RALEIGH, N.C. (AP) — North Carolina legislators gave final approval Wednesday to a stopgap spending measure to boost state government spending to prepare for fall classes, cover Medicaid expenses and continue construction projects while a Republican agreement on a comprehensive budget still remains distant.
The GOP-controlled General Assembly took a break five weeks ago with House and Senate negotiators far apart on working out a two-year, $66 billion budget for the ninth-largest state that should have been in place by July 1. North Carolina is one of a few states that have not yet enacted a budget this fiscal year.
Teacher and state employee pay, the expansion of previously approved future tax cuts and the extent of vacant position eliminations were among the top disagreements in the competing plans each chamber approved in the spring. These and other issues remain pending.
“It takes time to negotiate a good budget,” GOP Rep. Donny Lambeth, one of the House’s top negotiators, told colleagues on Wednesday. “We have the option of moving fast for the sake of being agreeable and pass something quickly that hits a fabricated deadline. Or we work intensely to stand on the basic needs within our state.”
State law already preempts the threat of a government shutdown. But Republicans who reconvened the legislature this week largely to consider overrides of Democratic Gov. Josh Stein’s vetoes also worked out a “mini-budget” they say would allocate $2.3 billion over two years to address agreed-upon pressing needs.
“The funding that’s in this version of a limited budget will get us to the next step in our negotiations,” House Speaker Destin Hall told reporters.
But neither Hall nor Senate leader Phil Berger had a good read this week on if and when a broader budget agreement would be reached. The General Assembly’s schedule allows lawmakers to reconvene monthly into early 2026. with the next potential meeting Aug. 26.
Berger suggested to reporters that additional “mini-budgets” were possible in the months ahead: “We will continue to have conversations between the House and the Senate to see if there are other matters that we would be able to agree to take up.”
The stopgap plan includes money to cover anticipated enrollment changes for K-12 schools and community colleges, as well as for experience-based pay raises already in state law for teachers and some state employees. There’s also $600 million more to meet the increasing costs of Medicaid. It’s a common adjustment made annually. But the amount is getting more attention as the spending reduction law passed by Congress this month contains Medicaid reductions that threatens future enrollment levels in North Carolina.
The plan also includes over $800 million for state construction projects, $197 million for state employee retirement and health care and money to hire additional driver’s license examiners and build more Division of Motor Vehicles offices to address long lines. But it also directs three state departments to cut millions of dollars in spending by eliminating vacant positions.
Current and future budget bills go to Stein. His office was reviewing Wednesday’s bill, which despite some complaints from Democratic lawmakers passed by wide House and Senate margins.
As override votes began at the General Assembly on Tuesday, Stein held a news conference urging lawmakers to focus on passing a complete budget that provides items to his liking, instead of trying to enact over his objections bills that in part loosened gun regulations and eliminated a greenhouse gas reduction mandate.
“That is the wrong priority,” Stein said. “We need to focus on what matters and not these sideshows, which are distractions.”
Republicans are one House seat shy of a veto-proof majority at the General Assembly, giving some leverage to Stein seeking legislation more to his liking. But as seen on Tuesday, when eight of Stein’s 14 vetoes this year were overriden, GOP leaders have been able to persuade some Democrats to side with them on certain issues.
