Brooks Pierce Capital Dispatch: Consensus Revenue Forecast Released, Helene Work Continues
The recent release of the Consensus General Fund Revenue Forecast is a sign that work on the new state budget has begun. Although some legislators were in Raleigh this week, no votes were taken given inclement weather.
Consensus Budget Forecast
The Consensus Forecasting Group (CFG), comprised of economists at the Office of State Budget and Management (its Director Kristin Walker is appointed by Gov. Josh Stein) and the General Assembly’s Fiscal Research Division, on February 14 released a consensus General Fund revenue forecast for 2025-27. The Forecast is an important tool to guide policy makers as they work to adopt a new state budget for the next two fiscal years. It will be revised after the April 15 tax collections are reported.
Some notable items in the Forecast include:
- Revenue collections for the current fiscal year (FY 25) are expected to exceed projections by $544 million (+1.6%)
- Previously enacted reductions in income tax rates will reduce revenue collections in the coming biennium, especially in FY 2026-27. Individual income tax rates fell from 4.5% in 2024 to 4.25% in 2025 and will fall to 3.99% in 2026. The consensus forecast for FY 2025-26 collections is high enough to trigger a 0.5% rate reduction to 3.49% in 2027. The corporate income tax rate fell from 2.5% in 2024 to 2.25% in 2025 and will fall to 2% in 2026.
- Identified “risks” to the forecast include changes in tariff rates, inflation, and the postponement of tax filing deadlines due to Hurricane Helene, which shifted some collections to the second half of the 2025 fiscal year.
Helene Recovery Bill
Although the House did not hold floor votes this week due to inclement weather, leaders indicated that a Helene Recovery bill will move through that chamber next week. The bill (H 47)—Disaster Recovery Act of 2025—Part I—allocates $500 million to the state’s Helene fund for a variety of purposes including housing, private road and bridge repair, stream debris removal and stabilization, crop loss, small business infrastructure, and tourism promotion. Additional provisions may be added on the House floor prior to the bill being sent to the Senate.
Gov. Stein previously recommended a Helene package totaling about $1 billion. A number of his recommendations are included in the House bill.
Both the Governor and legislators have indicated that this bill is one of a number of Helene funding bills that will be considered during this session.
Information about bills and work of the General Assembly can be found at its website: www.ncleg.gov.
For more information, contact a member of the Brooks Pierce Government Affairs Team.
Ed Turlington, Partner
Drew Moretz, Government Relations Advisor
Katelyn Kingsbury, Government Relations Advisor