“The sky is falling! The sky is falling!” quacked Ducky Lucky. “And how do you know the sky is falling, Ducky Lucky?” honked Goosey Loosey.
“Why, Turkey Lurkey re-Tweeted it!” quacked Ducky Lucky. “And how do you know the sky is falling, Turkey Lurkey?” honked Goosey Loosey.
“Why, Henny Penny shared it on Facebook!” gobbled Turkey Lurkey. “And how do you know the sky is falling, Henny Penny?” honked Goosey Loosey.
“Why, Chicken Little wrote an article in the newspaper!” clucked Henny Penny. “And how do you know the sky is falling, Chicken Little?” honked Goosey Loosey.
“Why, I saw it with my eyes and I heard it with my ears, and besides…the Justice & Tax Center says it’s true!” squawked Chicken Little. “And so does the Budget & Justice Center! And so does the Tax & Budget Center!”
“Oh my! Oh my! It must be true!” honked Goosey Loosey. “Those are all non-partisan sources, so surely the sky must be falling then! We must run and tell everyone how stupid and immoral these Republicans surely must be!”
“I shall Tweet more Tweets and tell all my friends to re-Tweet them!” quacked Ducky Lucky. “Yes! And I shall make comments on everyone’s Facebook posts and tell all my friends to share them!” gobbled Turkey Lurkey. “And I shall send out a bulk fundraising email to my entire list and tell them they must contribute five, ten or fifteen dollars to elect more Democrats before it’s too late!” clucked Henny Penny, who had recently been elected state chair of the party.
“And I shall write another front-page article in the newspaper that you can Share and Tweet and Post!” squawked Chicken Little. “And I shall organize another protest!” honked Goosey Loosey. “And all of you will come and we will all hold hands and sing songs and tell everyone how stupid and immoral and racist these Republicans surely must be!”
“Surely that will get printed in the newspaper, Goosey Loosey!” quacked Ducky Lucky. “Surely it will be popular on Facebook, Ducky Lucky!” gobbled Turkey Lurkey. “Surely it will be re-Tweeted a thousand times, Turkey Lurkey!” clucked Henny Penny.
“And when we are through, we should all go back to back to the coop and regroup,” squawked Chicken Little. “To find another thing for us to be outraged about again tomorrow!”
Back in May, when it was first announced that the state budget could expect to see a $400 million surplus this year, Senate Leader Phil Berger had a little fun with all the doomsayers who said the sky would fall as a result of 2013’s historic tax reform efforts:
“Two years ago, when the Republican legislature passed the largest tax cut in state history, Chicken Littles on the left loudly cried North Carolina would lose so much tax revenue that students wouldn’t have teachers, roads wouldn’t be built and our universities might have to close.” —Senate Leader Phil Berger
While the left has maintained a constant drumbeat of doom and gloom ever since they lost control of the state government back in 2011, the frightening prospect of lower income tax rates really ruffled their feathers.
Enter the NC Justice Center, NC Policy Watch, and the NC Budget and Tax Center — “non-partisan” tax-exempt left-wing advocacy groups — who all predicted that the GOP’s tax reforms would lead to a massive $600 million budget deficit. A few of the many examples:
- NC PolicyWatch: Monday Numbers (by Chris Fitzsimon, May 12, 2014): “600 million — amount in dollars of the potential state revenue shortfall in 2014-2015 because of the higher than expected cost of the personal income tax cuts enacted in 2013”
- BTC REPORTS: 2015 Budget Undermines North Carolina’s Competitiveness (by Tazra Mitchell, Cedric Johnson & Alexandra Forter Sirota, September 2014): “…the new tax cuts already are costing the state much more than expected and will continue to reduce the revenue that is available…”
- Massive tax cuts and NC’s ballooning revenue shortfall (by Chris Fitzsimon, NC Policy Watch podcast 10/27/2014)
- Expert Opinion: N.C. Budget & Tax Center’s Tazra Mitchell on our state budget: “Legislative leaders and the governor failed to acknowledge the tax plan’s growing cost in the 2015 fiscal year budget, likely because they knew that the huge revenue losses put the state on a financially irresponsible and unsustainable path. By the end of the fiscal year, the revenue shortfall could reach as high as $600 million—for a total cost of more than $1.1 billion”
- Revenue continues to underperform projections, shortfall likely to grow larger (by Tazra Mitchell, October 2014)
- Mid-year revenue shortfall grows, official revenue outlook filled with caution and uncertainty (by Tazra Mitchell, January 21, 2015): “…The fact that lawmakers allowed the next round of costly income tax cuts to go into effect earlier this month—rather than pausing the plan and reassessing the damage—will do little to improve the revenue picture going forward.”
- Time for legislators to stop ignoring North Carolina’s revenue shortfall (by Chris Fitzsimon, NC Policy Watch podcast 1/26/2015)
- Revenue Shortfall Caused by Tax Plan Hinders Investments in a Strong Economy (North Carolina Justice Center)
The media, of course, ate it all up faster than a box of hot Krispy Kremes.
See, the cozy relationship between the media and these advocacy groups is nothing new. “In North Carolina, left-wing nonprofit advocacy groups for decades have wielded an alarming amount of power in the media, state politics, and government,” reports the Civitas Institute in their revealing analysis, Mapping the Left. “They work together, both in loose coalitions and organized networks, to influence and control public policy.”
After the news of the $400 million surplus came in, the folks over at North Carolina Republican Party headquarters were quick to point out just how wrong all these “experts” turned out to be:
“For years, Chris Fitzsimon and his network of liberal think tanks, blogs and newspaper columns has served as the brain, mouthpiece and echo chamber for the left’s antagonism and obstructionism of Republican policies,” said Ricky Diaz, spokesperson for the NCGOP. “How could someone who is often quoted as an expert in the media be so far off the mark about GOP-led tax cuts and their effect on the budget? The fact that he and other ‘policy analysts’ on the left could be off by $1 billion further proves that the left is losing all credibility on taxes, the budget and the economy.”
As you might have heard by now (or not — positive results from conservative policies for some reason never seem to get quite the media attention), the state’s revenue surplus isn’t $400 million.
All these non-partisan left-wing experts bet the Republican Tax Reform plan would produce lower revenue. And they were all spectacuarly wrong.
Every month over the course of the year, the professional staff of the Fiscal Research Division makes a report to the General Assembly called the “General Fund Revenue Consensus Forecast.” Basically, this is the total amount of money which the legislature’s professional staff believe will come in to the state’s General Fund by the end of the fiscal year (in order to pay for all the items that state government plans to spend money in the next fiscal year’s budget). The estimates are constantly revised as more information is known, and legislators use that information to tweak things along the way if necessary.
Taxes, of course, are collected by the state over the course of an entire year. Actual revenue is a moving target until the end of the current fiscal year.
Sometimes the total amount of revenue that comes into the state’s coffers by the end of the fiscal year doesn’t meet the projections, and sometimes the total amount of revenue received by the end of the fiscal year exceeds expectations; typically, at the end of the fiscal year, the difference is just a few percentage points (negative or positive). So it’s disingenuous to stop at some point midway through and claim there isn’t enough revenue, unless you’re trying to score political points or buttress an ideological narrative.
Had the Chicken Littles been correct and revenues were $600 million below the projected amount, it would have been a difference of -2.94% — well within the average historical variance. As it turned out, the actual amount of revenue exceeded the projected amount by $445 million, a difference of +2.08%.
The Fiscal Research Division has been remarkably accurate in its projections over the last three decades, with just a few aberrant years (1991, 2002, 2009) correlating to national recessions. Here’s a chart that shows how much revenue the state estimated would come in (Projected) and what finally came in by the end of the fiscal year (Actual) over the last 25 years:
The moral of the story? Don’t believe everything you read — especially if it’s coming from anyone at the NC Justice Center, NC Policy Watch, or the NC Budget and Tax Center. Or a talking chicken.