Legislative leaders push back NC budget time frame

North Carolina legislative leaders are still working through the final details of a long-awaited state budget, with Republican leaders now signaling that a finished spending plan may not be ready as quickly as they had hoped.

Senate President Pro Tem Phil Berger, R-Guilford, who had initially projected that lawmakers would finish the budget bill during the week of June 15, said he no longer expects that timeline to hold. However, Berger said Republicans still plan to deliver a budget before the end of June.

House Speaker Destin Hall, R-Caldwell, said finalizing the budget this week is still possible, but emphasized that the exact date remains uncertain as budget writers review the full spending plan.

“I think it’s tough to answer that question,” Hall told reporters on the House floor.

“The chairs are very close to finishing up their work, and so usually what we would do is wait until they get done and resolve what they can,” Hall said. “From what I hear, they’ve made a lot of progress, and so I anticipate Sen. Berger and I will probably meet sometime tomorrow. And if we don’t, we’ll probably talk this weekend or later in the week by phone.”

The comments come one month after Berger and Hall announced a high-level budget framework following months of stalled negotiations between House and Senate Republicans. That agreement included proposed raises for teachers, state employees, law enforcement officers, and correctional officers, while also laying out a compromise on future state income tax reductions.

North Carolina has not passed a comprehensive state budget since October 2023. The state was the only one in the nation to end 2025 without one, largely because of disagreements between House and Senate Republicans over state tax policy. Since then, the state government has continued operating under the previous spending plan, leaving many major pay, policy, and spending decisions unresolved.

Leaders from both chambers say the remaining work is mainly about reviewing a large, complex budget, rather than major unresolved disputes.

During the House session last week, Rep. Tracy Clark, D-Guilford, asked Hall whether members should expect a budget vote this week.

“As soon as the chair knows for sure when that vote will occur, the chair will let members know,” Hall said from the dais. “The appropriation chairs have made a lot of progress, and so it’s a question now of whether that happens next week or the next week or the following week.”

“Those of you who have been here for a long time know it takes a long time just literally to put that document together, not always because things are disagreed upon between chambers or between the parties, but just it’s a big document,” Hall said.

Details are beginning to emerge about what will be included in the final budget, as lawmakers continue to negotiate the full package. Among the items expected to make the cut are additional Hurricane Helene recovery funds, changes to Medicaid policy for applied behavior analysis therapy, and a higher tax rate on sports betting operators.

Helene recovery funding has remained one of the state’s most pressing budget priorities since the September 2024 storm in western North Carolina. Lawmakers have approved several rounds of recovery aid, but state and local officials continue to push for more as communities rebuild. The final budget is expected to include additional Helene money, rather than passing a separate recovery bill.

The budget is also likely to include policy language addressing applied behavior analysis (ABA) therapy, a Medicaid-covered autism therapy that has drawn increasing scrutiny from lawmakers and state officials. Medicaid spending on ABA therapy has surged in recent years, prompting legislators to consider new oversight measures, including limits on telehealth, provider certification requirements, and additional guardrails to reduce fraud, waste, and abuse.

Lawmakers are also considering a tax increase on sports betting operators as part of the budget package. North Carolina currently taxes sports wagering operators at 18% of gross wagering revenue and has collected more than $287 million in taxes since the March 2024 launch of online sports betting, far exceeding initial projections. A proposal under discussion would increase that rate, generating additional revenue for budget priorities as the state’s legalized sports betting market continues to mature.

Gov. Josh Stein said earlier this month that the Republican budget framework is a step in the right direction, particularly on teacher and law enforcement raises. But he has also pushed lawmakers to spend more on state employees and public services, arguing that the proposed pay increases do not go far enough after years of inflation and rising State Health Plan costs.

The May agreement included an average 8% teacher pay raise, a 3% raise for state employees, larger raises for certain law enforcement and public safety positions, and funding for a proposed children’s hospital in Apex. It also maintained the scheduled reduction in the corporate income tax rate and laid out a new path for personal income tax cuts, eventually reducing the rate to 2.99% by 2033, with potential revenue-triggered reductions thereafter.

For now, Berger and Hall are continuing to project confidence that lawmakers can finish the budget before July 1, even though a budget vote during the week of June 15 now appears unlikely.

“Long story short, I’ll tell you as soon as I know,” Hall told House members.

“Legislative leaders push back NC budget time frame” was originally published on www.carolinajournal.com.