by Brian Balfour
Senior Vice President of Research, John Locke Foundation
Taxpayers continue to enjoy savings from recent tax cuts, while critics continue to be wrong about revenue shortfalls.
A new report by the state’s Office of Budget & Management estimates that North Carolina taxpayers enjoyed just over $800 million in savings last fiscal year thanks to recent tax cuts.
Individual income tax collections fell by $805 million (4.6%), due primarily to reductions in the tax rate from 5.25% in 2021 to 4.99% in 2022 and 4.75% in 2023.
Meanwhile, critics of the state’s tax cuts that for more than a decade have been predicting massive budget shortfalls continue to be proven wrong. Total General Fund revenue of $33.5 billion came in $3 billion ahead of projections.
Overall revenues were up in no small part due to returns earned on state reserves, such as the state’s Savings Reserve Fund which now stands at a historic high exceeding $4.7 billion.
The past dozen years of fiscally conservative budget and tax policies continue to pay dividends for North Carolina taxpayers.
It’s also being reported that planned tax cuts could save taxpayers between $1.6 and $6.7 billion over the next five years, depending on the final details.