Public finances usually follow private finances. That is, if the private sector is having economic problems, these issues will affect tax revenues and the public sector. This has happened in North Carolina, but is there any evidence public finances are beginning to turn around? N.C. State University economist Mike Walden answers.
“Well, our General Assembly recently went through a trying time where they had to reduce the level of spending in the state from the general fund compared to what they’d planned a couple of years ago. And a large reason behind that was that public finances … have suffered as a result of the recession.
“But the good news is, if you look at revenue flowing to the state of North Carolina over the last six months, there is definitely an upward trend. I compared revenues from each of the last six months going into the general fund to the levels in the pre-recessionary period for the same months, and we definitely see them picking up. In fact in May, May revenues were at the same level as they were in May before the recession.
“So we do see some good news here, and we do hope that this good news will continue so that the next time the General Assembly has to meet they will not have to deal with such a difficult budget.”