State income-tax revenue fell 26%
in the first four months of 2009
compared to the same period last year
North Carolina’s personal income revenues
which represent 48.3% of the states total for fiscal 2008
fell 19.8% from January to April, 2009
States are required by law to balance the budget
so lower tax revenues will translate in service cuts
rather than red ink
Already states such as Kansas
are slowing the payment of income-tax refunds
and delaying payments to local school districts
Withholdings from the first four months of 2009
were down 6.9% from the same period in 2008
"many people had a very bad start of the year"
with lower salaries and wages
Senior Fellow at the Rockefeller Institute
The time span notably includes the April 15 deadline
for filing taxes
a critical time for states to collect revenues
From January to April 2009
North Carolina’s Withholdings fell 8.1%
Estimated Tax Payments fell 32%
Final Payments fell 36.3%
and Refunds fell 18.5%
The sharp decline was a rude awakening for many states
both because income tax is the main source of revenue
and because the drop was deeper than expected
Should Guilford County and Greensboro City
expect increased funding from the state
if North Carolina’s 2009 budget deficit is about $4.5 billion
including monies emptied from the rainy day reserve and the lottery
and about $1 billion from the federal stimulus package
which disappears in 2010-11?
For most states, the fiscal year starts on July 1
The plunge in income-tax revenue
means some states may have to revise budget agreements
for 2009-2010
and may still face gaping holes in 2011
when federal stimulus money runs out
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