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North Carolina is not currently bringing in enough revenue to sustain current levels of state services. The corporate income tax is scheduled to be eliminated by the year 2030. Huge corporations with multi-millions in profits will no longer pay state income tax in North Carolina. And it grows to a multi-billion dollar gap over the next several years. Last year's budget proposals from the House and the Senate
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was a disagreement between House and Senate leaders on tax policy. Basically, the House was concerned by the scale of revenue that would be lost, and the House was concerned that they wouldn't be able to fund these teacher raises that they had been promising. North Carolina is losing teachers to other states.
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In this most recent budget, we've seen an average of 8% raise for teachers. 8% sounds like a lot. Then you talk to teachers and organizations after having gone a year with no raises, that 8% doesn't go very far.
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So today we're welcoming Sally and Mariah with the North Carolina Budget and Tax Center. How are you guys today? Doing great. Doing good. Thanks for having us. Thank you. It's lovely for you guys to be here. I'm so honored that you guys are going to be our first interview of the new season. So that's very exciting to be able to explain these things to the younger people.
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And one of the first things that I wanted to explain is the North Carolina budget. Everything about it, like you need to assume that the person watching this knows absolutely nothing. Because I know that I, for my job, know a bit about it. But the everyday voter doesn't really know much about what goes on. So I wanted to start by explaining what has the conversation around the budget been this year specifically? Yeah.
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Yeah, so I think a lot of the conversation this year has just been the lack of a state budget that we've been dealing with. And I think there is a lot of conversation happening about how that's impacted different counties and different people and just a lot of conversation around community.
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you know, are lawmakers doing the job or not? Because having and passing a budget is one of their core functions. It's a major piece of legislation and it's arguably one of the most important pieces of legislation that they pass because it is funding for all of our priorities and all the services that we benefit from. So there's been, you know, a lot of discourse around the,
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you know, different ways that counties have been impacted, different ways that families have been impacted. Because at the same time that, you know, lawmakers have not passed a budget, families are getting hit hard by economic pressures and inflation every day.
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And so there are some key sort of policies that they can pass in the budget that would alleviate families' economic pressure during this time. And so there's been a lot of conversation around that. And it's my understanding, we have gone a few years without a new budget, correct?
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Yeah, so as Mariah said, so stepping back a second, last year in 2025, lawmakers missed the July 1st deadline to pass a budget for the new fiscal year. But North Carolina actually operates on a two-year budget. So in odd years, the state passes a budget that covers the next two fiscal years. And then in even years, they're supposed to come back and adjust the second year of that budget.
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So last year, 2025, odd year, they failed to pass that two-year plan, which meant we, by default, would just continue operating on the two-year spending plan that was passed all the way back in 2023. So that's why sometimes you'll hear people say it's been multiple years since the state had an updated spending plan in our state budget.
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Right. And a lot has changed in the past, you know, two to three years, especially for the pressures that people are and families are facing. So it's kind of been sort of a process to, you know, when families are experiencing their most like economic pressures, there's been a lot of, you know, discourse around, you know, lawmakers, you know, not being able to
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and not doing their job basically at a time when, you know, people are suffering because of it. And how often does that happen that we have to work with a previous budget because one didn't get passed by the deadline?
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It's been happening more frequently in recent years. So it used to be before about 2016, 2017, if North Carolina failed to pass a state budget, certain parts of the state government would essentially shut down. But now North Carolina no longer shuts down in the way that like we've had federal shutdowns before.
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Instead, if lawmakers fail to pass that budget, the new law says that by default, the spending from the previous year will just continue. But without any updates for new needs, higher costs like Mariah has been talking about, without any, you know, meaningful pay raises for teachers or state employees whose pay isn't keeping up over time,
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So that's why the lack of a state budget and the default to old spending levels has caused such hardship and chaos across much of the state. So I kind of wanted to get into the purpose of a state budget. Why do we even need to have a state budget in order to function?
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So the state budget, again, is our most important policy that state lawmakers pass. It funds all of our priorities and services that people rely on. So if you are going to state parks on the weekend, if you're taking advantage of state libraries, sending your kids to public school or just driving on state roads, you are benefiting from our state budget.
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So a lot of times when, you know, there is no state budget, some of these services and some of these programs can really suffer because of it. If you, you know, heard about like the DMV sort of.
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issues that, you know, were in place last year, there's been a lot of difficulty in getting, you know, people into those positions, which causes, you know, real significant delays for those who are seeking, for people who are seeking those services.
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Um, as last year, there were like hundreds or their backlogs that really, you know, cause people to have to take off work. And I was one of them. Um, so, and that's time that people can't budget for. They may not afford to. So a state budget really does impact people's everyday lives. So where does the money for the state budget come from?
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Yeah, so the general fund, which is kind of like the core part of our state budget that funds a lot of these core services like public education, child care, health care, 95% of the funding for that general fund budget comes from taxes, from state taxes. And about half of it comes from the income tax. So every time you earn wages and you pay income tax on those wages, that goes to our state general fund and helps pay for taxes.
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those things that Mariah was talking about from teacher pay to ensuring that we have healthy and safe environment. We have safe, well-maintained roads to travel on. We have fun recreational activities like state parks. And then in addition to income tax, the next largest part is sales tax. And then there are some other sources of state funding as well. But
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And I hope we can talk about this more because taxation has been like at the heart of the long budget impasse that we had at the heart of the disagreement between the House and Senate about the state budget for so long was about tax policy. But those tax choices fundamentally shape, you know, whether our state has the resources to fund the priorities that people have for living well in North Carolina and.
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And those tax choices determine, you know, who pays and how much and how much that tax code is equitable to people across different income levels. So how do we determine how much like that percentage that gets contributed to the budget?
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The percentage of tax dollars or. Yeah. So basically, when lawmakers are crafting a state budget, part of what they are deciding is how much funding to raise. You know, it's not just the weather. It doesn't happen as a natural act as a choice that's made in the policy process.
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But for many years, the state has actually been choosing to cut income taxes over time in a way that disproportionately benefits the very richest households in North Carolina and disproportionately harms those with lowest incomes. And so by deciding to...
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cut taxes in that way and change our tax code in that way, the state has been bringing in less revenue, less public dollars than it otherwise would. And that has meant less funding available for many priorities that people lift up year after year, truthfully, higher teacher pay, a more stable, well-funded child care system,
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investments in affordable housing, you know, the list goes on, the DMV investing list that Mariah was talking about, by deciding to not collect what is needed to fund, you know, regular people's priorities, the state is making a choice within our state budget.
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So starting with step one, how do we actually go about creating a state budget? Because, you know, people in their household, they have budgets to run their house and it goes through a process. So maybe, you know, you get your paycheck, you sit down, you kind of allocate based on your set budget, things like that. So what would step one be for the state?
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Yeah, so the way we typically break it down is it's like roughly eight steps in the way that BTC presents it in our budget primer, for example. And I might not go through them all eight in exactly that way. But roughly, it starts with state agencies. So things like the Department of Health and Human Services, the Department of Public Education, the Department of Public Education.
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Those state agencies create budget requests. They say, here are the needs that we're seeing in our area, and here's the funding that we would need to meet those needs. And they compile those requests, they send them to the governor's office, and then kind of the next step is the governor releases a recommended budget request.
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So a plan, a suggestion for here's what I've heard from agencies, here's what I'm seeing, here's a recommended spending plan for the state. But it is just a recommendation, you know, because it's the legislature's responsibility to enact a budget. So the next step is that the two chambers of the legislature, the North Carolina House and the North Carolina Senate,
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They each craft their own budget proposal, and they vote on that budget proposal. And they're two different spending plans. They won't be exactly the same across both chambers. After that point, it goes to a conference budget process. So members from both the House and the Senate come together and craft kind of a compromise proposal. Maybe it incorporates some elements from the Senate spending plan. Maybe it incorporates some elements from the House's spending plan.
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And then once they have that compromise conference budget, that needs to be voted on and approved by both the House and the Senate. If it's voted on and approved, which just happened in North Carolina last week, then it goes to the governor, who can either decide to sign it into law, to veto it, or to let it become law without a signature. So that's kind of high-level steps in the process.
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And are there any flaws in that system? Like, can you, is it like the most efficient? Or are there ways during this process that it gets to a point like, hey, we can't get anything done because of how the process it is.
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Yeah, so I think Sally just mentioned that, you know, that budget process is definitely the ideal budget process. You know, lawmakers take the time to really negotiate around the budget and come to the best conclusion for North Carolinians to meet all of our needs.
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But I think in recent years, that budget process has been strained and has definitely we've seen some flaws in it because a lot of the times we are now seeing that, you know, not all lawmakers have an equal authority.
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vote or vote in an equal voice in this budget process, a lot of the spending is often initially set by the NC Senate and NC House leaders. So they, you know, typically come together in recent years to pick an arbitrary spending number number based off of what
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they believe, you know, they want to spend. So a lot of the times they are not incorporating necessarily the recommendations from departments and recommendations from the governor and also recommendations from the people of North Carolina
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Oftentimes, you know, during this budget process, it is passed very quickly. As we've seen this year, it was passed within, it was released and passed within 48 hours. So lawmakers on day one announced and released their budget and then
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Within 24 hours, lawmakers had to vote up or down to vote whether they wanted to pass that budget. So there is not a lot of opportunity for discussion, even among lawmakers,
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to really, you know, advocate for the priorities that would benefit their constituencies and benefit the people that they represent. It is often a process that is ruled by, you know, one or two leaders in the country.
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The legislature, which doesn't give a lot of voice to the representatives that, you know, are we vote to represent us and to have a voice in that process to represent our needs and to pass, you know, spending priorities that actually match our communities rather than just an arbitrary number that they set.
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So to my understanding, we elect someone to the legislator to the legislator to be our voice for what we would like to see in the budget. But the budget is vast and has so many things in it. So when there is something that comes along that we might not necessarily agree with, how do we make our voice heard when things are happening so quickly? Because we're not.
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I feel like on one side, yes, you can get a general idea of what the people want. But on those specific things that people tend to disagree with, is there a process right now where it's like, oh, this is something that's going to be in the budget. This is how you voice your opinion about it. Yeah. I mean, so part of what Mariah is just describing here is the ways that the current process is making that really hard. Yeah.
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it is so tightly controlled by a very few legislative leaders who, again, first prioritize these tax cuts far into the future for wealthy households. And then with whatever revenue is left over, they establish this arbitrary number for what the state budget will spend that isn't really connected to the needs that people are lifting up in communities. And so it's, you know, not only are most lawmakers
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not meaningfully engaged during much of the process of crafting the budget. But constituents themselves aren't given an opportunity for things like public comment, for, you know, public hearings, for meaningful debate at the legislative house, at the North Carolina General Assembly, to lift up, you know,
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If they disagree with prioritizing tax cuts for the wealthy, there's not a really open forum to provide that commentary often at the General Assembly.
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There are ways to fix that process to make it easier for folks to engage. But there are still things people can do now. You know, you can reach out to your lawmaker and ask to have a conversation about your priorities for the state budget. Mariah, I don't know if you want to share about like some of the spaces North Carolina Budget and Tax Center has created to bring people in.
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Yeah, so the North Carolina Budget Tax Center, we have our People's Budget Coalition, which is really a space for us to come together and learn about, you know, how the state budget and how our tax policies are impacting us, as well as advocating together to, you know, get our voices heard and make those changes and let lawmakers know that.
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that, you know, we need them to pass a budget, we need them to pass tax policies that actually provide, you know, the funding that we need for our priorities. So yeah, our People's Budget Coalition is definitely a space where
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We try to bring as many folks in across the state. It could be organizations that we work with, community members, BCL, and the events across the state. That's really our space to really bring in as many people as possible to this work.
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because, again, this process isn't made for people to have a voice. So this is really our space that we are giving to folks and that we are trying to, you know, have for folks to, you know, be able to have a voice and to be able to know what's going on with the state budget and know what's going on with their tax policies and how, you know, they are and aren't benefiting from them.
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So yeah, we have our People's Budget Coalition that meets monthly and you can always, you know, contact us on our website to get more involved with our People's Budget Coalition as well as sign up for our real-time budget updates that, you know, Sally, you do in terms of, you know, staying more informed during the legislative session on what's happening with the budget.
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That's great. So before we get into what is in this new budget, North Carolina has been growing tremendously in the past few years. So do we have enough revenue enough in the budget to actually sustain our growth? Meaning, are we outgrowing ourselves or are we playing catch up or are we right where we need to be?
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Yeah. So North Carolina is not currently bringing in enough revenue to sustain current levels of state services. And I'm so glad you mentioned that because that is exactly the right question to be asking of a budget process. You know, we we shouldn't just be operating year to year, month to month. We have the tools.
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to project out several years into the future. We can anticipate where costs will be going up. We can make an educated guess. We can anticipate how population will be changing. Excuse me. And we've actually seen a state agency, the Office of State Budget and Management, they've done a multi-year projection of if the state follows through on these scheduled tax cuts,
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here's the gap in revenue that we will have. And it grows to a multi-billion dollar gap over the next several years where the state is not bringing in enough revenue to sustain the level of services that we are providing now in 2026.
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So that either means you need to adjust on the tax policy side and make different choices when it comes to how we raise public dollars in North Carolina. Or you have to adjust on the spending side and decide, you know, we are already severely underfunding critical areas of state government. There's not much left to deplete at this point. So that's kind of the situation that we find ourselves in. So you stated that each...
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kind of the house the senate the governor proposes their own budget kind of like an outline of sorts so how drastic or different are these budgets and has this become a big enough issue as to year over year are the differences getting bigger are there those big disagreements or are we usually on the same cage about things
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So we do tend to see in recent years certain patterns across those three different budget proposals. In recent years, including this year, the governor's recommended budget recommended pausing or freezing.
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Scheduled income tax cuts. This is both the personal income tax, but also the corporate income tax. And I just want to mention that briefly because a lot of people don't know that in North Carolina, the corporate income tax is scheduled to be eliminated by the year 2030. So after that year, huge corporations with multi-millions in profits.
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will no longer pay state income tax in North Carolina. And most of the benefits of that go to out-of-state residents, to shareholders, to corporate executives, not to folks in North Carolina. So in recent budget proposals, the governor has called for a stop to preserve state revenue to meet these funding priorities that we've seen from community.
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Another pattern we've seen, we saw in last year's budget proposals from the House and the Senate was a disagreement between House and Senate leaders on tax policy. I know we keep coming back to this because it's at the heart of the stalemate that we saw. So we saw in the House budget proposal that the House wanted to slow down.
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cuts to the personal income tax. And the Senate wanted to charge kind of full steam ahead. Basically, the House was concerned by the scale of revenue that would be lost, and the House was concerned that they wouldn't be able to fund these teacher raises that they had been promising constituents.
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And again, the Senate said, no, no, no, everything's fine. We can continue with the current schedule. No problems here. That is what led us in large part to not have a state budget for this entire fiscal year was that tax policy disagreement between the House and the Senate. And so we can maybe talk more about what they ultimately decided. But that tax policy has been a crucial difference across budget proposals in recent years.
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And has that also been seen across party lines as well? And I bring that up because a lot of times we see this fight between both of the sides. And is that actually real or is that just something that they put out to get their cause more attention, you know?
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Yeah, so the House and the Senate right now are both controlled by Republican leadership. So this was a disagreement between Republican leaders about the scheduled tax cuts, at least in these most recent budget proposals that we saw. Okay, so and then approaching this new budget, how do we come to a compromise? What have those compromises been?
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Yeah. So in this new budget, they came to or Senate and House leadership came to a decision and a compromise to ultimately slow down the tax cuts, but still continue them. So we are still, you know, losing revenue year over year because of the tax cuts that have been put into place. And these tax cuts are automatic.
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So there is no once this budget is put into place, there is no way to stop them because lawmakers have set them to automatically continue year after year through at least 2033, I believe. And then by 2034 and after, there may be certain changes.
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triggers that the state revenue will have to hit in order to continue those tax cuts. But ultimately, you know, they're continuing to, you know, slowly cut down our state revenue by cutting our personal income tax cuts that we have to pay.
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Yeah, so they basically they made no changes to the corporate income tax that is still going to be eliminated. But they did tweak the plan for the personal income tax rate cuts. But it still takes us to the same level.
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Very low rate eventually, just on a slightly slower timeline. And they do make these changes to tax triggers, which we can get into if you'd like. It's a little bit wonky. But then the other part of their agreement is they also, before passing the budget...
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They agreed to put two constitutional amendments on the ballot in November that voters will vote on directly. And they're both really concerning. One is an amendment around the personal income tax rate that says in the North Carolina Constitution, the personal income tax rate will be capped.
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at 3.5%, which is lower than our current rate. So we're already in this context where we're not raising enough revenue to fund current levels of services, let alone the more substantial investments people want to see in teacher pay and housing and bringing down the cost of living. And now we're saying in our constitution, if voters approve it, we're going to lock in those really low tax rates for wealthy families and kind of
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on the front end hamstring our ability to fund basic services and a true well-being budget in North Carolina. So that's one amendment. We could talk, there's a lot more to say, we could talk more about it, but the second amendment is related to property taxes. So, um,
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Obviously, some people are really struggling with property taxes at the moment, and there are ways to address that problem and provide relief where it's needed. But this constitutional amendment wouldn't do that. It doesn't cap individual people's property tax bill.
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it just caps the total property taxes that individual counties can raise in their communities. And for counties, property tax is a core source of funding for things like public education. So instead of really addressing the issues with housing affordability and rising costs that people are seeing,
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This property tax constitutional amendment would just lock in an inability for counties to fund their local needs at the same time that the state is not funding what they ought to be funding in communities. So it's this kind of double whammy that is not going to lower costs. It's not going to improve affordability.
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It is going to make life harder for North Carolinian families and communities at large. But those two constitutional amendments were part of this deal that House and Senate leaders came to in order to pass the budget in the first place. So I'm hearing a lot about cuts. So what are the other revenue sources that are out there and that people are currently looking at?
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Yeah, great question. So because we're going to see these large revenue losses from the personal and corporate income taxes, we did see in this budget that just passed, the states start to look towards other sources of revenue that aren't going to be capable of making up the difference. But as one example, we saw that they increased the income.
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tax on sports betting operators. So as sports betting has become more allowed in North Carolina, that's currently a really small source of revenue. And increasing that rate, it's not going to bring in nearly as much as what we're going to lose.
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to tax cuts for corporations and the wealthy. They've also looked at closing or in the state budget, they did close one tax subsidy that data centers get, but they didn't address a different tax subsidy that data centers get that actually loses a lot more revenue.
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So again, you start to see them looking for these other ways to make up the lost revenue, acknowledging in a way that the state is not on a sustainable path, but the alternatives that they're looking to don't raise nearly enough to make up the difference and in some ways are more regressive. They hit lower income households harder instead of being willing to ask the rich and corporations to pay what they owe in their fair share.
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It's very interesting. So moving away from taxes for a second, it seems like North Carolina is losing teachers to other states. And that has been an issue for as long as I've been alive. So has that been addressed in the budget for educators? And then also what has the pay been for state workers?
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Yeah, so I think in this most recent budget, we've seen, you know, an average of 8% raise for teachers as well as raises for, you know, public workers and state workers.
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But the thing about the 8% is that it's an average. So we work with a lot of education partners and we've done the analysis ourselves is that when you actually take a deeper dive into, you know, the races that teachers and state employees are getting, newer teachers are actually, you know, benefiting more from races and getting more in races than veteran teachers. And my mom's a veteran teacher. She, you know...
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is, you know, someone who's been working in the state for a really long time educating students. And so a lot of, you know, what we've seen with the raises is that while they may incentivize newer teachers to stay in the state for a little bit longer, there's still not a big enough incentive to
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for teachers to stay in the state to teach for longer than a few years, because they're going to be, their raises will be stagnant for, you know, years 15 through 24, I believe. And that is a long time to not receive a raise at all.
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So, you know, teachers may still be looking for other work or looking to, you know, work in other states and nearby counties if you're on the border, or just completely turning away from public education, which then, you know, reduces that workforce and creates a bigger pressure on our public education system
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to serve, you know, students with less resources, those resources being our teachers. And we also saw bigger raises. I believe it's almost 10 percent for, you know, state employees and maybe almost 20 percent for, you know, our state prison workers, which, you know,
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Everyone deserves raises, but everyone deserves meaningful raises that actually keep up with inflation and that actually keeps up with the tradeoffs and health care costs that, you know, lawmakers have also put into place.
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Yeah, and just to add on to that, as you're saying, the context for these percentages is so important because you hear 8% average raise for teachers and think, okay, 8% sounds like a lot. Then you talk to teachers and organizations who represent them, and you understand that.
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after having gone a year with no raises and in the context of inflation, that 8% doesn't go very far. And the state is putting us on a trajectory where that type of pay won't be able to be sustained over time. And then likewise, I think most state employees, you know, in certain sectors, they got a higher percentage raise, but I think most got just 3%, which is less than the rate of inflation and comes again after a year of no raise, so.
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at all. So and you know, you'll, you'll hear that articulated by the organization, the association that represents the interests of state employees. That's why it's so important to put those numbers in context and understand what they actually mean for people's ability to afford to live and work in North Carolina.
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Mm hmm. OK. So are there any big wins that you have been noticing in this budget? Not just a win for the House or one for the Senate, one for the Democrats, one for the Republicans. Are there any is there anything in the budget where, OK, this is actually going to benefit North Carolina long term?
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Yeah, we were just talking about this a little bit earlier today, actually. Some of, did you want to start? No, you go. There are certainly places where it feels like positive steps were made. For a long time, these tax cuts have been on autopilot. And this last year was the first year where we heard the House articulating concerns about what is our long-term plan.
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ability to fund these things. We've told people that we want to fund for them. So although it is still a very disappointing budget and does not put North Carolina on a sustainable path, does not fund the needs that people have asked for, it does slow down that scale of lost public dollars by slowing down the personal income tax rate cuts.
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There are a few other places as well. There's been an investment made in child care subsidies to establish something called a floor that basically the impact is that it will help stabilize child care centers across North Carolina. It'll make it so that.
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those centers are receiving funding that is closer to the real cost of providing child care, which is really expensive. You have to have, you know, these really low teacher to student ratios for infants, basically. So it's an expensive thing to do. And by establishing establishing this floor, it makes the child care industry more sustainable over time.
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So that's one example. There was also we're still sifting through all the details, but there's some funding restored to the Healthy Opportunities Pilot Program, which is what it sounds like. It's a form of, you know, health, providing health, healthier outcomes and health health access in North Carolina and.
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Yeah, and we've also seen some more funding for a Haleen recovery, which has especially been important. But I think, you know, while all of these are positive steps, as Sally said, with the continued tax cuts, there's really a question of whether lawmakers will be able to sustain these positive steps in the future.
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because of the we're collecting less and less revenue so while we are very you know excited to see these steps there is also and some slower tax cuts there's also the need to really you know dig deeper into you know looking at the revenue needs in our state and looking at you know
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You know, really providing the funding for these programs so that they can, you know, benefit North Carolinians across the state year over year instead of just, you know, relying on the state every couple of years to figure out, you know, do we have the funding for this or not? So, yeah.
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And again, that's why those constitutional amendments are so concerning, because they would block the ability to make different choices in the future. You know, at like, we've seen the ways that this budget doesn't do what it could have done.
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And people are increasingly experiencing that in their day-to-day lives. Like there are some people listening who they don't need Sally and Mariah to tell them. Right. That their brain has not kept up over time or they don't need us to tell them that the cost of housing and child care is becoming unsustainable. They're experiencing it. And as people connect the dots to tax policy, it becomes possible to make different choices in the future. But it becomes not possible to do that if we lock in.
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these bad tax choices in our state constitution. And one thing that I wanted to bring up is the conversations locally with the local officials. What I've heard sometimes is like, hey, we're just waiting for Raleigh to make a decision. So how does that kind of flow from how the federal government affects the state and then the state affects what happens locally?
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Yeah, I think one example of that when talking about the federal, state, and local connections is with a program called SNAP, which is the Supplemental Nutrition Assistance Program, otherwise known as Food Stamps or FNS in our state.
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So there's been federal policy changes that were passed last year that really changed the funding structure for that program. That really helps people afford groceries and to afford to put food on the table. It's a supplement, you know, that people can use in the grocery store to get food to their families and their kids. Yeah.
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But by the federal government changing the funding structure, they actually, you know, shifted more of the cost for that program on to the states. And because of how the SNAP program is administered in North Carolina,
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It actually is run by counties. So a lot of the funding, even though it was, you know, mainly resourced by the federal government before, now, you know, our state and counties will have to pay a bigger share to not only, you know, administer the program, but also to actually pay for the benefits of the state.
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that people receive in our state. So a lot of that, a lot of those changes shifted costs to the state. But what we've seen in this most recent budget is that, you know, a lot of
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The tax policies and a lot of the funding that our state provided for SNAP, they did provide a little bit, but not nearly enough to fully cover the cost of four counties to administer SNAP and continue to help people get and afford groceries. Yeah.
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Um, so with the SNAP program, um, a lot of the pressures that, you know, came down from the federal to the state is now going down from the state to the local level. Um, because counties, again, are already facing increased pressures, um,
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for like inflation. And I think a lot of people don't understand that, or they may not, you know, realize is that in the same way that people's pockets and budgets are getting hit hard by inflation. So is, you know, everything that the government does.
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So the cost to, you know, do what the county does to pay for things that, you know, we need in our counties, that has only increased. And they, counties cannot bear that burden of actually paying for the administration of SNAP. There's really only one entity that could do that, and that's the state.
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So I think in that way, there's been a lot of, you know, continued conversation and continued negotiation between who really pays for this program. Because, again, if, you know, counties aren't able to pay for this.
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this program, then that means ultimately people will lose out on their SNAP and lose access to their SNAP benefits and will no longer be able to afford groceries in a time that, you know, people are experiencing higher costs for everything. Hmm.
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Alright, so now that the budget is here, I'm kind of curious, what do the legislators do now that the budget has been passed? Do they, like how much time do they put into this? Is there going to be a next phase for the people who don't track politics nearly as much? What do they start working on now if it isn't the state budget or are they still keeping track of that over the years, you know?
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Yeah. So right now, again, it's in the governor's court to decide whether to sign the budget into law to veto or let it become signature without a veto. If it does become law, you know, in North Carolina, largely the short session will wrap up, which is the session that happens in even years. But then the long session, which happens every odd year, starts up again in January 2027. So.
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That's why even if we're not in a long session or one of those years where we're making a two-year budget, it's almost a year-round process. And there's always an opportunity to be engaging with lawmakers, to be lifting up needs, because before we know it, they'll be back in Raleigh for 2027 and doing the whole process all over again. Yeah.
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So what are some actionable steps that my audience can take, whether that's something that they can keep track of or get a part of, just something that's very easy, not too overwhelming to still get involved in this process without having to track everything that happened. I know you mentioned the programs that happen, but when I go home today, what are some things that I can look out for?
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Yeah, I would recommend starting with our website, probably ncbudget.org. There you'll find all the blogs that we've posted about the budget process this year, as well as our initial analysis of the finalized budget. You'll also find, I think, at...
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ncbudget.org slash news, that's where you'll see those real-time updates that we post when some new development happens in the budget process because it can be really hard to know. There's like long periods of time with nothing happening as we've seen this year. And then suddenly a lot will happen very quickly. And so if you go to that page, ncbudget.org slash news, you'll see the place to subscribe to receive those real-time updates. And you'll see examples of the types of updates we've sent in the past that,
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um and on our website there's an action page so if you're like i've heard something today that really fired me up i want to take action you can go to that action page it's really easy to find and you'll see um what you can do whether it's contacting a lawmaker whether it's joining the people's budget coalition whether it's uh distributing yard signs or flyers in your community um there's going to be
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a lot of work to do in the coming months. So we really encourage folks to stay connected and we would love to see more folks engage with our state budget and state tax policy. Yeah. Well, thank you so much for joining me today. Thank you. Thank you for having us.
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North Carolina is not currently bringing in enough revenue to sustain current levels of state services. The corporate income tax is scheduled to be eliminated by the year 2030. Huge corporations with multi-millions in profits will no longer pay state income tax in North Carolina. And it grows to a multi-billion dollar gap over the next several years. Last year's budget proposals from the House and the Senate
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was a disagreement between House and Senate leaders on tax policy. Basically, the House was concerned by the scale of revenue that would be lost, and the House was concerned that they wouldn't be able to fund these teacher raises that they had been promising. North Carolina is losing teachers to other states.
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In this most recent budget, we've seen an average of 8% raise for teachers. 8% sounds like a lot. Then you talk to teachers and organizations after having gone a year with no raises, that 8% doesn't go very far.
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So today we're welcoming Sally and Mariah with the North Carolina Budget and Tax Center. How are you guys today? Doing great. Doing good. Thanks for having us. Thank you. It's lovely for you guys to be here. I'm so honored that you guys are going to be our first interview of the new season. So that's very exciting to be able to explain these things to the younger people.
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And one of the first things that I wanted to explain is the North Carolina budget. Everything about it, like you need to assume that the person watching this knows absolutely nothing. Because I know that I, for my job, know a bit about it. But the everyday voter doesn't really know much about what goes on. So I wanted to start by explaining what has the conversation around the budget been this year specifically? Yeah.
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Yeah, so I think a lot of the conversation this year has just been the lack of a state budget that we've been dealing with. And I think there is a lot of conversation happening about how that's impacted different counties and different people and just a lot of conversation around community.
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you know, are lawmakers doing the job or not? Because having and passing a budget is one of their core functions. It's a major piece of legislation and it's arguably one of the most important pieces of legislation that they pass because it is funding for all of our priorities and all the services that we benefit from. So there's been, you know, a lot of discourse around the,
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you know, different ways that counties have been impacted, different ways that families have been impacted. Because at the same time that, you know, lawmakers have not passed a budget, families are getting hit hard by economic pressures and inflation every day.
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And so there are some key sort of policies that they can pass in the budget that would alleviate families' economic pressure during this time. And so there's been a lot of conversation around that. And it's my understanding, we have gone a few years without a new budget, correct?
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Yeah, so as Mariah said, so stepping back a second, last year in 2025, lawmakers missed the July 1st deadline to pass a budget for the new fiscal year. But North Carolina actually operates on a two-year budget. So in odd years, the state passes a budget that covers the next two fiscal years. And then in even years, they're supposed to come back and adjust the second year of that budget.
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So last year, 2025, odd year, they failed to pass that two-year plan, which meant we, by default, would just continue operating on the two-year spending plan that was passed all the way back in 2023. So that's why sometimes you'll hear people say it's been multiple years since the state had an updated spending plan in our state budget.
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Right. And a lot has changed in the past, you know, two to three years, especially for the pressures that people are and families are facing. So it's kind of been sort of a process to, you know, when families are experiencing their most like economic pressures, there's been a lot of, you know, discourse around, you know, lawmakers, you know, not being able to
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and not doing their job basically at a time when, you know, people are suffering because of it. And how often does that happen that we have to work with a previous budget because one didn't get passed by the deadline?
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It's been happening more frequently in recent years. So it used to be before about 2016, 2017, if North Carolina failed to pass a state budget, certain parts of the state government would essentially shut down. But now North Carolina no longer shuts down in the way that like we've had federal shutdowns before.
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Instead, if lawmakers fail to pass that budget, the new law says that by default, the spending from the previous year will just continue. But without any updates for new needs, higher costs like Mariah has been talking about, without any, you know, meaningful pay raises for teachers or state employees whose pay isn't keeping up over time,
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So that's why the lack of a state budget and the default to old spending levels has caused such hardship and chaos across much of the state. So I kind of wanted to get into the purpose of a state budget. Why do we even need to have a state budget in order to function?
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So the state budget, again, is our most important policy that state lawmakers pass. It funds all of our priorities and services that people rely on. So if you are going to state parks on the weekend, if you're taking advantage of state libraries, sending your kids to public school or just driving on state roads, you are benefiting from our state budget.
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So a lot of times when, you know, there is no state budget, some of these services and some of these programs can really suffer because of it. If you, you know, heard about like the DMV sort of.
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issues that, you know, were in place last year, there's been a lot of difficulty in getting, you know, people into those positions, which causes, you know, real significant delays for those who are seeking, for people who are seeking those services.
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Um, as last year, there were like hundreds or their backlogs that really, you know, cause people to have to take off work. And I was one of them. Um, so, and that's time that people can't budget for. They may not afford to. So a state budget really does impact people's everyday lives. So where does the money for the state budget come from?
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Yeah, so the general fund, which is kind of like the core part of our state budget that funds a lot of these core services like public education, child care, health care, 95% of the funding for that general fund budget comes from taxes, from state taxes. And about half of it comes from the income tax. So every time you earn wages and you pay income tax on those wages, that goes to our state general fund and helps pay for taxes.
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those things that Mariah was talking about from teacher pay to ensuring that we have healthy and safe environment. We have safe, well-maintained roads to travel on. We have fun recreational activities like state parks. And then in addition to income tax, the next largest part is sales tax. And then there are some other sources of state funding as well. But
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And I hope we can talk about this more because taxation has been like at the heart of the long budget impasse that we had at the heart of the disagreement between the House and Senate about the state budget for so long was about tax policy. But those tax choices fundamentally shape, you know, whether our state has the resources to fund the priorities that people have for living well in North Carolina and.
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And those tax choices determine, you know, who pays and how much and how much that tax code is equitable to people across different income levels. So how do we determine how much like that percentage that gets contributed to the budget?
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The percentage of tax dollars or. Yeah. So basically, when lawmakers are crafting a state budget, part of what they are deciding is how much funding to raise. You know, it's not just the weather. It doesn't happen as a natural act as a choice that's made in the policy process.
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But for many years, the state has actually been choosing to cut income taxes over time in a way that disproportionately benefits the very richest households in North Carolina and disproportionately harms those with lowest incomes. And so by deciding to...
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cut taxes in that way and change our tax code in that way, the state has been bringing in less revenue, less public dollars than it otherwise would. And that has meant less funding available for many priorities that people lift up year after year, truthfully, higher teacher pay, a more stable, well-funded child care system,
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investments in affordable housing, you know, the list goes on, the DMV investing list that Mariah was talking about, by deciding to not collect what is needed to fund, you know, regular people's priorities, the state is making a choice within our state budget.
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So starting with step one, how do we actually go about creating a state budget? Because, you know, people in their household, they have budgets to run their house and it goes through a process. So maybe, you know, you get your paycheck, you sit down, you kind of allocate based on your set budget, things like that. So what would step one be for the state?
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Yeah, so the way we typically break it down is it's like roughly eight steps in the way that BTC presents it in our budget primer, for example. And I might not go through them all eight in exactly that way. But roughly, it starts with state agencies. So things like the Department of Health and Human Services, the Department of Public Education, the Department of Public Education.
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Those state agencies create budget requests. They say, here are the needs that we're seeing in our area, and here's the funding that we would need to meet those needs. And they compile those requests, they send them to the governor's office, and then kind of the next step is the governor releases a recommended budget request.
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So a plan, a suggestion for here's what I've heard from agencies, here's what I'm seeing, here's a recommended spending plan for the state. But it is just a recommendation, you know, because it's the legislature's responsibility to enact a budget. So the next step is that the two chambers of the legislature, the North Carolina House and the North Carolina Senate,
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They each craft their own budget proposal, and they vote on that budget proposal. And they're two different spending plans. They won't be exactly the same across both chambers. After that point, it goes to a conference budget process. So members from both the House and the Senate come together and craft kind of a compromise proposal. Maybe it incorporates some elements from the Senate spending plan. Maybe it incorporates some elements from the House's spending plan.
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And then once they have that compromise conference budget, that needs to be voted on and approved by both the House and the Senate. If it's voted on and approved, which just happened in North Carolina last week, then it goes to the governor, who can either decide to sign it into law, to veto it, or to let it become law without a signature. So that's kind of high-level steps in the process.
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And are there any flaws in that system? Like, can you, is it like the most efficient? Or are there ways during this process that it gets to a point like, hey, we can't get anything done because of how the process it is.
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Yeah, so I think Sally just mentioned that, you know, that budget process is definitely the ideal budget process. You know, lawmakers take the time to really negotiate around the budget and come to the best conclusion for North Carolinians to meet all of our needs.
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But I think in recent years, that budget process has been strained and has definitely we've seen some flaws in it because a lot of the times we are now seeing that, you know, not all lawmakers have an equal authority.
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vote or vote in an equal voice in this budget process, a lot of the spending is often initially set by the NC Senate and NC House leaders. So they, you know, typically come together in recent years to pick an arbitrary spending number number based off of what
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they believe, you know, they want to spend. So a lot of the times they are not incorporating necessarily the recommendations from departments and recommendations from the governor and also recommendations from the people of North Carolina
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Oftentimes, you know, during this budget process, it is passed very quickly. As we've seen this year, it was passed within, it was released and passed within 48 hours. So lawmakers on day one announced and released their budget and then
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Within 24 hours, lawmakers had to vote up or down to vote whether they wanted to pass that budget. So there is not a lot of opportunity for discussion, even among lawmakers,
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to really, you know, advocate for the priorities that would benefit their constituencies and benefit the people that they represent. It is often a process that is ruled by, you know, one or two leaders in the country.
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The legislature, which doesn't give a lot of voice to the representatives that, you know, are we vote to represent us and to have a voice in that process to represent our needs and to pass, you know, spending priorities that actually match our communities rather than just an arbitrary number that they set.
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So to my understanding, we elect someone to the legislator to the legislator to be our voice for what we would like to see in the budget. But the budget is vast and has so many things in it. So when there is something that comes along that we might not necessarily agree with, how do we make our voice heard when things are happening so quickly? Because we're not.
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I feel like on one side, yes, you can get a general idea of what the people want. But on those specific things that people tend to disagree with, is there a process right now where it's like, oh, this is something that's going to be in the budget. This is how you voice your opinion about it. Yeah. I mean, so part of what Mariah is just describing here is the ways that the current process is making that really hard. Yeah.
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it is so tightly controlled by a very few legislative leaders who, again, first prioritize these tax cuts far into the future for wealthy households. And then with whatever revenue is left over, they establish this arbitrary number for what the state budget will spend that isn't really connected to the needs that people are lifting up in communities. And so it's, you know, not only are most lawmakers
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not meaningfully engaged during much of the process of crafting the budget. But constituents themselves aren't given an opportunity for things like public comment, for, you know, public hearings, for meaningful debate at the legislative house, at the North Carolina General Assembly, to lift up, you know,
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If they disagree with prioritizing tax cuts for the wealthy, there's not a really open forum to provide that commentary often at the General Assembly.
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There are ways to fix that process to make it easier for folks to engage. But there are still things people can do now. You know, you can reach out to your lawmaker and ask to have a conversation about your priorities for the state budget. Mariah, I don't know if you want to share about like some of the spaces North Carolina Budget and Tax Center has created to bring people in.
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Yeah, so the North Carolina Budget Tax Center, we have our People's Budget Coalition, which is really a space for us to come together and learn about, you know, how the state budget and how our tax policies are impacting us, as well as advocating together to, you know, get our voices heard and make those changes and let lawmakers know that.
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that, you know, we need them to pass a budget, we need them to pass tax policies that actually provide, you know, the funding that we need for our priorities. So yeah, our People's Budget Coalition is definitely a space where
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We try to bring as many folks in across the state. It could be organizations that we work with, community members, BCL, and the events across the state. That's really our space to really bring in as many people as possible to this work.
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because, again, this process isn't made for people to have a voice. So this is really our space that we are giving to folks and that we are trying to, you know, have for folks to, you know, be able to have a voice and to be able to know what's going on with the state budget and know what's going on with their tax policies and how, you know, they are and aren't benefiting from them.
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So yeah, we have our People's Budget Coalition that meets monthly and you can always, you know, contact us on our website to get more involved with our People's Budget Coalition as well as sign up for our real-time budget updates that, you know, Sally, you do in terms of, you know, staying more informed during the legislative session on what's happening with the budget.
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That's great. So before we get into what is in this new budget, North Carolina has been growing tremendously in the past few years. So do we have enough revenue enough in the budget to actually sustain our growth? Meaning, are we outgrowing ourselves or are we playing catch up or are we right where we need to be?
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Yeah. So North Carolina is not currently bringing in enough revenue to sustain current levels of state services. And I'm so glad you mentioned that because that is exactly the right question to be asking of a budget process. You know, we we shouldn't just be operating year to year, month to month. We have the tools.
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to project out several years into the future. We can anticipate where costs will be going up. We can make an educated guess. We can anticipate how population will be changing. Excuse me. And we've actually seen a state agency, the Office of State Budget and Management, they've done a multi-year projection of if the state follows through on these scheduled tax cuts,
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here's the gap in revenue that we will have. And it grows to a multi-billion dollar gap over the next several years where the state is not bringing in enough revenue to sustain the level of services that we are providing now in 2026.
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So that either means you need to adjust on the tax policy side and make different choices when it comes to how we raise public dollars in North Carolina. Or you have to adjust on the spending side and decide, you know, we are already severely underfunding critical areas of state government. There's not much left to deplete at this point. So that's kind of the situation that we find ourselves in. So you stated that each...
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kind of the house the senate the governor proposes their own budget kind of like an outline of sorts so how drastic or different are these budgets and has this become a big enough issue as to year over year are the differences getting bigger are there those big disagreements or are we usually on the same cage about things
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So we do tend to see in recent years certain patterns across those three different budget proposals. In recent years, including this year, the governor's recommended budget recommended pausing or freezing.
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Scheduled income tax cuts. This is both the personal income tax, but also the corporate income tax. And I just want to mention that briefly because a lot of people don't know that in North Carolina, the corporate income tax is scheduled to be eliminated by the year 2030. So after that year, huge corporations with multi-millions in profits.
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will no longer pay state income tax in North Carolina. And most of the benefits of that go to out-of-state residents, to shareholders, to corporate executives, not to folks in North Carolina. So in recent budget proposals, the governor has called for a stop to preserve state revenue to meet these funding priorities that we've seen from community.
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Another pattern we've seen, we saw in last year's budget proposals from the House and the Senate was a disagreement between House and Senate leaders on tax policy. I know we keep coming back to this because it's at the heart of the stalemate that we saw. So we saw in the House budget proposal that the House wanted to slow down.
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cuts to the personal income tax. And the Senate wanted to charge kind of full steam ahead. Basically, the House was concerned by the scale of revenue that would be lost, and the House was concerned that they wouldn't be able to fund these teacher raises that they had been promising constituents.
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And again, the Senate said, no, no, no, everything's fine. We can continue with the current schedule. No problems here. That is what led us in large part to not have a state budget for this entire fiscal year was that tax policy disagreement between the House and the Senate. And so we can maybe talk more about what they ultimately decided. But that tax policy has been a crucial difference across budget proposals in recent years.
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And has that also been seen across party lines as well? And I bring that up because a lot of times we see this fight between both of the sides. And is that actually real or is that just something that they put out to get their cause more attention, you know?
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Yeah, so the House and the Senate right now are both controlled by Republican leadership. So this was a disagreement between Republican leaders about the scheduled tax cuts, at least in these most recent budget proposals that we saw. Okay, so and then approaching this new budget, how do we come to a compromise? What have those compromises been?
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Yeah. So in this new budget, they came to or Senate and House leadership came to a decision and a compromise to ultimately slow down the tax cuts, but still continue them. So we are still, you know, losing revenue year over year because of the tax cuts that have been put into place. And these tax cuts are automatic.
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So there is no once this budget is put into place, there is no way to stop them because lawmakers have set them to automatically continue year after year through at least 2033, I believe. And then by 2034 and after, there may be certain changes.
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triggers that the state revenue will have to hit in order to continue those tax cuts. But ultimately, you know, they're continuing to, you know, slowly cut down our state revenue by cutting our personal income tax cuts that we have to pay.
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Yeah, so they basically they made no changes to the corporate income tax that is still going to be eliminated. But they did tweak the plan for the personal income tax rate cuts. But it still takes us to the same level.
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Very low rate eventually, just on a slightly slower timeline. And they do make these changes to tax triggers, which we can get into if you'd like. It's a little bit wonky. But then the other part of their agreement is they also, before passing the budget...
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They agreed to put two constitutional amendments on the ballot in November that voters will vote on directly. And they're both really concerning. One is an amendment around the personal income tax rate that says in the North Carolina Constitution, the personal income tax rate will be capped.
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at 3.5%, which is lower than our current rate. So we're already in this context where we're not raising enough revenue to fund current levels of services, let alone the more substantial investments people want to see in teacher pay and housing and bringing down the cost of living. And now we're saying in our constitution, if voters approve it, we're going to lock in those really low tax rates for wealthy families and kind of
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on the front end hamstring our ability to fund basic services and a true well-being budget in North Carolina. So that's one amendment. We could talk, there's a lot more to say, we could talk more about it, but the second amendment is related to property taxes. So, um,
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Obviously, some people are really struggling with property taxes at the moment, and there are ways to address that problem and provide relief where it's needed. But this constitutional amendment wouldn't do that. It doesn't cap individual people's property tax bill.
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it just caps the total property taxes that individual counties can raise in their communities. And for counties, property tax is a core source of funding for things like public education. So instead of really addressing the issues with housing affordability and rising costs that people are seeing,
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This property tax constitutional amendment would just lock in an inability for counties to fund their local needs at the same time that the state is not funding what they ought to be funding in communities. So it's this kind of double whammy that is not going to lower costs. It's not going to improve affordability.
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It is going to make life harder for North Carolinian families and communities at large. But those two constitutional amendments were part of this deal that House and Senate leaders came to in order to pass the budget in the first place. So I'm hearing a lot about cuts. So what are the other revenue sources that are out there and that people are currently looking at?
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Yeah, great question. So because we're going to see these large revenue losses from the personal and corporate income taxes, we did see in this budget that just passed, the states start to look towards other sources of revenue that aren't going to be capable of making up the difference. But as one example, we saw that they increased the income.
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tax on sports betting operators. So as sports betting has become more allowed in North Carolina, that's currently a really small source of revenue. And increasing that rate, it's not going to bring in nearly as much as what we're going to lose.
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to tax cuts for corporations and the wealthy. They've also looked at closing or in the state budget, they did close one tax subsidy that data centers get, but they didn't address a different tax subsidy that data centers get that actually loses a lot more revenue.
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So again, you start to see them looking for these other ways to make up the lost revenue, acknowledging in a way that the state is not on a sustainable path, but the alternatives that they're looking to don't raise nearly enough to make up the difference and in some ways are more regressive. They hit lower income households harder instead of being willing to ask the rich and corporations to pay what they owe in their fair share.
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It's very interesting. So moving away from taxes for a second, it seems like North Carolina is losing teachers to other states. And that has been an issue for as long as I've been alive. So has that been addressed in the budget for educators? And then also what has the pay been for state workers?
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Yeah, so I think in this most recent budget, we've seen, you know, an average of 8% raise for teachers as well as raises for, you know, public workers and state workers.
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But the thing about the 8% is that it's an average. So we work with a lot of education partners and we've done the analysis ourselves is that when you actually take a deeper dive into, you know, the races that teachers and state employees are getting, newer teachers are actually, you know, benefiting more from races and getting more in races than veteran teachers. And my mom's a veteran teacher. She, you know...
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is, you know, someone who's been working in the state for a really long time educating students. And so a lot of, you know, what we've seen with the raises is that while they may incentivize newer teachers to stay in the state for a little bit longer, there's still not a big enough incentive to
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for teachers to stay in the state to teach for longer than a few years, because they're going to be, their raises will be stagnant for, you know, years 15 through 24, I believe. And that is a long time to not receive a raise at all.
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So, you know, teachers may still be looking for other work or looking to, you know, work in other states and nearby counties if you're on the border, or just completely turning away from public education, which then, you know, reduces that workforce and creates a bigger pressure on our public education system
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to serve, you know, students with less resources, those resources being our teachers. And we also saw bigger raises. I believe it's almost 10 percent for, you know, state employees and maybe almost 20 percent for, you know, our state prison workers, which, you know,
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Everyone deserves raises, but everyone deserves meaningful raises that actually keep up with inflation and that actually keeps up with the tradeoffs and health care costs that, you know, lawmakers have also put into place.
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Yeah, and just to add on to that, as you're saying, the context for these percentages is so important because you hear 8% average raise for teachers and think, okay, 8% sounds like a lot. Then you talk to teachers and organizations who represent them, and you understand that.
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after having gone a year with no raises and in the context of inflation, that 8% doesn't go very far. And the state is putting us on a trajectory where that type of pay won't be able to be sustained over time. And then likewise, I think most state employees, you know, in certain sectors, they got a higher percentage raise, but I think most got just 3%, which is less than the rate of inflation and comes again after a year of no raise, so.
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at all. So and you know, you'll, you'll hear that articulated by the organization, the association that represents the interests of state employees. That's why it's so important to put those numbers in context and understand what they actually mean for people's ability to afford to live and work in North Carolina.
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Mm hmm. OK. So are there any big wins that you have been noticing in this budget? Not just a win for the House or one for the Senate, one for the Democrats, one for the Republicans. Are there any is there anything in the budget where, OK, this is actually going to benefit North Carolina long term?
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Yeah, we were just talking about this a little bit earlier today, actually. Some of, did you want to start? No, you go. There are certainly places where it feels like positive steps were made. For a long time, these tax cuts have been on autopilot. And this last year was the first year where we heard the House articulating concerns about what is our long-term plan.
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ability to fund these things. We've told people that we want to fund for them. So although it is still a very disappointing budget and does not put North Carolina on a sustainable path, does not fund the needs that people have asked for, it does slow down that scale of lost public dollars by slowing down the personal income tax rate cuts.
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There are a few other places as well. There's been an investment made in child care subsidies to establish something called a floor that basically the impact is that it will help stabilize child care centers across North Carolina. It'll make it so that.
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those centers are receiving funding that is closer to the real cost of providing child care, which is really expensive. You have to have, you know, these really low teacher to student ratios for infants, basically. So it's an expensive thing to do. And by establishing establishing this floor, it makes the child care industry more sustainable over time.
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So that's one example. There was also we're still sifting through all the details, but there's some funding restored to the Healthy Opportunities Pilot Program, which is what it sounds like. It's a form of, you know, health, providing health, healthier outcomes and health health access in North Carolina and.
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Yeah, and we've also seen some more funding for a Haleen recovery, which has especially been important. But I think, you know, while all of these are positive steps, as Sally said, with the continued tax cuts, there's really a question of whether lawmakers will be able to sustain these positive steps in the future.
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because of the we're collecting less and less revenue so while we are very you know excited to see these steps there is also and some slower tax cuts there's also the need to really you know dig deeper into you know looking at the revenue needs in our state and looking at you know
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You know, really providing the funding for these programs so that they can, you know, benefit North Carolinians across the state year over year instead of just, you know, relying on the state every couple of years to figure out, you know, do we have the funding for this or not? So, yeah.
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And again, that's why those constitutional amendments are so concerning, because they would block the ability to make different choices in the future. You know, at like, we've seen the ways that this budget doesn't do what it could have done.
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And people are increasingly experiencing that in their day-to-day lives. Like there are some people listening who they don't need Sally and Mariah to tell them. Right. That their brain has not kept up over time or they don't need us to tell them that the cost of housing and child care is becoming unsustainable. They're experiencing it. And as people connect the dots to tax policy, it becomes possible to make different choices in the future. But it becomes not possible to do that if we lock in.
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these bad tax choices in our state constitution. And one thing that I wanted to bring up is the conversations locally with the local officials. What I've heard sometimes is like, hey, we're just waiting for Raleigh to make a decision. So how does that kind of flow from how the federal government affects the state and then the state affects what happens locally?
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Yeah, I think one example of that when talking about the federal, state, and local connections is with a program called SNAP, which is the Supplemental Nutrition Assistance Program, otherwise known as Food Stamps or FNS in our state.
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So there's been federal policy changes that were passed last year that really changed the funding structure for that program. That really helps people afford groceries and to afford to put food on the table. It's a supplement, you know, that people can use in the grocery store to get food to their families and their kids. Yeah.
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But by the federal government changing the funding structure, they actually, you know, shifted more of the cost for that program on to the states. And because of how the SNAP program is administered in North Carolina,
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It actually is run by counties. So a lot of the funding, even though it was, you know, mainly resourced by the federal government before, now, you know, our state and counties will have to pay a bigger share to not only, you know, administer the program, but also to actually pay for the benefits of the state.
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that people receive in our state. So a lot of that, a lot of those changes shifted costs to the state. But what we've seen in this most recent budget is that, you know, a lot of
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The tax policies and a lot of the funding that our state provided for SNAP, they did provide a little bit, but not nearly enough to fully cover the cost of four counties to administer SNAP and continue to help people get and afford groceries. Yeah.
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Um, so with the SNAP program, um, a lot of the pressures that, you know, came down from the federal to the state is now going down from the state to the local level. Um, because counties, again, are already facing increased pressures, um,
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for like inflation. And I think a lot of people don't understand that, or they may not, you know, realize is that in the same way that people's pockets and budgets are getting hit hard by inflation. So is, you know, everything that the government does.
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So the cost to, you know, do what the county does to pay for things that, you know, we need in our counties, that has only increased. And they, counties cannot bear that burden of actually paying for the administration of SNAP. There's really only one entity that could do that, and that's the state.
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So I think in that way, there's been a lot of, you know, continued conversation and continued negotiation between who really pays for this program. Because, again, if, you know, counties aren't able to pay for this.
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this program, then that means ultimately people will lose out on their SNAP and lose access to their SNAP benefits and will no longer be able to afford groceries in a time that, you know, people are experiencing higher costs for everything. Hmm.
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Alright, so now that the budget is here, I'm kind of curious, what do the legislators do now that the budget has been passed? Do they, like how much time do they put into this? Is there going to be a next phase for the people who don't track politics nearly as much? What do they start working on now if it isn't the state budget or are they still keeping track of that over the years, you know?
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Yeah. So right now, again, it's in the governor's court to decide whether to sign the budget into law to veto or let it become signature without a veto. If it does become law, you know, in North Carolina, largely the short session will wrap up, which is the session that happens in even years. But then the long session, which happens every odd year, starts up again in January 2027. So.
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That's why even if we're not in a long session or one of those years where we're making a two-year budget, it's almost a year-round process. And there's always an opportunity to be engaging with lawmakers, to be lifting up needs, because before we know it, they'll be back in Raleigh for 2027 and doing the whole process all over again. Yeah.
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So what are some actionable steps that my audience can take, whether that's something that they can keep track of or get a part of, just something that's very easy, not too overwhelming to still get involved in this process without having to track everything that happened. I know you mentioned the programs that happen, but when I go home today, what are some things that I can look out for?
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Yeah, I would recommend starting with our website, probably ncbudget.org. There you'll find all the blogs that we've posted about the budget process this year, as well as our initial analysis of the finalized budget. You'll also find, I think, at...
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ncbudget.org slash news, that's where you'll see those real-time updates that we post when some new development happens in the budget process because it can be really hard to know. There's like long periods of time with nothing happening as we've seen this year. And then suddenly a lot will happen very quickly. And so if you go to that page, ncbudget.org slash news, you'll see the place to subscribe to receive those real-time updates. And you'll see examples of the types of updates we've sent in the past that,
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um and on our website there's an action page so if you're like i've heard something today that really fired me up i want to take action you can go to that action page it's really easy to find and you'll see um what you can do whether it's contacting a lawmaker whether it's joining the people's budget coalition whether it's uh distributing yard signs or flyers in your community um there's going to be
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a lot of work to do in the coming months. So we really encourage folks to stay connected and we would love to see more folks engage with our state budget and state tax policy. Yeah. Well, thank you so much for joining me today. Thank you. Thank you for having us.
