by Sarah Michels, Carolina Public Press April 16, 2025
RALEIGH — In February, state economists warned of a looming fiscal cliff if the income and corporate tax rates continue to drop. Senate Republicans don’t exactly believe them. On Monday, they presented a budget proposal that doubled down on income tax cuts, not only ignoring advice to pause them, but also eliminating pesky revenue “triggers” getting in the way of further reductions.
The proposed budget would spend $32.6 billion in the first year and $33.3 billion during the second year (North Carolina operates on a two-year budget.). These are 5.8% and 2.1% year-over-year budget increases, respectively.
Overall, Senate Bill 257 shows “modest growth” to reflect North Carolina’s rising population and economy, Senate leader Phil Berger said.
Tax policy and Helene recovery were the focuses of the 439-page proposal — the first major move in a months-long spending negotiation with the state House.
In a statement, the NC Budget & Tax Center, a nonprofit organization that documents economic conditions, blasted the proposal, saying it was “rooted in magical thinking and cruel cuts that will leave North Carolina unprepared for recessions, federal cost shifts and climate disasters.”
Meanwhile, the budget bill sped through a series of committee hearings Tuesday and will be fast-tracked to the Senate floor. If it passes the Senate, the House will likely make changes.
The final budget will almost certainly be crafted in a joint committee during the coming months.
Then, that version will go to Gov. Josh Stein’s desk, who may opt to sign or veto it, sending it back to the legislature.
But the state doesn’t have that kind of money, Republican Sen. Ralph Hise, who represents nine counties on the state’s western border, told reporters during a press conference on Monday.
Instead, the working strategy is to load millions of dollars into the Hurricane Helene Disaster Recovery Fund, not to be spent now, but to be saved for future federal matching requirements.
The NC Senate’s budget proposal shifts $700 million from various state funds to the Helene Fund, but only reserves $25.5 million for specific purposes:
$10 million to the Governor’s Recovery Office for Western North Carolina
$5 million to the Division of Community Revitalization
$8 million to the UNC Board of Governors to improve emergency response in Western North Carolina schools
$2.5 million to the North Carolina community college system for enrollment loss
Hise said North Carolina is in a “good position” to meet matching requirements as it anticipates a variety of funds to come from the federal government.
The budget proposal also takes $634 million of underutilized transportation funds and reserves them for federal matching requirements for transportation infrastructure recovery.
It further divides $686 million in federal American Relief Act money between Helene-related clean water, drinking water and wastewater treatment system improvement needs.
Extensive damage to roads and property in the Chimney Rock Village area of Rutherford County in the aftermath of Tropical Storm Helene are seen in this aerial image on Nov. 10, 2024. Colby Rabon / Carolina Public Press
Finally, it directs state agencies administering certain grant programs to prioritize applicants from the most impacted counties.
Since Helene, the state has used a significant portion of its “Rainy Day Fund.” So, the budget replenishes it to pre-Helene levels, to the tune of $1.1 billion.
Democratic Senate Minority Leader Sydney Batch isn’t pleased with the lack of actual spending, calling the budget proposal “a blueprint for neglect and cowardice.”
“Instead of investing in the people who make this state work, Republicans are continuing to hoard taxpayer dollars in a Rainy Day Fund — undermining critical agencies and ducking their responsibility by kicking tough decisions over to the House of Representatives,” she said in a statement.
Tax ‘triggers’
If you don’t meet your goals, well, why not just lower the goalpost?
That’s what Senate Republicans chose to do in their budget proposal. Under current law, the state needs to meet specific revenue “triggers” in order to drop the income tax rate another half percent each fiscal year.
Based on February’s Consensus Revenue Forecast, produced by the Office of the State Budget and Management, North Carolina met the revenue threshold for the first year of the biennium, but missed it by less than $100 million the second year.
While North Carolina is growing, the state budget office forecast that the downward pressure of income and corporate tax rate cuts, as well as the unpredictability of inflation and tariffs, would outweigh any revenue increases in fiscal year 2026-27.
The current income tax rate is 4.25% and is scheduled to drop to 3.99% in 2026.
After meeting the first-year trigger, the state is free to further drop the rate another half percent to 3.49% in 2027. But current law would force a pause in 2028.
The Senate budget works around that obstacle by eliminating the trigger from 3.49% to 2.99%.
The budget proposal leaves the next trigger, from 2.99 to 2.49%, in place for 2029, and adds two quarter percent drops the two following years.
Heba Atwa, the director of legislative advocacy and campaigns for the NC Budget & Tax Center, spoke out against the proposed cuts in a Tuesday legislative committee.
She said rate reductions would cost $13 billion annually. Furthermore, Atwa argued that lawmakers weren’t adequately considering the potential loss of federal funds. Last year, North Carolina received federal funding in an amount equivalent to its entire state budget ($30.8 billion). The next two-year budget cyclemay be different.
“Y’all will be left holding the bag when North Carolinians come to you and say, ‘What happened to our services and our programs?’” Atwa said.
Berger isn’t convinced federal cuts will actually happen, but his caucus is monitoring things.
“I think we’ll be able to, if necessary, make adjustments, but it’s our belief that we have adequate reserves to address any scenario that is likely to occur,” said Berger, a Rockingham County Republican.
While the Senate’s proposed budget doesn’t account for potential federal funding cuts, it does take inspiration from Elon Musk’s cost-cutting agency: the Department of Government Efficiency. It dedicates $5 million so that State Auditor Dave Boliek could oversee a state version of DOGE, aptly named the Division of Accountability, Value and Efficiency (DAVE).
DAVE would determine whether state agencies and their vacant positions are necessary as well as how effectively they spend money.
Unlike its federal counterpart, the state auditor would not have the authority to eliminate programs or spending, but could offer recommendations to the General Assembly, Berger said.
www.thecentersquare.com – By Alan Wooten | The Center Square – (The Center Square – ) 2025-04-18 14:16:00
(The Center Square) – Planning and response to Hurricane Helene with early voting already underway has been deemed worthy of an award for the North Carolina State Board of Elections.
Fifty-three programs from 258 nominations earned the Exemplary Contingency Planning and Emergency Response Efforts award from the U.S. Election Assistance Commission. Additionally, election boards in the counties of Buncombe, Currituck, Durham and Wake won 2024 Clearinghouse Awards, and those in Durham, Rockingham and Union counties earned honorable mention.
Helene killed 107 and caused an estimated $60 billion damage.
The storm made landfall as a Category 4 hurricane in Dekle Beach, Fla., on Sept. 26. It dissipated over the mountains of the state and Tennessee, dropping more than 30 inches in some places and over 24 consistently across more.
Election Day was six weeks away. The disaster area declared included 25 counties and coordination with the state board; county boards; lawmen on the federal, state and local levels; the state National Guard; the U.S. Postal Service; and information technology professionals on multiple levels.
Voter turnout in the 25 counties was 74.9%, a tick higher than the state average of 72.6%.
“We are extremely proud of the efforts of our state’s election officials and our partners to pull off a successful election under the most trying of circumstances,” said Karen Brinson Bell, the state board’s executive director. “Hundreds of thousands of western North Carolinians were able to vote in the important 2024 election because of state board planning, along with the hard work and resiliency of county election officials and the invaluable assistance of our emergency management and law enforcement partners.”
The award is a different kind of light for the state board.
Between July 22 and Sept. 12, seven lawsuits were filed against the state board of Democrats Alan Hirsch, its chairman, Jeff Carmon and Siobhan Millen; and Republicans Stacy Eggers and Kevin Lewis; and Bell. More followed the election and are still unresolved along with the state Supreme Court race between Democrat Allison Riggs and Republican Jefferson Griffin.
SUMMARY: U.S. Sen. Chris Van Hollen met with Kilmar Abrego Garcia, a Maryland resident mistakenly deported to a mega-prison in El Salvador. Van Hollen, a Maryland Democrat, traveled to El Salvador to check on Abrego Garcia, who has been held for over a month at the Centro de Confinamiento del Terrorismo (CECOT). The Trump administration acknowledged the deportation error. Despite challenges in securing a meeting, Van Hollen met Abrego Garcia and shared an update with his wife. El Salvador’s President Nayib Bukele mocked the meeting, commenting that Abrego Garcia would remain in custody.
SUMMARY: In Disney’s “Magic of Storytelling” podcast, Thumper discovers a robin’s egg after a storm. He and his four sisters—Trixie, Tessy, Daisy, and Ria—worry about the egg being cold and try to keep it warm with leaves. As they debate the best approach, they decide to find the mama robin for help. Meanwhile, Thumper and Daisy attempt to cheer the egg by singing and dancing. Eventually, the sisters return with a nest just as the mama robin arrives. The egg hatches, bringing joy to the bunnies as they celebrate their teamwork and caring efforts.
Thumper the bunny is hopping along one day and finds a special egg! Soon, he and his family are set out on an adventure to find the egg’s Mama.
