Budget & Tax Center: Federal aid needed to help with NC’s $4 billion revenue shortfall

North Carolina news

RALEIGH, N.C. (WNCN) — The North Carolina Budget & Tax Center wants the federal government to help the state with its $4.2 billion revenue shortfall.

With the coronavirus pandemic hitting economies hard, state economists have projected shortfalls of $1.6 billion for the fiscal year that ended last week and $2.6 billion for the new budget year.

The Consensus Forecasting Group plans to revise those projections next month, after the extended tax deadline passes next week, and the latter number could rise even further because the initial estimate did not take into account a possible second wave of COVID-19 later in the year.

The crisis has already caused the closures of businesses and led to record monthly unemployment figures.

And Suzy Khachaturyan, a policy analyst with the nonpartisan Budget & Tax Center, says the best solution could come from Washington, D.C.

“What we need is a big, bold plan that matches the unprecedented magnitude of this pandemic,” Khachaturyan told CBS 17 News.

The $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act — also known as the HEROES Act — was approved by the House of Representatives last month but Khachaturyan says it is unlikely to pass the Senate because of its large price tag. She says a series of smaller bills also would provide relief.

Under that bill, $22.4 billion would head to the state — $13.4 billion to the state government, $9 billion to localities — over two years, she said.

“We need a plan that doesn’t run out too soon, as prior legislative packages have tended to do,” she said. “We need a comprehensive solution, because this public health and economic crisis has really affected every single part of our lives, and because inaction would be truly catastrophic — even more so than what we’ve already seen.”

The North Carolina Justice Center says the state has lost more than 62,000 jobs in state and local government — or, roughly 10 percent of the workforce in that area.

Across the country, the Center on Budget and Policy Priorities says states are facing $615 billion in shortfalls over a three-year period, and state and local governments have laid off or furloughed more than 1.5 million workers in three months.

In North Carolina, state economists project $23.4 billion in revenue for the 2019-20 fiscal year against the certified amount of $25 billion — creating the $1.6 billion shortfall. For the current fiscal year, the certified amount of $26 billion exceeds the projections of $23.4 billion by roughly $2.6 billion.

Khachaturyan says the ongoing budget stalemate between Democratic Gov. Roy Cooper and the Republican-controlled General Assembly, along with what she called “a now-10-year history of austerity budgets … has really put us on weaker footing as a state going into the pandemic, and that’s evident when you look at economic and health indicators.”

More headlines from CBS17.com:

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