NC Budget & Tax Center: ‘COVID-19 could impact economy for decades’

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Nearly 1 million North Carolinians have filed for unemployment as of May 15, 2020

RALEIGH, NC (WWAY) — The NC Budget and Tax Center predicts North Carolina could see economic impacts from the coronavirus for years.

The NC Budget and Tax Center hosted a briefing Friday on the state’s economic outlook ahead of the General Assembly’s session on Monday.

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Presenters discussed unprecedented job losses, disproportionate impacts on marginalized communities, and the likelihood of a prolonged downturn. Presenters showed nearly one million North Carolinians have filed for unemployment benefits to date. The data shows women make up 60 percent of the job losses from February to March. Leila Pedersen with the Budget and Tax Center said their analysis shows that recessions are typically harder on women and people of color.

Presenter also discussed the first state legislative relief package of $3.6 million. The state still has about $2 billion left of that to spend. Budget and Tax Center Director Alexandra Sirota said lawmakers need to use that money fast.

“We need money to be flowing to support a strong and reclusive recovery,” Sirota said. “Without spending those dollars now, we risk prolonging the economic downturn and steepening it, so that is the single most important thing legislators can do next week.”

Leila Pedersen with the Budget and Tax Center said there is a lot to learn from previous recessions. She said the great recession was difficult for everyone, but their analysis shows that recessions are typically harder on women and people of color.

“One lesson from the Great Recession that we can apply today is that stimulus measures must be carefully designed to effectively stimulate aggregate demand and preliminary estimates suggest that the economic ripple effect from the pandemic could extend for years or even decades,” Pedersen said.

The Center on Budget and Policy Priorities estimates that on average, state revenues will decline by about 10 percent this fiscal year and could fall by as much as 25 percent in the next fiscal year.

The General Assembly will reconvene Monday for its annual session after a two-week break.

To find out more from the Budget and Tax Center, click here.