The Joint Appropriations Committees of the NC House and Senate got a glimpse of what might be good news. The Fiscal Research Division of the Legislature reported the latest figures Tuesday and number crunchers are calculating that the projected 3.7 billion shortfall might be less than had been anticipated….perhaps as much as 1 billion dollars less.

2010-2011 personal income tax withholdings increased 1.1 percent. December’s sales tax collections improved 8.5 percent over last December and, for the quarter just ended, are up 2.7 percent over last year. Revenues could improve by as much as 200 million more than had been forecast.  

Estimates are that about 150 million will be saved from the continuation budget, 50 million in savings will be realized from the projected State Health Plan contribution and some enrollment increases might be 90 million less than expected.

If the Governor and lawmakers can work together the state might be able to squeeze between 400 and 700 million dollars from this year’s budget that ends June 30th,  further reducing the gap between next year’s revenues and expenses.

We must caution that some of these are “soft” numbers, meaning you can’t take them to be bank, but if they are accurate the projected gap between revenues and expenses could be between 2.5 to 2.8 billion dollars, considerably less than the 3,7 billion dollar number that Fiscal Research predicted in December.

This is good news. Make no mistake. 2.8 billion dollars is still a lot of money needed to balance the budget, but certainly a lot easier to make up than 3.7 billion.

This needs to be put in context. There are signs North Carolina’s economy is improving, but not quickly and not by large amounts. Still, any improvement is good news.

What are the implications of all this? Be sure to tune in this week’s NC SPIN for a more complete discussion.