Budget & Taxes (Government Spending)

This bill requires state agencies in North Carolina to cut their total budgets by at least 10% by June 30, 2028. To achieve this goal, agency heads must submit detailed implementation plans by January 2027 outlining how they will reach the reduction target, and the Office of State Budget and Management will approve these plans before publishing them online. The legislation also mandates a progress report to be submitted by October 2027 and provides $200,000 in funding to the budget office to help manage the transition.

HB 996 reduces North Carolina's state budget spending limit by lowering the cap on the General Fund operating budget from 7% to 6% of projected total state personal income each year. This directly affects the state government's annual budget planning, requiring it to spend less relative to the state's economic output. The bill maintains the existing process for exceeding the cap, which still requires a two-thirds vote in both legislative chambers. It takes effect July 1, 2025, for budgets adopted on or after that date.