New Revenue Forecast Shows State Revenue Surplus

RALEIGH, NC — On Tuesday, Fiscal Research and OSBM released an updated revenue forecast. The forecast shows $35.079 billion in revenue for FY 2025-26 and $34.72 billion in revenue for FY 2026-27.

Speaker Destin Hall said, “Today’s announcement of a surplus demonstrates the success of the fiscally responsible policies enacted by our Republican majority over the last fifteen years. Unfortunately, this surplus revenue will be entirely consumed by a projected billion-dollar Medicaid rebase. This program must be reformed in order to preserve our ability to fund public safety, education, and other priorities.

“We must protect North Carolina’s hard-earned reputation for fiscal strength by passing a responsible budget sooner rather than later.”

Under the updated revenue forecast, the state is projected to hit a second revenue trigger in 2028, increasing the chances of a significant recurring deficit and underscoring the need for a responsible budget.

House Republicans support continuing North Carolina’s successful tax reform model of gradual, thoughtful tax cuts, which has taken us from a 7.75% top marginal tax rate to 3.99% over the last 15 years and created the best business climate in the country.