Senate Bill 1016, titled the Fair Share for Public Schools Act, would create a new 7% North Carolina individual income tax rate on taxable income above $1 million. The bill applies this surtax only to the portion of income exceeding that threshold, and it would take effect for taxable years beginning on or after January 1, 2026.
The bill directs the revenue collected from this high-income surtax, after allowing for administrative costs and a limited collection reimbursement to the Department of Revenue, to the State Public School Fund. Those funds would then be allotted to local school administrative units on a per-pupil basis, consistent with the state constitution’s public school funding provisions. In effect, the measure is designed to dedicate new tax revenue from very high earners to K-12 public education.
Impact
The bill would amend North Carolina’s individual income tax statute, G.S. 105-153.7, by adding a new high-income tax bracket or surtax for income over $1 million and by exempting that rate from the existing rate-reduction trigger. It would also create a statutory distribution mechanism requiring the Secretary of Revenue to transfer the proceeds to the State Public School Fund, with a capped amount retained for administrative and collection costs. The practical effect is to increase state tax liability for a small group of high-income taxpayers while increasing funding available for public schools.
Sentiment
Based on the bill’s title and structure, the measure appears to be framed positively as a school funding proposal and as a way to ask high-income taxpayers to contribute more. No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the available record. The bill’s presentation suggests a policy rationale centered on education funding and tax fairness.
Contention
The main likely point of contention is the creation of a new 7% surtax on income above $1 million, which supporters would view as a targeted revenue source for public schools but opponents may characterize as a tax increase on high earners that could affect competitiveness, investment, or taxpayer behavior. Another possible issue is the earmarking of income tax revenue for a specific purpose, which can raise broader budget and tax-policy concerns about flexibility and the use of dedicated funds. Because no discussion transcripts or votes are available, specific named objections or supporters cannot be identified from the record provided.