Randolph County News

Office of State Budget and Management State Budget Director Charles Perusse told lawmakers that if the state isn't already in a recession it is headed for an economic downturn. 

The discussion about the state’s economic stability came during a recent meeting of the state House Select Committee on COVID-19’s Continuity of State Operations working group, the Carolina Journal reported on April 7.

Perusse said that COVID-19's financial impact paralyzed the state economy, but the long-term economic damage remains unclear, according to the publication. Perusse predicted a decrease in tax revenue associated with the extension for filing taxes, in addition to the impact on state revenues from the overall economic decline.

“The state government will receive $2 billion from the CARES Act, which could offset the income tax revenue that will be deferred until July,” Joe Coletti, a senior fellow at the John Locke Foundation, said, according to the report. “That leaves more flexibility for the $2.2 billion unreserved cash balance.” 

Yet, Colletti said that there is no relief to be found by increasing taxes, according to the publication. The state would be unable to bear the extra burden of a tax increase to cover the loss in revenue.

Eric Boyette, North Carolina Department of Transportation secretary, has projected revenue decreases from the gas tax to the Department of Motor Vehicle Fees – adding up to $200 million in lost revenue just in the final quarter of 2020.

Even the North Carolina Judicial Branch has proposed emergency expenditures from the legislature to fund paid leave for furloughed employees as well as things such as technology improvements to meet current demands.

“While OSBM is asking state agencies to track their extra spending, it should also be looking for savings for the rest of this fiscal year and for fiscal year 2020-21 to make possible any additional spending beyond Medicaid and education,” Coletti said, according to the publication.