North Carolina voters passed two amendments this week to the state constitution that would put limits on income taxes and property taxes. Public school advocates say they're worried that will shrink the funding available for North Carolina schools.
What's in the amendments
One amendment would permanently cap income taxes at 3.5%, which is just above what the tax rate was already set to fall to next year. North Carolina currently has a flat income tax rate of 3.99% that will lower to 3.49% in January 2027.
"It wasn't a new tax cut; it was locking in the tax cuts that have happened over more than a decade," said Alexandra Sirota, executive director of the N.C. Budget and Tax Center, a nonprofit that advocates for progressive tax policies.
The other amendment directs lawmakers to place limits on what local county commissioners can raise from local property taxes. The details of that amendment will be hashed out by the legislature, where Republican leaders are heading into a lame duck session.
Together, the amendments reinforce Republican’s high-profile legislative goals to overhaul the state’s tax policy.
"Neither amendment automatically reduces funding for North Carolina public schools," said Donald Bryson, CEO of the John Locke Foundation, a conservative think tank.
Bryson said the Locke Foundation has advocated for a model that would allow property tax revenues to grow with inflation and population growth, as a guardrail on the rate of growth, as opposed to a freeze or a cut. The foundation's analysis found that many of the state's largest counties have increased property tax collections faster than that benchmark.
Public school advocates say urban school districts have requested more property tax funding because of a lack of adequate funding from the state.
"Schools are an important part of the discussion because local governments provide billions of dollars annually for K-12 education. The General Assembly should therefore design the implementing legislation carefully," Bryson said. "But taxpayers should not have to choose between well-funded schools and reasonable limits on how rapidly their tax bills can grow."
Why the amendments matter for schools
Income tax is the largest source of revenue for public schools in North Carolina, and property taxes now make up more than a quarter of schools' operating expenses, according to data from the North Carolina Department of Public Instruction. In recent years, urban counties in North Carolina have turned to raising property taxes to cover public schools' increasing costs as state funding for schools has not kept up with inflation.
Lauren Fox, senior director of policy at the Public School Forum of North Carolina, said these new limits are concerning because North Carolina already ranks near the bottom nationally in school funding.
Fox cited a 2025 national study from the Education Law Center that ranked North Carolina dead last in school funding "effort" based on the size of each state's economy, and second-to-last in the country for per-student spending when taking into account a state's cost-of-living.
"If we're capping our taxes both at the local level and at the state level, you're hitting public school funding at both ends and really limiting our ability to make up that gap," Fox said. "The amendments are taking away the tools of the General Assembly to correct on this in future years."
Could counties turn to sales tax to make up for lost revenue?
Sirota said that under these new constraints, county governments may consider raising sales taxes as another avenue to pay for local needs. She said that would shift the tax burden away from high income earners and onto consumers more broadly.
"We have unfortunately put a hard limit on what corporations and the wealthy will pay, and it's important to know that those billions of dollars, if raised in other ways, will ask everyday North Carolinians to pay more in sales tax and fees," Sirota said.
This election, voters in Guilford and Sampson Counties approved ballot measures to raise their local sales tax to pay for education expenses. Sirota also gave the example that schools may turn to raising their own fees for sporting events or parking to make up for lost funding.
North Carolina Association of Educators responds
The North Carolina Association of Educators had been campaigning against the tax amendments throughout the election season, sending educators out to knock on doors and greet voters at the polls with pleas to defeat the amendments.
"I don't blame a single voter out there struggling to make ends meet," said Christina Cole, president of the North Carolina Association of Educators.
Cole said instead she blames Republicans lawmakers for steadily lowering taxes on high income earners and corporations since the party took control of the legislature in 2010.
"I don't want us to be defeated or totally hopeless or spiral into despair, that just because these passed, we still can't generate revenue from the wealthiest and corporations here in North Carolina," Cole said.
But, she added, it's going to take some creativity and political will on the part of newly elected Democrats to do that. Cole said the North Carolina Association of Educators hopes lawmakers will end funding for private school vouchers to make up for revenue lost due to the amendments.
