One of the three constitutional amendments on your ballot will ask you to cap the state’s income tax rate at 3.5%. That would cut the state’s current cap of 7% in half and take away the its ability to raise $17 billion in revenue.
A recent study from the NC Budget & Tax Center found that the state sales tax rate would have to increase from 4.75% to 11.51% to replace this lost $17 billion. This is precisely what Missouri Republicans contemplated doing in their recently-defeated constitutional amendment to eliminate their state income tax. That amendment lost 80-20.
About half of the state’s General Fund money currently comes from income taxes. It pays for K-12, community college, and university education, health and human services, prisons, and most of the state’s other core functions.
If passed, this amendment will limit future voters and future legislators’ ability to recover from natural disasters, like Hurricane Helene, or economic disasters, like the 2008 financial crash and the COVID-19 pandemic.
It takes the support of 30 NC Senators and 72 NC House Reps to place a constitutional amendment on the ballot. The current amendments achieved that support only under deeply gerrymandered legislative maps, making it unlikely that future legislatures elected with fair maps could successfully revisit this decision.
The income tax cap will also hamper the state’s ability to respond to citizens if they demand new statewide programs and services, like cheaper healthcare, better school and sports facilities, or big infrastructure projects, like a statewide flood mitigation and stormwater management fund.
We’ve calculated a few points of comparison to see what $17 billion could do in the widget below.
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