Early this morning, the North Carolina General Assembly voted to approve the state budget. While holding steadfast to conservative principals, we were able to support a final budget that results in close to $400 million in tax cuts, while continuing to fund core functions of state government. In keeping with the theme of a Carolina Comeback, we were able to guarantee the citizens of North Carolina will be able to keep more of their hard-earned money. We increased the standard deduction for all citizens, ended tax breaks for special interests, established unlimited medical deductions and unlimited charitable deductions, and lowered the personal income tax rate in 2017 to 5.49%.
Though we lowered taxes, we made sure we were able to continue funding and provide additional funding to certain areas of state government. This budget ensures all gas tax revenues stay in the Highway Trust Fund for building and maintaining state roads. That means $216 million more will go toward transportation projects across the state annually. In addition to transportation issues, we were able to address concerns in the education arena. The budget funds all teacher assistants, raises starting teacher pay, provides state employee/teacher step increases, and includes a long-term funding solution for driver’s education. Furthermore, we included a pay bonus for all state employees.
The budget process was a long and arduous task, but we are proud to announce the passage of the best budget we believe we could put together. We look forward to the continued benefits that will result from this budget and the continued path to a Carolina Comeback.
North Carolina State Budget Highlights
- Immediate tax relief by increasing the standard deduction to $15,500 for married filing jointly;
- Lower personal income tax rate to 5.49% in 2017;
- More competitive single sales factor for corporate taxes;
- Sun-setting renewable energy tax credit, research and development tax credit, and motorsports tax credit;
- Continuing the Historic Grant Program;
- Much needed sales tax revenue to Eastern North Carolina;
- $70 million for port modernization;
- Funding for buffers around military bases;
- $200 million additional for state’s saving reserves; $400 million in investments in state repairs and renovations;
- All gas tax revenues will stay in Highway Trust Fund for transportation infrastructure;
- Funding all teacher’s assistants;
- Long-term funding for driver’s education;
- Commitment to raising education pay;
- Eliminates state taxpayer dollars from going to organizations that provide abortions;
- State Highway Patrol to receive market-based pay increase;
- Strongly invests in other justice and public safety needs; and
- Advances Medicaid reforms to provide care for citizens in need while bending rising cost curve that pulls resources from other core functions of government.
For more detailed highlights of the budget, click here.