North Carolina is bringing in a lot more income tax revenue, the state's Medicaid costs are growing significantly, and its unemployment rate will likely hang around 9 percent for the next two years. Those are just a few findings from the state's annual financial report released Tuesday.
North Carolina’s bottom line is looking pretty good.
The report from the Office of the State Controller covers the fiscal year that ended in June. Clayton Murphy works in the statewide accounting division.
"The state is in better shape, but we still have a ways to go," Murphy said.
The state's net assets increased by $1.6 billion last year. If it were a business, that would basically be its profit. It’s not as big as it was the year before, but it’s certainly a long way from 2009, when the state’s net assets actually decreased.
Murphy said a big part of the improvement is tied to rising revenue from income taxes.
"In the past when we were in the depth of the financial crisis, we had a really large decrease in revenues," Murphy said. "Those revenues are slowly coming back."
That’s a good sign for the economy. Revenue from individual and corporate income taxes has increased more than $2 billion since the worst part of the recession.
On the other side of the equation are expenses. The state cut costs last year on some government programs and education. But Murphy said it keeps spending more on health and human services.
"The biggest driver of Health and Human Services would be Medicaid, which is the state’s largest public assistance program," he said.
Medicaid costs increased significantly last year, in part because more people enrolled and also because federal stimulus money from the recession that helped states cover it ran out.
Looking forward, the report estimates the state will be in even better financial shape next year, but unemployment will still remain around 9 percent.