NC House overrides Stein veto of Federal school choice tax credit bill – and more

From the Office of Rep. Neal Jackson, with Sandhills News editorial discretion

The North Carolina House voted 73-46 on May 20 to override Gov. Josh Stein’s veto of House Bill 87, Educational Choice for Children Act, advancing the school choice measure to the Senate, which must concur for it to become law.

All House Republicans supported the override, joined by unaffiliated Reps. Carla Cunningham and Nasif Majeed. Both lawmakers, who represent parts of Mecklenburg County, switched their party affiliation from Democrat to unaffiliated after losing their primaries in March. Democratic Rep. Shelly Willingham of Edgecombe County, who voted for the bill last summer, was not in the chamber for the override vote.

North Carolina Democrats argued HB 87 would expand private-school scholarship programs while weakening long-term investment in public education. They believe the legislation would divert taxpayer-supported resources and potential tax revenue away from public school districts that serve the majority of students, including children with disabilities and low-income families. Democrats have argued that private schools receiving scholarship benefits are not subject to the same accountability, testing and transparency standards required of public schools. Democratic lawmakers and Gov. Josh Stein had warned the bill could widen educational inequality by subsidizing families already able to afford private education instead of addressing teacher shortages, classroom funding and aging school infrastructure across the state. (Sandhills News)

Rep. Neal Jackson, R-Moore, urged colleagues to support the measure, framing it as a no-cost expansion of educational options._

“This is a federal program. It costs the state of North Carolina nothing,” Jackson said. “It expands educational opportunities for all students — public school students, charter school students, private school students, and home school students. It allows taxpayers to voluntarily fund student scholarships, and it gives more students access to quality educational environments.”

House Speaker Destin Hall, R-Caldwell, cheered the vote in a statement.

“Today’s override was another major win for North Carolina students and parents,” Hall said. “Gov. Stein and Democrats tried to stand in the way of giving families more control over their children’s education, but Republicans, yet again, stood firmly on the side of educational freedom. This vote was about trusting parents and giving students more choices, because when our kids succeed, North Carolina succeeds.”

If the Senate overrides the veto as well, HB 87 would add North Carolina to a growing list of states that have opted into the new federal tax-credit program authorized under the One Big Beautiful Bill Act signed by President Donald Trump on July 4, 2025. 

Beginning in 2027, individuals can claim a dollar-for-dollar federal tax credit of up to $1,700 per year for donations to Scholarship Granting Organizations (SGOs). These SGOs then issue scholarships for tuition, tutoring, dual enrollment, special education therapies, transportation, curriculum materials, testing fees, and other qualified educational expenses. Families earning up to three times their area’s median income would be eligible.

The passage of this bill marks the second time this term that one of Rep. Jackson’s bills has overcome Gov. Stein’s veto.

New NC Revenue Forecast Shows $2.6B in Additional Revenue than Originally Expected

State economists expect North Carolina to collect $71.2 billion in revenue across the 2025 and 2026 fiscal years, according to an updated revenue forecast released Friday.

That’s an increase of about $1.3 billion since a March projection and about $2.7 billion from the state’s certified budget. The projections come from the Office of State Budget and Management and the legislature’s nonpartisan Fiscal Research Division.

Economists wrote that stronger-than-expected income tax collection drove much of that increase, with capital gains realizations boosted by a third consecutive year of strong stock market performance and “substantial corporate bonuses” driven by significant 2025 profits.

Senate Leader Phil Berger and Speaker of the House Destin Hall pointed to the upcoming revenue forecast revision this week when they rolled out a framework for the state budget, explaining that they planned to be able to both slash the personal income tax rate and boost state employee pay.

“We fully anticipate and expect that we’re covering those pay raises without any real difficulty,” Berger told reporters Wednesday, a day after he and Hall announced the agreement that will now lead to more granular budget talks.

Berger and Hall agree to continue the phase-out of corporate income taxes and slash the personal income tax rate from 3.99% this year to 3.49% for 2027 to 2029 before dropping it further. The plan does away with most upcoming revenue triggers to income tax rates, instead codifying planned cuts that take the personal income tax rate as low as 2.99% in 2033 and 2034 before reinstating triggers that could slash it another half-percentage point.

Without the updated budget agreement, forecasters said, revenue would have hit triggers in two consecutive years dropping the income tax rate to 2.99% by 2028.

Republican lawmakers are planning to give average 3% raises across state government, with teachers receiving average 8% raises and state law enforcement poised to receive raises between about 10% and 20% depending on the agency.

Berger and other Senate Republicans have long been wary of the revenue forecasts, believing they are overly cautious.

In response to Friday’s release, Berger, R-Rockingham, said in a statement, “For years, we’ve seen these revenue forecasts significantly underestimate our state’s economic outlook. North Carolina’s economy is strong, and we continue to bring in substantial revenue surpluses thanks to Republican-led tax and budget policies.”

This video explains how less government control puts more money into workers’ pockets. https://www.facebook.com/reel/1706736166991182

NC House Backs Constitutional Amendments

The North Carolina House advanced three Republican-backed constitutional amendments, including measures to lower the income tax cap, limit local property tax levy growth, and change the process for filling vacancies in eight statewide elected offices.

Constitutional amendments require approval from three-fifths of each chamber before they can be placed on the November ballot for voters to weigh in on. In the House, Republicans needed at least one Democrat to join them to reach the required threshold. 

That support came from Reps. Carla Cunningham, I-Mecklenburg; and Nasif Majeed, I-Mecklenburg, who lost their April primaries after being targeted by Gov. Josh Stein and the Democratic party for voting with Republicans. Both have since switched their party affiliations from Democrat to unaffiliated.  

The first amendment, Senate Bill 1080, Lower Taxes for All NC, has now cleared both chambers and will head to voters in November 2026. The measure would lower the state constitution’s cap on personal and corporate income taxes from 7% to 3.5%.

The Senate approved the measure on a party-line vote of 30-18 before sending it to the House.

North Carolina voters previously approved a 2018 constitutional amendment lowering the income tax cap from 10% to 7%. The state’s flat personal income tax rate is currently 3.99% and is scheduled to fall to 3.49% in 2027 under existing law.

In a press release from Senate Leader Phil Berger’s office, Sen. Michael Lee, R-New Hanover, said the amendment would give voters a say in how much they are taxed.

“Republicans spent the last 15 years digging our state out of the fiscal disasters Democrats created,” Lee said. “Now, instead of facing a $2 billion deficit, we’re seeing a $2 billion surplus. The Republican-led tax policies are working, and the citizens should have a say in how much they’re taxed.”

The income tax cap amendment was the only one of the three to clear the House chamber on Wednesday. The other two House-approved measures — one limiting local property tax levy growth and another changing how Council of State vacancies are filled — now head to the Senate.

House Bill 1089 would require the General Assembly to limit how much local property tax levies may increase. The proposal does not set the cap directly in the constitution. Instead, it would direct lawmakers to establish the limit by general law if voters approve the amendment.

In a statement released after the vote, House Speaker Destin Hall, R-Caldwell, said the measure is needed to rein in rising property tax bills.

“Property taxes are out of control, and some local governments are abusing their power by overtaxing and underdelivering for their constituents,” Hall said. “It’s time for real reform, and this constitutional amendment on levy limits will help stop runaway property tax hikes and protect North Carolina taxpayers.”

House Bill 443, the Council of State Vacancies Act, would change how vacancies are filled in eight statewide elected offices. It would require the governor to choose a replacement from a list provided by the departing official’s political party.

May 23, 2026

Republished with additional information.

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