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Posted on September 1, 2016 at 10:29 AM by Paige Worsham
This month the Department of Revenue will forward to NC Counties $251.58 million in sales tax revenues from June sales. This is actually a decline from the previous two months, and only an $8.6 million increase over the same period last year. This movement is in line with the previous month’s results, where we saw a decline of $2.0 million statewide. So sales tax growth has become essentially strong but flat.
This trend is generally no different than what we are seeing on the national level, where capital purchasing is flat to negative. According to the Atlanta Federal Reserve, June saw a decrease in core capital goods shipments – 0.4% month over month. The Atlanta Reserve also notes that year-over-year growth rates continue to be negative and “suggest little to no momentum for business investment in equipment in the near term.” There is some survey data indicating there was some uptick in business spending in the Carolinas in July (which we would see in the next round of sales tax numbers), but they are coming up from very low numbers.
In looking near-term, it appears the uncertainty outlined in last month’s update may have the expected impact on the business community. We are now at less than 100 days until the presidential election. These four-year elections always tend to cause uncertainty. Also, investors are growing increasingly concerned that the Federal Reserve will finally start to increase interest rates. This is based in part on the monetary policy statement issued just last week, and the general belief that the Fed will have to start increasing rates soon so they have a tool to address the next slowdown (the current Federal Funds rate is 0.25%). Similarly, while the Carolinas Survey of Businesses now shows some improvement in business leaders’ expectations, the results are still significantly below where they were a year ago.
On the good news front, Dr. Walden indicates the likelihood of a recession in the remainder of 2016 is very low. And John Connaughton of UNC Charlotte sees continued slow but steady NC growth through 2017.
As a final note, we are including the below property tax rate map. This represents the most current information provided to the North Carolina Department of Revenue. This, along with 59 other maps, can be found in the soon to be released “Between the Lines” publication. Similar to last year’s “County Snapshots,” this version has an additional GIS component. It will be available in print at the NCACC annual conference, with a special interactive version going up on the website in late August.