2025 End of Year Report
Fetzer Strategic Partners
Performance/Position Update
State Outlook – NC Again Top State for Business
North Carolina continues to outperform the rest of the nation in business climate, tax policy and growth – earning the #1 place for business by CNBC’s America’s Top States in 2025 (#1 also earned in 2022 and 2023—and missing the top spot just barely in 2024).
Construction Outlook – Strong
North Carolina’s construction industry is the 5th strongest in the nation with multiple data centers and AI infrastructure construction in consideration (Note: Data center developers have reached out to CRMCA regarding potential sites and support before local government units). Data centers use prolific amounts of concrete, and the concrete industry will continue to see a significant demand going forward as a result.
NC was awarded the national 2025 Platinum Shovel Award for exceptional economic development projects.
Construction constituted a whopping 5% of the state’s GDP.
In 2025 alone, the state has announced more than $23B in capital investments and over 30,000 new jobs.
Housing Outlook – Strong
As a result of the explosive population growth in NC (4th largest population gain in nation), new housing remains in high demand, tempered by supply and the wait on fed to lower interest rates.
Tax Climate – Strong
NC ranks 3rd in national, corporate tax rate, and 13th overall based on a decade of tax reform. The current corporate tax rate is 2.25%. Legislation is in place to phase out the corporate tax rate to 0% by 2030.
Budget- Revenue Neutral but Strong
For the first time in several years, NC is “revenue neutral,” with revenue in the black but flattened due to the triggered tax cuts implemented in 2013, reducing overall collections. Hurricane Helene impacted revenues significantly due to extensive damage in WNC and subsequent relief that had to flow into the area although that has been impossible to calculate.
State leaders have looked at “replacement income” to offset revenue reductions. This trend is important to watch as currently a portion of all sales tax collected is redirected to DOT spending.
National Impact/Trump Effect
NC is a critical state for President Trump in the midterms. Despite Trump winning NC in each of his presidential runs, the state’s urban areas lean D and the state is considered “purple.” As a result, we expect to see benefits flowing to the state in the form of continued FEMA funding, healthcare funding, etc. Trump just endorsed Senate President Pro Tempore Phil Berger to return as arguably the state’s most powerful politician.
Legislative Update
One to Definitely Watch – Mecklenburg Transportation Tax Referendum
Mecklenburg County voted to pass a 1-cent transportation sales tax referendum. Despite being considered a potential “tax increase,” the referendum bill received bipartisan support in the legislature to fund a proposed $20 billion, 30-year plan to expand transportation infrastructure across the region, including Charlotte. Once on the November ballot, Mecklenburg County passed the measure.
We predict other counties will want to follow suit and legislation to be introduced by local/urban delegations going forward.
We Want to Keep it – Sales tax and Transportation Funding
The state continues to grapple with funding resources/mechanisms as the gas tax no longer sustains the burgeoning needs. In the 2022-2023 legislative session, the General Assembly shifted sales tax revenues to transportation funding (2% in 2022-2023 and increasing to 4% to 2023-2024). In FY 2024-25 the percent increases to 6%. This shift anticipates $600M in revenue to DOT in the third year and beyond.
Another One to Watch – New NC Property Tax Reduction and Reform Committee
The NC House has created a new committee to study rising property taxes across the state. The House Select Committee on Property Tax Reduction and Reform will look at county reevaluation programs and local spending. A portion of local property taxes funds county infrastructure. The committee is expected to present its recommendations in the spring of 2026.
The Budget – Still Don’t Have One
The 2025 legislative session was not as productive as in year’s past given the stalemate between the R- controlled House and Senate over a budget. Legislative terms are two-years and primaries are in March of 2026. Accordingly, we predict a budget in early 2026.
At this time, we predict the NC Senate will retain its super-majority status although close races in the NC House could jeopardize its majority. The Trump mid-term could influence the outcome as most sitting presidents suffer negative midterm results.
Capture Tax on Ride Share -North Carolina Transportation Commerce Tax
As reported previously, a new transportation tax quietly went into effect on July 1, 2025, after the General Assembly previously enacted a provision to tax ride-sharing services like Uber and Lyft, as well as traditional taxi services. The revenue generated will fund the state’s Highway Fund for road and bridge maintenance and improvements. Exempt from the tax are public transportation, non-emergency medical transport, and food delivery services.
