State & Local News
North Carolina Faces Budget Shortfall
March 24, 2026
North Carolina's nonpartisan consensus revenue forecast projects a $360 million revenue shortfall next fiscal year and a cumulative $3.4 billion loss by FY 2028 due to personal income tax reductions. Governor Stein highlights a looming $2.8 billion budget gap that threatens funding for critical public services including public safety, education, and healthcare. The Governor urges the General Assembly to reconsider tax policies and prioritize investments in the state's growing population to sustain service levels and economic momentum.
- Why this matters: State agencies and procurement professionals should anticipate potential budget constraints impacting contract awards and service funding in North Carolina.
- The projected budget gap may lead to reduced procurement spending or reprioritization of contracts supporting public safety, education, and healthcare sectors.
- Vendors and contractors should evaluate risks related to state funding availability and consider strategic engagement with agencies to align offerings with evolving budget priorities.
- Procurement planning should incorporate potential fiscal adjustments and monitor legislative actions affecting tax policy and budget allocations.
North Carolina has found a recipe for success, but if we fail to act now, we're going to be several ingredients short. Today's forecast means that we will soon fall into a budget gap of at least $2.8 billion, causing the state to have to make painful cuts to critical services like public safety, education, and health care. There is still time to act to keep up North Carolina's positive momentum. As our population rapidly grows and the federal government becomes a less reliable partner, I urge this General Assembly to study these new realities, hit pause on outdated, irresponsible tax triggers, and invest in our most important resource: our people.
— Governor Stein
Agencies
Office of State Budget and Management, Fiscal Research Division, General Assembly