By Alexandra Forter Sirota & Edwin McLenaghan
Budget & Tax Center
- The Great Recession caused the deepest decline in state tax revenues in more than half a century. While revenues have made a modest recovery in recent months, they are still far below their historical levels.
- Although the severity of the economic downturn and continued high unemployment are the primary factors driving revenues to such low levels, North Carolina’s outdated, increasingly inadequate revenue system also shoulders some of the blame for continued low revenues.
- Policymakers could pursue five strategies to improve revenue collections in the near term that would also push North Carolina in the direction of a modernized revenue system. Taken together, these five strategies could raise over $1.5 billion to partially restore cuts to a range of public investments.