NC Lawmakers: $18 Billion Lost in Tax Cuts Since 2013

North Carolina has lost $18 billion in potential funds since 2013 because of tax cuts. This is more than enough to fully fund the Leandro education plan for years.
By Newsroom | Government, Finance |

Budgetary Fictions and Fiscal Realities

As North Carolina's lawmakers convene for their 2025 Long Session, a familiar refrain echoes: "We simply don't have enough money." This assertion, often presented as an unalterable fiscal constraint, masks a more complex reality. Since 2013, changes to the state's tax code have resulted in an estimated $18 billion in foregone revenue, a sum that could have funded identified public priorities. This figure represents the gap between current tax collection and what would have been raised had 2013 personal and corporate income tax rates and the standard deduction remained in place.

The critique, articulated by organizations like the NC Budget & Tax Center, centers on the preferential treatment of corporations and high-income earners through scheduled tax cuts. These cuts, particularly the planned elimination of the state corporate income tax by 2030, are juxtaposed against "long-neglected needs and mounting budget pressures."

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The Magnitude of Missed Revenue

To contextualize the $18 billion figure, consider the cost of fulfilling the 'Leandro' plan, a mandate for providing all North Carolina children with a sound, basic education. The legislature's inaction on fully funding the plan for its second and third years represents a shortfall of $678 million. This directly contrasts with the significant financial benefits afforded to the wealthiest segment of the population. The richest 1 percent of North Carolinians, defined as those earning above approximately $770,000 annually, are projected to receive an average tax cut of $56,000 in 2025. This amount is 130 times larger than the benefits allocated to individuals with the lowest incomes, according to data from the NC Budget & Tax Center.

Beyond the broader budget debates, questions surrounding financial transparency emerge in the context of legal battles. A new state law, enacted in August 2025, may shield the donors to legal defense funds from public disclosure. This contrasts with the transparency observed in a specific Supreme Court legal fight, where one participant, Riggs, reported over 12,000 individual donations, while another, Griffin, reported a mere 13, with only three originating from the NC GOP.

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Unlike traditional campaign finance committees, these unregulated legal expense funds appear to operate with fewer restrictions on contribution amounts and without the same disclosure requirements. The potential for this new law to obscure financial backing for legal challenges raises concerns about accountability and the influence of undisclosed interests.

Background: The Shifting Tax Landscape

The narrative of fiscal constraint in North Carolina is intrinsically linked to a series of tax policy shifts initiated around 2013. These changes, characterized by reductions in personal and corporate income tax rates and adjustments to deductions, have been framed by proponents as measures to stimulate economic growth. Critics, however, point to these same policies as the primary driver of reduced state revenue, diverting funds from essential public services. The ongoing legislative session will determine whether the established trajectory of tax reduction continues or if a re-evaluation of fiscal priorities takes precedence.

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Frequently Asked Questions

Q: How much money has North Carolina lost because of tax changes since 2013?
North Carolina has lost about $18 billion in money since 2013. This is because the state changed its tax laws, lowering taxes for some people and companies.
Q: Who benefits most from these tax changes in North Carolina?
Rich people and big companies benefit the most. The richest 1 percent of people in North Carolina could get an average tax cut of $56,000 in 2025, which is much more than poor people get.
Q: How does this lost money affect North Carolina's schools?
The state has not fully paid for the Leandro plan, which is meant to give all children a good education. Not funding it for two years means a shortfall of $678 million, money that could have been used for schools.
Q: What is the new law about legal defense funds in North Carolina?
A new law from August 2025 might hide who gives money to legal defense funds. This is different from normal rules and could mean people don't know who is paying for legal fights.
Q: What was the reason for the tax changes in North Carolina starting around 2013?
The tax changes were made to try and help the economy grow. Supporters said it would create jobs. Critics say it lowered the money the state has for important services like schools and roads.