North Carolina has a projected one-time $1.4 billion surplus in state revenues through Fiscal Year (FY) 2025, according to the latest consensus revenue forecast released on Wednesday by the Office of State Budget and Management (OBSM) and the General Assembly’s Fiscal Research Division.

That surplus includes an estimated $413 million in the current fiscal year, and an estimated $1 billion in additional revenue in FY 2024-25.

With those extra anticipated funds, the revised revenue forecast for FY 2023 is $34.14 billion, a 1.2% increase from the certified budget. In FY 2024-25, the revised forecast is $34.37 billion — reflecting the expected $1 billion surplus, or 3% increase from the certified revenue.

The anticipated overcollections come from individual income and sales taxes, the OBSM document says, “due largely to continued growth in earnings and consumer spending.”

However, the forecast anticipates lower corporate tax revenues “due primarily to a larger-than-expected shift in business tax collections from corporate income tax to individual income tax.”

“The upward revision is due to more robust economic growth than foreseen at the time of the last consensus forecast in May 2023,” the OBSM consensus document says. “Contrary to the CFG’s (Consensus Forecasting Group) expectations in May 2023, the economy demonstrated greater resilience and avoided a predicted period of stagnant growth, or ‘slowcession,’ in late 2023 and 2024. Instead, the April 2024 consensus forecast expects a ‘soft landing,’ with inflation easing toward the Federal Reserve’s 2% target even as the economy continues to grow at a modestly slower pace than in 2023.”

Consensus forecasts are an essential component of the state’s budget process, as they help lawmakers know how much money is on the table to be invested.

The state’s legislative short session begins next week, on April 24. During this session, lawmakers can adjust the two-year budget passed during the previous long session and are able to discuss bills that previously passed one house or recommendations from a study commission.

Democratic Gov. Roy Cooper typically releases his budget proposal shortly after the consensus forecast comes out. Then, the House and Senate each release a proposal and work together to pass an updated compromise budget.

House Speaker Tim Moore, R-Cleveland, recently told media that he would like to fund more money for the Opportunity Scholarship program. The program, which funds private school vouchers at eligible schools, was expanded during the long session to all families regardless of income.

About 72,000 applications were received ahead of the deadline on March 1, and of that, the families of 13,511 students were notified that they received a scholarship for the 2024-25 school year.

Moore said Republicans are discussing funding an additional $300 million toward the program, the News & Observer reported. The 2023 budget set the revised appropriation for the Opportunity Scholarship grant fund reserve to $354.5 million in FY 2024-25.

The families notified so far that they would receive a scholarship were all Tier 1 families, meaning they came from the lowest income levels. This means additional funding would go toward families with higher incomes.

Moore also said he would like to fund an additional $400 million toward Medicaid, child care subsidies, and additional raises to school and state employees. 

On Thursday, Moore released an email statement regarding the $1.4 billion surplus.

“Today’s revenue forecast is a sign that North Carolina is on the right track,” he said. “Our conservative approach to responsible spending has been effective in strengthening our economy and attracting business to our state. When those businesses bring thousands of jobs to NC and our economy is strong, all of North Carolina wins.”

The OBSM document used more uncertain language regarding the forecast.

The end of April is typically the most uncertain time for revenue collections, the document said. Another revised consensus will be released in mid-to-late May if actual collections differ significantly from the most recent forecast.

“Revenue forecasts are always uncertain,” the document says, “but a recent business tax change affecting pass-through entities has further raised forecast uncertainty for individual and corporate income taxes due to a shift in payments between tax types and to differences in taxpayer behavior between business entities and individuals.”

You can read the full OBSM forecast document here. You can also view the Fiscal Research Division’s forecast presentation here.

North Carolina Gov. Roy Cooper (D) said Wednesday he thinks President Biden can win his state in this year’s upcoming presidential election.

“I believe President Biden can win North Carolina,” Cooper said at Semafor’s World Economy Summit. “And the campaign obviously believes that because they are investing. And they are there.”

Biden’s campaign has set its sights on flipping the Tar Heel State in the’ next presidential election, after former President Trump won the state in both the 2020 and 2016 elections.

“​​[T]his was President Biden’s closest loss in 2020,” Cooper said, pointing to the 1.3 percent margin. He added it’s “the third fastest growing state in the country” and “a lot of college educated-people are moving into North Carolina.”

According to a polling average by The Hill/Decision Desk HQ, Trump is leading Biden by 3.4 percentage points in North Carolina, with Trump at 48.3 percent and Biden at 44.9 percent.

But the Biden campaign’s North Carolina communications director Dory MacMillan told The Hill the campaign was optimistic.

“North Carolinians know that while President Biden is fighting for us, Donald Trump is fighting for billionaires, corporations, and an extreme agenda that hurts our families and our economy,” MacMillan said.

“Our campaign will continue to communicate across every corner of this state to reject Trump’s attacks on our families and earn four more years of progress with President Biden.”

In February, Cooper referred to the 2024 race as a “stark choice” between Biden and Trump. 

“But the choice is going to be, that do you want a president who wakes up every morning thinking about the American people?” Cooper said at the time. “Or do you want a president who wakes up every morning thinking about himself? And that is going to be the stark choice.”

The Hill has reached out to the Trump campaign for comment.

There is another intense race in North Carolina this year — for Cooper’s own position. The current attorney general of North Carolina, Josh Stein (D), will face the state’s current lieutenant governor, Mark Robinson, in a closely watched match-up for governor in November.

It all started with Donald Trump’s win in 2016. After the election, a group of shellshocked progressive Durham Democrats met at a bar to commiserate over their loss.

“We just were obviously horrified post-2016 election,” said Andrea Cash. “And that was the real moment of, ‘What are we going to do?’”

What they did was create FLIP NC, an all-volunteer grassroots organization co-founded by Amy Cox and Briana Brough. For the next year they knocked on 20,000 doors and sent 250,000 text messages to prospective voters in legislative districts that were competitive in the 2018 elections. Two years later, they worked even harder, making 400,000 calls and sending 1.4 million text messages to prospective voters.

FLIP’s focus in its first few elections was winning competitive seats up for grabs in the legislature. Volunteers wanted to end gerrymandering, and put legislators in office who were not going to draw districts skewed toward a specific political party.

“We want to be able to fight on a fair playing field for our progressive values, and it doesn’t feel like we can do that in North Carolina without fair maps,” Cox said.

But after the North Carolina Supreme Court upheld Republican lawmakers’ gerrymandered maps last year — the high court’s Republican majority reversed a ruling issued by a Democratic majority just months earlier — it became clear to FLIP NC volunteers that they’d need to focus on different races in the 2024 election: those for seats in the state Supreme Court and Court of Appeals.

“We can’t get fair maps,” Cox said. “Now we have to flip the court, then the legislature, so that we can get fair maps in 2030.”

Democrats cannot retake control of the state Supreme Court this year. Only one seat is up for election, the one currently occupied by Justice Allison Riggs, a Democrat. Even if Riggs wins, Democrats will still be outnumbered by the Republicans 5-2.

But if organizers like FLIP NC protect Riggs’ seat, protect Justice Anita Earls’ in 2026, and then flip two of the three seats up for election in 2028, Democrats will regain control of North Carolina’s high court — just in time for redistricting in 2030, when the maps will be redrawn once again.

“We need judges who are fair and who are not motivated by these extreme partisan aims, which I think is what we have now,” Brough said. “We focus on the courts because if we don’t have judges who are going to protect the rights of citizens, then we are not going to ever be able to stop the gerrymandering.”

FLIP NC’s efforts are aligned with the state Democratic Party’s. Earlier this year, Anderson Clayton, the party chair, vowed to put more attention and resources on the judicial races this November. After getting swept in recent statewide judicial races, Clayton said in January the party would hire a judicial coordinating campaign director, a specialist she said the Republicans have had for years.

FLIP’s ethos also echoes public comments made by Riggs, the Supreme Court justice and candidate herself. In a virtual forum in January, Riggs said she wasn’t just running to keep her seat. She was campaigning for the long game, talking to voters about Democratic judges’ values in an attempt to build “the pipeline to ensure that when we have the chance, we win back our courts in 2028.”

‘These races matter’

FLIP NC volunteers practice a “deep canvassing” style, prioritizing conversational flow over strict adherence to a script. They still hit the highlights, the stakes of the judicial races, but they ask voters what issues matter to them and talk about how judges’ decisions impact their everyday lives.

“It’s not transactional. It’s going to the door and asking, ‘What issues matter to you?’” said Cash, FLIP NC’s director of communications.

“Ideally, we want the voter to talk more than we’re talking,” Cox said. “It’s not just delivering information at them. It’s listening.”

They pass along an information sheet that gives general details about the political makeup of the state Supreme Court, and another that details how the Republican judges have ruled on key issues, inviting prospective voters to learn about how GOP Supreme Court justices blocked almost $700 million in public school funding and restored a voter ID law that a Democratic majority on the high court had deemed unconstitutional just months earlier. Their website makes note of Republican justices’ cozy relationship with corporations and the threat they can pose to reproductive rights.

“This court feels very corrupt, and people don’t know about it,” said Cox.

FLIP NC hosts a monthly canvas in Durham. Their next one is May 19. They are planning on hosting others in Asheville, Raleigh and Wendell in the coming months. And they are open to doing more throughout the state, should they find volunteers interested in helping spread the word throughout, or outside of, The Triangle.

“We hope to host more canvasses if we have other volunteers who can bring them to other areas,” said Cox.

For this year’s election, volunteers have knocked on 1,500 doors in Durham over two canvass sessions. Three issues they keep hearing about from voters: abortion, housing and education.

“We train volunteers to have the information about how the judges are ruling on all of these things,” Cox said.”[But] delivering that is not the most important thing. We want people to feel heard and we want them to come away with, ‘These races matter.’”

Turnout tends to be higher in presidential election years than in the midterms, but FLIP NC is trying to convince North Carolinians to fill out the entire ballot, not just tick the box for who they want to be president.

“We even saw that in the Democratic primary in March, people who voted in the presidential and then dropped off and didn’t vote in the governor’s [race,] didn’t vote in the Supreme Court [race,]” Cash said. “It’s just not a given that everyone who goes to the polls will fill out the full ballot.”

Despite the challenge, Cash, Cox and Brough are optimistic, if cautious. They are excited about the direction of the Democratic Party’s leadership and its candidates. But that doesn’t mean they’ve forgotten their despair after Trump’s victory in 2016, the election that led to FLIP NC’s genesis.

“I will never again be flagrantly optimistic about elections,” Brough said. “I just think you need to fight for every inch, because you don’t know what’s going to happen.”