Legislative leaders released a state budget proposal this week, outlining both funding priorities and significant policy initiatives. While the NC Chamber does not take positions on specific appropriations, the budget has increasingly become a vehicle for public policy that the NC Chamber monitors closely on behalf of North Carolina’s business community. 

Several legislative priorities championed by the NC Chamber are reflected in the budget proposal, including: 

Expanding Access to Childcare 

One of the most significant Chamber-backed provisions in the budget is the establishment of a statewide floor for childcare subsidy reimbursement rates. 

This provision directly reflects the recommendations of the NC Chamber Foundation’s 2025 Addressing North Carolina’s Childcare Crisis report, which identified establishing a statewide reimbursement floor as an important strategy to strengthen North Carolina’s childcare infrastructure. By helping stabilize childcare providers, particularly in rural communities, the policy supports working parents, increases workforce participation, and helps employers recruit and retain talent. 

How it works: The proposal would increase childcare subsidy reimbursement rates to the 75th percentile of the 2023 Child Care Market Rate Study for eligible providers while ensuring smaller and rural counties receive at least the statewide reimbursement floor. Today, providers in some rural communities are reimbursed hundreds of dollars less per infant than providers offering the same quality of care elsewhere in the state. Learn More >  

Additional childcare provisions include:  

• Establishing a Career-Ready Lead Teacher Academy pilot program to support educator training and career pathways, including a provisional credential for 16- and 17-year-olds. 

• Introducing workforce regulatory reforms to help high-quality licensed programs secure the talent needed to run successful, thriving programs. 

• Designating funding for the N.C. Department of Insurance to study potential liability insurance solutions for childcare providers, including state-supported and risk-pooling options. 

• Creating new credentialing pathways for childcare professionals based on education and work experience.  

Preserving a Predictable Labor Environment 

The budget includes several provisions that reinforce North Carolina’s longstanding right-to-work policies, including: 

• Prohibiting local governments from pressuring employers to make union organizing concessions in exchange for assistance with business operations.  

• Clarifying that local governments cannot indirectly delegate control over private-sector wages and benefits to unions.  

Together, these measures help preserve consistent and predictable labor policy for employers across North Carolina and reinforce the state’s longstanding right-to-work status.  

Advancing Science-Based Environmental Policy 

Recognizing the importance of developing sound, science-based policy grounded in accurate and complete data, the NC Chamber is pleased the budget calls for additional PFAS research and data collection to inform future environmental policy and protect both North Carolina’s natural resources and economic competitiveness. 

The budget authorizes additional study of PFAS discharges from publicly owned treatment works, industrial direct dischargers, and significant industrial users to better understand and quantify where measurable discharges exist before new regulatory requirements are considered. 

Tax Policy Update 

In addition to the Chamber priorities highlighted above, the budget proposal includes several tax policy provisions that are important for North Carolina businesses.  

• Corporate Income Tax: The budget does not include any substantive changes to the corporate income tax. Under current law, the rate will continue on its planned phaseout schedule to zero by 2030. 

• Personal Income Tax: The budget calls for a reduction in the personal income tax over the next three years, dropping from 3.99% this year to 3.49% in 2027, 2028, and 2029 with additional cuts scheduled in 2030 and 2033. Additionally, the rate can be reduced by an additional 0.25 percentage point if General Fund revenues exceed the specified trigger amount for the prior fiscal year, but not below 2.49%. 

What’s Next:  

The General Assembly is expected to vote on the budget by the end of the week before sending it to Gov. Josh Stein. 

The NC Chamber will continue monitoring the budget as it moves through the legislative process and keep members informed on developments that impact North Carolina’s business community.