Economists in the Office of State Budget and Management and the General Assembly’s Fiscal Research Division released an updated consensus revenue forecast Feb. 15 anticipating an additional $3.25 billion in state revenues for FY 2022-23, putting total state General Fund revenue collections at $33.76 billion.
“These increased funds are needed desperately to pay our teachers more, fund our schools, provide quality child care for parents in our workforce and to pay for the tax cuts for working families that we put in place last year,” said Gov. Roy Cooper. “I hope we can negotiate a bipartisan budget that makes these investments without more tax breaks for the wealthiest among us.”
The revised consensus forecast for FY 2022-23 anticipates overcollections of $3.25B (10.7%) relative to certified revenues of $30.51B, putting total state General Fund revenue collections at $33.76B. The revised forecast anticipates $67.35 billion for the next biennium, with $33.71 billion in FY 2023-24 and $33.65 billion in FY 2024-45.
The primary drivers of the anticipated surplus are smaller-than-expected decline in individual income tax collections, especially due to larger-than-expected tax payments from pass-through businesses electing to be taxed at the entity level; persistently high corporate profits, particularly among large multinational corporations; resilient consumer spending despite longer-lasting inflation in goods and services subject to sales tax; and higher-than-expected investment returns on the General Fund balance.