Budget & Taxes (State Budget)

This bill allows the chair of North Carolina's Environmental Management Commission to hire temporary employees using the state's Temporary Solutions Program. It updates the commission's staffing rules to give the chair more flexibility in acquiring short-term staff while keeping salary and travel expenses under existing state regulations. Additionally, the legislation reduces the recurring annual funding for dedicated commission staff by $5,000 from the state's General Fund. These changes directly affect the commission's administrative operations and its budget allocation for personnel.

This bill requires the North Carolina General Assembly to adopt a full spending plan before it can lower tax rates. If the state collects more revenue than specific thresholds set for each fiscal year, the income tax rate will automatically decrease by 0.5% or drop to a minimum of 2.49%, whichever is higher. These automatic reductions would take effect in the tax years following the fiscal year in which the revenue targets are exceeded, starting in 2027. The law applies to future tax years through 2034 and uses final revenue figures reported by the Office of State Controller to determine if the trigger is met.

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.