In 2013, North Carolina passed the first comprehensive state tax reform package since the 1930’s (HB998), with measures intended to grow economic opportunities throughout the state. Yesterday, the General Assembly’s Fiscal Research Division and the Office of State Budget and Management released a consensus revenue report that included important evidence for the success of that tax reform package – an estimated $400 million revenue surplus above the $21 billion budgeted for the 2014-2015 fiscal year.
Among the key growth-boosting measures included in House Bill 998 were scheduled corporate income tax cuts that reduced the rate from 6.9 percent to 6 percent in 2014 and 5 percent in 2015, followed by further cuts to 4 percent in 2016 and 3 percent in 2017 if certain General Fund revenue triggers were reached. The new revenue projections exceed those triggers by large enough margins – $195 million and $115 million, respectively – that continued growth is almost certain to result in those targets being hit for both 2016 and 2017.
These revenue targets were established to test the success of tax reform in growing North Carolina’s economy, and the new projections clearly show that we are on the right track. We thank the Governor and members of the General Assembly for passing a true tax reform package that made vital investments in our job creators in order to stimulate new economic opportunities for all North Carolinians.
Other states are not standing still on tax reform, however, and that means North Carolina needs to continue improving its tax climate. We urge the General Assembly to build on this positive momentum by passing legislation to remove these revenue triggers and let businesses from around the globe know that our state recognizes the value of its job creators.
Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber