North Carolina faces a potential shortfall in its state budget, as revealed by a new consensus revenue forecast. Released by the Office of State Budget and Management along with the Fiscal Research Division, the report anticipates that the state will have $360 million less in revenue next year. This situation is largely attributed to upcoming personal income tax reductions that are expected to result in a $3.4 billion revenue shortfall by the fiscal year 2028.
The outlook suggests that state revenue will fall $2.8 billion below what is needed to sustain current service levels, considering inflation and population growth. Governor Stein responded to these projections with urgency.
“North Carolina has found a recipe for success, but if we fail to act now, we’re going to be several ingredients short. Today’s forecast means that we will soon fall into a budget gap of at least $2.8 billion, causing the state to have to make painful cuts to critical services like public safety, education, and health care. There is still time to act to keep up North Carolina’s positive momentum. As our population rapidly grows and the federal government becomes a less reliable partner, I urge this General Assembly to study these new realities, hit pause on outdated, irresponsible tax triggers, and invest in our most important resource: our people.”
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