserve rainy-day fund, and hold off on new obligations for permanent spending increases, permanent tax cuts, or debt.