In November, there will be three constitutional amendments on the ballot for North Carolina voters, two of which would impose limits on tax rates. These amendments have been framed as means of improving affordability for North Carolina residents, but in reality they could cost us a great deal when it comes to the services and resources our communities rely on. Importantly, neither amendment would lower current tax rates. Instead, they could limit our state and local representatives’ ability to provide the services our communities rely on in an unpredictable future.
One of these amendments would cap state income tax at 3.5%, which is half of the current 7% constitutional limit. In 2025, the actual tax rate was 4.25%, and that rate is already scheduled to drop to 3.49% in 2027 and 2.99% in 2028. Taxes are already set to decrease, so this amendment would not provide any immediate relief for taxpayers. Instead, stricter limits on income taxes for the long-term, our state’s largest revenue source, would likely result in a greater reliance on more regressive revenue sources like sales taxes, fines and fees, disproportionately impacting people with lower incomes. Additionally, this amendment could also jeopardize North Carolina’s bond rating, as major credit rating agencies in the U.S. name constitutional limits on taxes as a negative factor because they severely constrain government’s options for repaying loans.
The other tax amendment would prompt the NC General Assembly to limit increases to local property taxes. This amendment would make it increasingly difficult for local governments to provide the resources taxpayers depend on. Property taxes are the largest source of funds used for public school buildings, libraries, parks, emergency services, sidewalks, elections and more. Recently, local governments have also had to factor in big new costs for key services like SNAP food assistance because of federal cuts.
In reality, both amendments will likely hurt North Carolinians in the long run. Unlike temporary limits that could be imposed through regular legislation, constitutional amendments are permanent. We don’t know what resources will be needed to maintain our schools, emergency services, or roads and bridges decades from now. We also don’t know what natural disasters we’ll face or how much recovery efforts will cost. None of us can predict the future, so let’s not preemptively limit our options for ensuring our communities have what they need to thrive in the long run.
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