NC lawmakers end long standoff, send $34B state budget to Stein

North Carolina legislators on Thursday wrapped up a task that other states completed months ago and that historically has taken far less time in The Tar Heel State: they approved a plan to give raises to government employees, update the state’s tax codes and provide new funding to state agencies that are struggling to deliver services in one of the nation’s fastest-growing states.

The Republican-controlled North Carolina General Assembly passed a $34 billion state budget that they started negotiating in spring 2025 and were expected to complete last summer — but delayed for months amid disputes between legislative leaders over spending priorities. The proposal enjoyed bipartisan support Thursday as it passed the state House of Representatives 88-21 and the Senate in a 35-10 vote, sending the legislation to Democratic Gov. Josh Stein.

Stein, who has chided Republican leaders for failing to pass a budget, told reporters Thursday that he plans to study the proposal before making a decision about its future. He has 10 days to sign it, veto it, or let it become law without his signature. 

“There's some good things in the bill and there's some bad things in the bill, and I have to evaluate those, weigh them, compare them, and decide what's in the best interest of the state,” Stein said, adding: “the legislature cannot hold itself back and resist putting in substantive pieces of legislation that have nothing to do with the budget.”

WRAL broke down some of the main highlights of the budget Tuesday when it first became public.

While Republicans say the budget helps taxpayers and state employees without breaking the bank, Democrats say it fails to meet the state’s needs and that the year-long delay was both unnecessary and costly: the raises aren’t retroactive, meaning government employees endured a year of higher grocery and gas prices without help from the state. 

State agencies operated on budgets approved in 2023 as House Speaker Destin Hall and Senate leader Phil Berger bickered over the state’s personal income tax levels and capital projects, such as funding for a planned Children’s Hospital in Apex.

The negotiations featured chamber leaders at opposite ends of their careers. Hall, 39, became House speaker last year following the departure of U.S. Rep. Tim Moore, who led the chamber for 10 years before winning a congressional seat in 2024. Berger, 73, has served as Senate leader for 15 years but lost his district’s GOP primary election to Rockingham County Sheriff Sam Page. Democrats speculated that Berger’s reelection campaign distracted him from budget negotiations — a claim Berger has denied. 

Berger told reporters Thursday that “it took longer to get started” on budget negotiations with Hall than it did with Moore. Negotiations broke down last year over disagreements over tax policy before picking up again in recent months: “Once we were able to get into a room and begin meetings, we were able to move things along,” he said.

Asked about Berger’s comments, Hall spokeswoman Demi Dowdy said “Speaker Hall and House Republicans were clear from the very beginning: we wouldn’t settle for a budget without substantial raises for teachers and law enforcement and a responsible tax plan. And that’s what we got.”

In May, Berger and Hall announced agreements on state employee raises that average 3% for most state workers, 8% for teachers, and up to 17.7% for certain law enforcement officers.  The leaders then met more frequently in recent weeks to discuss the remaining points of contention, reaching a deal over the weekend and unveiling the details Tuesday.  

The plan includes wins for both sides. It includes an additional $105 million for a new children’s hospital to be built in Apex — money that Berger pursued but Hall hesitated to approve. Some House members were uncomfortable sending money to a hospital in Wake County — already home to multiple hospital facilities — while hospitals in their rural districts are struggling financially, Hall has said. 

With that in mind, House budget negotiators also worked to save Medicaid expansion in the face of new policies from the Trump administration that could’ve killed the program in North Carolina, said Rep. Donny Lambeth, R-Forsyth. Medicaid is the government-funded healthcare program that provides coverage to hundreds of thousands of North Carolinians — specifically people who are young, disabled, or impoverished. 

“That could have been very well eliminated with the changes at the federal level,” said Lambeth, a former hospital executive. “So, there are many things here that I think we can be proud of.”

The plan also slashes the personal income tax rate from 3.99% this year to 3.49% next year, but it delays until 2034 a cut to 2.49% could happen by 2029 under current law. State economists have warned North Carolina lawmakers that aggressive tax cuts could lead to a revenue shortage and potentially a budget deficit before the end of the decade. Hall says the new plan puts money back in North Carolinians’ pockets without jeopardizing the state’s reserves. 

“Low taxes are important,” Hall said when introducing the plan Wednesday. “We want to continue to have low taxes in North Carolina, and we do that in this budget. We continue to cut income taxes. We do it at a responsible rate, making sure that the state doesn't wind up in a financial disaster.”

Some Democrats, including Rep. Amos Quick of Guilford County, said they voted for the bill because they wanted to deliver raises to state employees as fast as possible. 

“I will vote for this budget, but I'll vote for it with the same enthusiasm as I have when I eat fast food for dinner — and that's not much,” Quick said. “Most of the time when I eat fast food for dinner, it’s because I need to eat something and a better option is not readily available.”

Other Democrats withheld their support, citing disagreements with specific details in the budget.

For instance, senate Minority leader Sydney Batch, D-Wake, criticized Republicans for a provision buried deep in the budget that would ban the North Carolina State Bar from giving money to civil legal groups — essentially slashing the budgets of organizations that help low-income people facing eviction, domestic violence and other legal issues. Batch, a family law attorney, said she has represented multiple clients who were only able to get themselves and their children out of abusive homes because of Legal Aid’s help.

“This bill takes critical help away from all of those victims, and all of those children,” she said. “And it was done quietly in a spending document.” She alleges it was done in such a way that “nobody would notice.”

Democrats also complained about being left out of the budget-writing process. The budget was made public roughly 24 hours before debate began Wednesday in the Senate. While some parts of the document are straightforward, others are difficult to understand without legal research or subject-matter expertise on various issues.

Sen. Michael Garrett, D-Guilford, said Democrats previously hosted a forum where they elicited bipartisan public input on what the general public wanted to see in the state budget. That’s a strategy Republicans should’ve used, he said, instead of having a small group of members of leadership write the document in secret and then rush through the votes before people can digest it.

“We asked people all across North Carolina, from every different walk of life, to come testify and talk about what they’re facing — whether it's around their kitchen table or at their small business,” Garrett said Wednesday. “And person after person told us how we could help. How we could make life better. There was no process like that in crafting this budget. To me, that's a slap in the face of the people of the state.”