The North Carolina General Assembly officially started its 2025-26 biennium session on Wednesday, January 8. This year—the first in the two-year cycle—features the legislative long session, which is scheduled to run through June. If all goes well, the next two-year budget will be in place in time for the July 1 start of the 2025-26 fiscal year.
During Wednesday’s House and Senate sessions, Secretary of State Elaine Marshall certified last year’s elections and all members were officially sworn in.
Members then elected leaders for their respective chambers. Representative Destin Hall (R-Caldwell) was elected to replace former House Speaker Tim Moore, who was elected to the U.S. House of Representative in November. After being sworn in, Hall gave a welcome speech that outlined several priorities for the upcoming session. Top priority will be doing all they can to rebuild Western North Carolina. He also highlighted the importance of strong educational choices and providing for every school to have its own resource officer.
In the Senate, Senator Phil Berger (R- Rockingham) was re-elected as President Pro Tempore. Senator Berger also spoke of the need to provide more hurricane relief to affected areas.
Rachel Hunt made her inaugural appearance as the newly elected Lieutenant Governor. In this role, she serves as the president of the Senate, a non-voting position except as needed to break a tie. In her opening remarks, Hunt reflected on the powerful example provided by her father, former Governor Jim Hunt in his “commitment to bettering the lives of North Carolinians in everything from public education to creating good-paying jobs.”
Legislative leaders have made their job of finding funding for hurricane relief more challenging by previously legislating an automatic tax cut for individuals and corporations which will limit state revenue. On January 1, the corporate income tax rate dropped from 2.5 percent (lowest in the nation) to 2.25 percent and is scheduled to drop to zero by 2030. The rate for individuals dropped from 4.5 percent to 4.25 percent, a much higher rate than corporations. The Budget & Tax Center has calculated that the scheduled tax cuts will cost the state at least $8 billion in revenue each year.
Legislators have also committed $675 million for the 2025-26 school year for NC’s two voucher programs, tying up resources that could instead be spent on public school and community recovery efforts.
An ongoing shortfall in the State Health Plan that is expected to grow from its current $507 million to $1.4 billion in a few years will present legislators with even more difficult budget decisions in this year’s session.
NC legislators have been waiting on federal action before committing more state funds to disaster relief. They welcomed news of the federal government’s American Relief Act, 2025 (a continuing resolution to fund the federal government through March 2025) signed into law in December. TheARA contains over $100 billion for critical disaster programs including $29 billion for FEMA’s disaster relief fund.
With the federal funds now in the pipeline, the House Select Committee on Helene Recovery can begin work in earnest. Their first meeting was held in December.