Tax policy in final budget means that revenue over time won't keep up with current levels of spending, leading to structural budget imbalance

Structural budget balance under projected current services baseline budget, Fiscal Year 2026 through Fiscal Year 2034 

OSBM baseline structural budget balance estimates based on the enacted budget for FY 2026 plus $319M in Medicaid receipts from the Medicaid Contingency Reserve, with growth for projected inflation and population growth starting in FY 2027. Analysis of the NCGA tax agreement models a personal income tax rate of 3.99% in 2026; 3.49% in 2027, 2028, and 2029; 3.24% in 2030, 2031, and 2032; and 2.99% thereafter. Analysis models a corporate income tax rate of 2% in 2026 and 2027, 1% in 2028 and 2029, and 0% thereafter. Analysis also includes eliminating the sales tax exemption for datacenter electricity.
Chart: NC Budget & Tax CenterSource: Office of State Budget and ManagementGet the data Download imageCreated with Datawrapper