Taxpayers will have to break the state out of its Catch-22.
North Carolina is delaying income tax refunds to individuals and businesses because the state hasn't collected enough tax revenue.
People due refunds tend to send in their tax returns early, and people who owe push the April 15 deadline.
Thus, the state says it's paying what it can as soon as it can.
N.C. Revenue Secretary Kenneth Lay said the situation is like managing the family checkbook.
"When you're writing those checks to pay your bills, you want to make sure that you have enough in the account to pay each one of them," he said.
That's true, but try telling a creditor you'll pay a monthly installment as soon as you have the money.
Revenue collections lagged last year, too, but North Carolina is ready this year, Lay said. The state has a plan: Put refund checks on ice.
Taxpayers who overpaid on their income taxes gave the state the opportunity to use the excess money with no interest.
State officials shouldn't be surprised if people are upset that the state will keep their money a little while longer.
This Catch-22 should not become an annual occurrence. Refund tax returns coming early and underpaying taxpayers filing later is a recurring theme.
The state should plan for it.
Running statistics on the average number of refunds owed and the average amount should help the planning process.
It could also give Raleigh officials and taxpayers an idea of how much free money the state gets from too-high payroll deductions and the length of time the state has that money on hand.
For now, North Carolina taxpayers who are counting on their refund checks will have to wait.
How long they wait is up to taxpayers who underpaid and the time necessary to push that money through the revenue stream.
This is poor planning on the part of the state, and taxpayers are being penalized for it.
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