Revenue thresholds that trigger tax cuts in the final budget fall below spending needs The chart shows that spending would exceed revenue in Fiscal Year 2026-2027 without additional legislative action. By the year when the full Senate tax plan is fully implemented, the state would have an estimated $7.1 billion revenue gap, assuming that current service and spending levels are maintained. Adding the requirement to fund Leandro Plan increases NC’s revenue gap to $12.8 billion.

Revenue thresholds that trigger tax cuts in the final budget fall below spending needs

Revenue thresholds for personal income tax cuts in the 2023 Appropriations Act, along with estimated spending forecasts 

*As the NC Supreme Court ruled in November 2022, the Leandro Plan sets forth the additional new programs, policy changes , and investments necessary to meet every student’s constitutional right to a sound basic education by the 2027-2028 school year. These estimates include funding for teacher raises, which were recommended in the plan but without dollar estimates.
Chart: NC Budget & Tax CenterSource: NC Fiscal Research Division, 2023 Appropriations Act, NC Justice Center Education and Law ProjectGet the dataEmbedDownload imageCreated with Datawrapper