December 2025 - Sweetpotato Speak

The main issue which has prevented the budget from moving forward is tax policy. In 2023, our state budget bill included scheduled reductions in the personal income tax rate which were tied to revenue triggers. If the state revenues meet these triggers, the tax would be reduced by a quarter of a percentage point each year. The personal income tax is currently scheduled to drop to 3.99% in 2026 and could potentially reach 2.49% by 2029 if the triggers are met. Although both chambers agreed on this schedule in 2023, the House Republican Caucus wishes to re-evaluate the policy. Factoring in the scheduled income tax reductions, the non-partisan staff at the General Assembly is predicting a deficit in the next fiscal year and following years. Our state has run a surplus each year since Republicans took over the General Assembly in 2010, so the possibility of a deficit has resulted in the House Republican caucus to strongly advocate for pausing or slowing any income tax reductions. Senator Berger does not have any interest in revisiting the 2023 agreement and points out that year after year the state has greatly exceeded the revenue projections from the non-partisan staff. The Senate views any adjustment to the triggers as a tax increase, since it would likely result in cancelling the tax decrease. Unfortunately, a compromise on this issue has proved difficult, and so a state budget is extremely unlikely anytime soon. Our prediction is that we will not have a budget until May of 2026 at the very earliest. Raises for teachers and state employees, investments in healthcare infrastructure, funding for projects in members districts, and many other important items are delayed while we wait for the budget.

The 2025 Farm Act is likely to be renamed the 2025 2026 Farm Act, as it seems unlikely to pass this year. The General Assembly has one more scheduled Session in 2025 on December 15, but it is unknown whether the members will return to Raleigh for any votes. Initially, there were two controversial provisions in the bill – one dealing with raw milk and one limiting liability for pesticide companies who follow the labeling laws required by EPA. House of Representatives has been unwilling to move the Farm Act forward with a provision dealing with liability limitations for pesticide companies. Another controversial provision which would close loopholes and outlaw raw milk was agreed by both chambers to be removed. While the provision has the support of the North Carolina agricultural community (including our North Carolina Sweetpotato Commission, Farm Bureau, the Agricultural Alliance of NC, and many others), objections from the trial lawyers and the “Make America Health Again” coalition have caused some members in the House caucus to be skeptical. There is also a United States Supreme Court decision which may resolve the issue, so some members wish to wait and see how the Supreme Court handles it before passing a state law.

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