revenues

RALEIGH – North Carolina leaders should avoid turning a one-year state revenue surplus into a long-term budget nightmare. That’s the new warning from a John Locke Foundation fiscal policy analyst.

State tax revenues grow in strong economies. Politicians use the new revenue to create or expand government programs. In recessions, revenues fall and tax rates rise to pay for the higher level of spending. Spending and taxes in the last ten years illustrate this pattern. As North Carolina enters another period of expanding revenues, Gov. Mike Easley and the General Assembly must avoid the temptation to increase spending so they do not have to increase taxes in the next recession.