North Carolina

State Fiscal Briefs

January 2020

North Carolina’s budget basics

According to the National Association of State Budget Officers (NASBO), North Carolina’s total expenditures in fiscal year (FY) 2019 were $51.5 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2019 were $2.1 trillion, ranging from $4.5 billion in South Dakota to $311.3 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, North Carolina’s combined state and local direct general expenditures were $78.6 billion in FY 2017 (the most recent year census data were available), or $7,649 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $9,449.

North Carolina’s largest spending areas per capita were elementary and secondary education ($1,424) and health and hospitals ($1,362). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

North Carolina’s combined state and local general revenues were $83.3 billion in FY 2017, or $8,112 per capita. National per capita general revenues were $9,573. North Carolina uses all major state and local taxes. North Carolina’s largest sources of per capita revenue were charges ($1,822), such as state university tuition and highway tolls, and federal transfers ($1,794).

North Carolina’s politics

Governor Roy Cooper, a Democrat, was elected in 2016 with 49 percent of the vote. The next gubernatorial election is in 2020.

North Carolina has a divided government. Republicans control both the House of Representatives (65 Republicans to 55 Democrats) and Senate (29 Republicans to 21 Democrats). The entire legislature is up for election in 2020 because both representatives and senators serve two-year terms.

North Carolina’s budget institutions, rules, and constraints

North Carolina uses a biennial budget. The legislature must pass a balanced budget and is prohibited from carrying a deficit over into the following year. State spending growth is limited by a budget rule based on personal income growth, but the legislature can override the rule with a simple majority vote. North Carolina limits authorized debt incurred by the state, but not debt service.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

North Carolina’s recent fiscal debates

North Carolina’s current budget

Governor Roy Cooper released his FY 2020–21 budget in March 2019. The governor’s budget and state of the state address focused on his plan to expand Medicaid eligibility, allocate more funds for community college programs, and increase spending for K–12 education and teacher pay raises beyond what was enacted in the previous budget.

The Republican-controlled legislature passed its FY 2020 budget on June 27, 2019. The budget lowered business taxes and did not expand Medicaid. Governor Cooper vetoed the budget on June 28, saying the state should invest more in schools and limit tax cuts. Governor Cooper also continue to insist that the budget fund a Medicaid expansion, but Republican legislators remain just as opposed, warning that additional Medicaid spending could strain future budgets.

The governor also vetoed the legislature’s budget in 2018, but the legislature overrode that veto. However, Republicans lost their veto-proof majorities in the 2018 election.

As of January 2020, North Carolina had not enacted its FY 2020–21 budget.

For more on North Carolina’s budget, see