Let's not get giddy about that $400 million surplus
Published May 11, 2015
Editorial by Fayetteville Observer, May 11, 2015.
It wasn't that long ago that state budget analysts were warning that the tax-revenue flow was running behind estimates and the state might end the fiscal year with a nine-figure deficit.
Oh how times change. Now we're looking at nine figures in the black.
How'd that happen?
The extra money is likely a result of a tax reform bill that eliminated some longstanding standard deductions and the earned-income tax credit for the poor, and generally increased paycheck withholding for many taxpayers.
The governor rushed out a rapid response, happily proclaiming the surplus as further evidence of his "Carolina comeback," our allegedly soaring economy, although recent studies indicate otherwise, especially in terms of household income, which still lags behind pre-recession levels.
Over in the General Assembly, there's less argument about comebacks and more about what to do with the money. Some, including the governor, would spend it - perhaps on raises, perhaps on other worthy causes (we'd be inclined to send it to education, if we were inclined at all toward spending it). Others would give it back to the taxpayers - a bipartisan notion, albeit for differing reasons.
But while we're still figuring out exactly why we have a surplus, let's not get carried away. This could be a one-time glitch, one of life's rare little bonuses.
While analysts ponder whether it's permanent, let's just park most of it in the state rainy-day fund - just in case next year goes nine figures in the other direction.
