State facing 10 percent shortfall

North Carolina could fall short of projected revenue by 10 percent.

According to a presentation on the budget outlook prepared by the legislature's Fiscal Research Division, the state could fall short of its expecations by approximately $2 billion.

Through December, tax collections were down 6.6 percent.

Particularly hard hit by the recession are three taxes that make up 86 percent of general fund revenues: the personal income tax, the sales and use tax and the corporate income tax. All three are directly tied to the economy.

But state budget officers won't know exactly how bad the recession has hurt tax collections until after April 15, when corporate and personal income taxes are paid for the year.

The presentation says it is "highly probable" that the state's tax collections won't return to the projected amounts until the 2010-11 budget year.