Elon Law professor Andy Haile writes in a December 11 Business Journal column that North Carolina's legislature should reform the state's tax code comprehensively to avoid a near-term fiscal crisis.
Haile notes that North Carolina increased taxes by $1 billion last year in an effort to balance the budget, primarily through a sales tax increase, but he also highlights $1.8 billion in federal stimulus funds that the state relied on to balance its current budget.
“Those funds will no longer be available starting in July 2001,” Haile writes. “That means unless the economy recovers or the federal government bails out the states again, the General Assembly will face a difficult choice in 2011 of either severely cutting government services or substantially increasing taxes.”
To avoid short-sighted decisions about how to raise revenue in the midst of a fiscal crisis, Haile argues for comprehensive reforms to the tax system now. He suggests additional changes in the state sales tax, as well as changes to the corporate income tax and to the state’s policy of conforming its tax code to match annual changes in the federal tax code.
Click on the E-Cast link to the right of this article to read Haile’s column.
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