EDITORIAL: NC’s fiscal cliff

Last week in this space, we discussed taxes, what we use them for and why everybody needs to kick in their fair share to make sure the trains run on time, literally!

But we may have, as we say in journalism, buried the lede.

As we lamented the loss of corporate taxes in NC (disclosure: We are a corporation!), we neglected to mention that, under Republican rule, the state has been running a budget surplus, which means that we have not spent all the monies collected. It will be as much as $1.4 billion this year, against a $3.25 billion surplus last year.

Understand, too, that these instances of surplus were funded largely by the federal government during a pandemic, when there was money flying around everywhere.

During that time, we have reduced starting pay for teachers down to 46th in the nation, made deep cuts to childcare services and given short shrift to things like roads and bridges, drinking water, rural broadband access and other critical pieces of infrastructure while deliriously underfunding public schools.

Surplus or no, these things are approaching critical mass.

This fiscal year, the General Fund budget is set at about $29.8 billion. The nonpartisan Center for Budget and policy priorities estimated in February that recent tax cuts will decimate the General Fund by almost 11 percent by 2028. That’s more than $2 billion.

A recent analysis in the Assembly posited that this fiscal cliff is why the legislature pushed so hard for legalized sports betting, and why Senate President Pro Tem Phil Berger is personally advocating for more casinos in our state.

That helps… a little.

Sports betting should take in about $65 million in tax revenue this year, and as much as $100 million in the years to come. It has generated more than $10 million in tax revenue in March alone, its first month. The casino is a stickier widget, due largely to the fact that nobody wants one near their house. Though we at TCB are not anti-casino, per se, we can’t ignore the complaints of communities that don’t want a casino in their neighborhood. And we know that, even when bundled with sports betting, video poker and any other vice industry, it will never cover a $2 billion shortfall.