North Carolina still lacks a budget as tax cuts move forward

As of March 2026, North Carolina remains the only state in the country without a budget.

On Tuesday, the North Carolina Office of State Budget and Management and the General Assembly’s Fiscal Research Division released a revised revenue forecast showing collections are slightly higher — about 2.8% — than originally projected.

Despite the increase, North Carolina is expected to have about $360 million less in revenue in the next fiscal year compared with the current fiscal year.

With current projections indicating the low-revenue threshold will be met, the personal income tax rate is scheduled to be reduced again in 2027 and 2028.

North Carolina’s highest-income households would benefit most, with an average tax reduction of about $8,000 for the top 1% of households. Most North Carolinians would see an average decrease of about $170, according to an additional report from the Office of State Budget and Management.

The projected revenue loss could limit the state’s ability to meet current needs, including funding for public schools, health care and other essential services, at a time when families are already facing rising housing and child care costs.

Lawmakers face decisions about whether to continue the scheduled tax cuts or adopt a budget that prioritizes investments in services and infrastructure across the state.

Additional analysis from the North Carolina Budget & Tax Center highlights the long-term impact of continued tax cuts on state revenue and public investment.