RALEIGH, N.C. — Two tax amendments are now part of the North Carolina Constitution after Tuesday’s vote, and the General Assembly must still invent the property tax ceiling when the new session gears up the week of Nov. 16.
Roughly three in five voters backed the levy limit that orders lawmakers to restrain how much counties and cities can collect even when assessments climb. Nearly 2.5 million ballots favored it. A second measure, with about 62 percent support, freezes the top state income tax rate for people and corporations at 3.5 percent.
The property tax text sets no percentage and no deadline. It only tells the legislature to write a limit. One idea circulating would peg allowed revenue growth, at least in part, to inflation.
County budgets lean heavily on the tax. State fiscal researchers put the share of general-fund revenue from property taxes near 59 percent in Forsyth, 65 percent in Mecklenburg and 75 percent in Wake. A University of North Carolina School of Government projection warns statewide local collections could drop by about $321 million, depending on the final design.
School buildings are another pressure point. North Carolina education officials this week catalogued roughly $18 billion in facility needs over five years for 115 systems, much of it deferred work on plumbing, heating and electrical systems that counties often finance with property tax-backed bonds.
Gov. Josh Stein has cautioned that a hard cap could pinch water systems, local roads and libraries. House Democrats, who seized the chamber Tuesday, will help draft the rules alongside a state Senate whose majority still hinges on one unfinished race.
The personal income tax rate now stands at 3.99 percent and is already set to ease to 3.49 percent in January and 3.24 percent by 2030. The corporate rate, now 2 percent, is scheduled to hit zero by 2030. Fiscal analysts say those planned cuts could strain the state budget by 2028 if they keep going.
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