Budget corrections bill adds millions in spending, policy changes

A legislative tool intended primarily to correct errors in North Carolina’s newly enacted state budget is carrying tens of millions of dollars in new appropriations and a series of substantive policy changes.

House Bill 268, 2026 Budget Technical Corrections – II, received final House approval 79-28 on Aug. 5 after the Senate approved the conference report 31-6 on July 29. Lawmakers ratified the 51-page measure Aug. 6 and presented it to Gov. Josh Stein the following day.

The General Assembly’s nonpartisan Fiscal Research Division defines a budget technical corrections measure as “a bill introduced (following enactment of the main budget bill) to address technical issues or errors in the enacted budget.” The division also notes that nontechnical items can be included.

Brian Balfour, senior vice president of research at the John Locke Foundation, said technical corrections are supposed to fix mistakes, clarify language, and make statutory changes necessary to conform state law to the budget. But that is not always the case.

“The provision that ‘other non-technical items may be included’ allows for some additional provisions, and its vagueness unfortunately leaves the door open for new spending or other provisions to be included,” Balfour told Carolina Journal.

From a transparency and accountability standpoint, Balfour said, the process serves a legitimate purpose when lawmakers use it to identify and publicly correct problems with enacted legislation.

“The technical corrections bill is supposed to clean up language that may need to be more precise and make corrections to any errors discovered after that fact,” Balfour said. “Doing so in a bill makes these changes and updates more transparent.”

HB 268 contains several changes that address technical issues or errors. Among them, the bill clarifies how directed grants of exactly $1 million are to be distributed, corrects a drafting error involving Kernersville’s extraterritorial jurisdiction, and adjusts several budget codes and statutory references.

But many of the provisions go beyond correcting errors.

Millions for golf, military games, and film grants

Among the largest items is a $10 million nonrecurring appropriation from the Economic Development Project Reserve to the Piedmont Triad Charitable Foundation to secure PGA Tour Championship Series events in Greensboro.

Under the bill, the PGA would have to agree to hold at least four consecutive qualifying events between 2028 and 2031. The legislation also states lawmakers’ intent to appropriate another $30 million over the following three fiscal years if the agreement’s requirements continue to be met, creating a potential $40 million state commitment.

The agreement must include performance requirements and other safeguards, including repayment of a proportionate share of the grant if the foundation fails to meet the applicable criteria.

Rep. Donny Lambeth, R-Forsyth, pointed to uncertainty surrounding the future of Greensboro’s PGA Tour event in explaining the effort to secure the tournament.

“The Wyndham Golf tournament is probably at risk to some degree,” Lambeth said.

Balfour said the potential economic benefits do not make professional golf a responsibility of state taxpayers.

“Sending tens of millions of taxpayer dollars to subsidize professional golf tournaments is, of course, not a core function of our state government,” Balfour said.

He characterized the appropriation as “just another form of corporate welfare” and argued that state resources should instead be concentrated on core government responsibilities, including public safety and basic public services.

During debate on the bill on the house floor, Rep. Marcia Morey, D-Durham, criticized the appropriation, saying that money could be better spent on many other priorities.

“When you’re adding $65 million to an already existing sports program, that is not a technical correction; that is a big gift,” she said. “Let’s look to the people in need in North Carolina, and not the sports industry.”

The bill also appropriates $25 million in nonrecurring General Fund money to the Department of Commerce to support the 2027 Military World Games in North Carolina.

Of that amount, $17.5 million is contingent on organizers meeting participation requirements and receiving a qualifying security designation from the US Department of Homeland Security. The remaining $7.5 million would be used to reserve facilities at UNC Charlotte for the games.

In May, the Local Organizing Committee for the 2027 Military World Games hosted a delegation from the International Military Sports Council (CISM) for the first site visit to the Queen City. Charlotte will be the first US city to host the Military World Games.

Another $15 million would go to the state’s Film and Entertainment Grant Fund, which provides incentives for qualifying film, television, and other productions.

The program is designed to attract film and television productions to North Carolina by offering rebates of up to 25% of qualifying in-state expenses. Awards can reach up to $15 million for a season of a television series, $7 million for a feature-length film and $250,000 for a commercial.

Feature films must spend at least $1.5 million in the state to qualify, while television series must average at least $500,000 in qualifying expenses per episode. 

Balfour also criticized the additional film funding, arguing that North Carolina should compete for business investment through its overall tax and business climate rather than industry-specific subsidies.

“North Carolina is a great destination for business; there’s no need to put taxpayers on the hook to pad the bottom line of Hollywood film studios,” Balfour said. “Research has shown that states engaging in film incentives get a negative return, meaning the programs are a net loser for taxpayers. North Carolina should end this targeted incentive and instead work toward reducing taxes on all North Carolina workers and businesses without playing political favorites.”

Policy changes extend beyond spending

HB 268 also makes a range of policy changes affecting education, public safety agencies, and the balance of appointment authority within state government.

Among the most significant, the bill restructures the Local Government Commission, removing Democratic Secretary of State Elaine Marshall as an ex officio member and replacing that seat with a General Assembly appointee recommended by the Senate president pro tempore. It also places new qualifications and legislative confirmation requirements on the governor’s appointee to the commission.

Gov. Josh Stein criticized the changes last week, arguing that Republican lawmakers were continuing to shift authority away from Democratic statewide officials. The provisions build on changes in the budget Stein signed in July that reduced the governor’s appointment authority on several boards and commissions and shifted some appointments to lawmakers and other Council of State officials.

The bill would also create a 15-member North Carolina High School Redesign Commission to examine changes to the state’s high school model, including graduation requirements, competency-based education, work-based learning, career credentials, and the use of artificial intelligence in career exploration. 

Although the commission would be housed within the Department of Public Instruction, it would operate independently, and the State Board of Education would not receive a seat. The state superintendent would serve on the commission, while lawmakers and the governor would appoint other members. The commission would issue annual reports through 2031.

Both HB 268 and HB 562 were presented to Stein on Aug. 7 and remained awaiting gubernatorial action. Stein has 10 days to either sign or veto the legislation before it becomes law.

“Budget corrections bill adds millions in spending, policy changes” was originally published on www.carolinajournal.com.