No NC big budget yet, but a deal is in the works as Gov. Stein pressures lawmakers
North Carolina’s state budget is already a month late, delaying raises for tens of thousands of teachers and state employees while the Republican-controlled legislature works on a deal.
But a smaller budget bill is on the table with lawmakers back in Raleigh this week.
Democratic Gov. Josh Stein added pressure to General Assembly lawmakers on Tuesday as the legislature returned to take up veto override votes from Stein. Stein has vetoed 14 bills this year, and Tuesday is the first time lawmakers have tried to overturn them. The Senate quickly overrode some vetoes Tuesday morning.
Republican Rep. John Bell, who chairs the powerful Rules Committee, told reporters on Monday that “it’s possible” there will be a smaller budget bill coming this week. North Carolina law means that the government doesn’t shut down without a new budget, but spending levels remain at the same amount as the previous budget.
Stein told reporters on Tuesday that he is “aware that that’s what the General Assembly is considering,” but would not say what the small budget bill may contain.
What’s in NC’s mini budget?
“We have a lot of issues in North Carolina: We have education, we have public safety, we have health care, we have customer service like the DMV. These are issues, some of which may be included in the mini budget, but not everything will be,” Stein said.
“We need to take care of all of the state’s government. I urge the General Assembly: Let’s set aside our differences. Let’s come together on a budget that is sound, balanced and in the interest of the people,” he said.
Stein also said he’s confident that he and legislative leaders and work together and was focusing on “trying to be part of the solution.”
The main purpose of this year’s legislative session is to get a comprehensive, two-year spending plan done. Key differences at play between the Republican-majority House and Republican-supermajority Senate are over future tax cuts as well as raises.
Plus, a majority of House Democrats voted with Republicans on the House version of the budget, though they called out the reasons they don’t like it, like its funding for private school vouchers. But proposed raises, and adding triggers before future tax cuts kick in, as well as restoring the back-to-school sales tax holiday, was enough to get their votes.
Raises, taxes in the House and Senate budgets
The House budget had raises for state employees at 2.5%, while Stein’s proposal was 2% and the Senate’s even lower. Raises for teachers in budget proposals vary by experience, with the largest raises for early career teachers. Stein wants starting teacher pay to be the highest in the Southeast, with a goal of $53,000, with supplements, by 2027.
“Pass a budget that honors our work,” Rachel Candaso, the North Carolina 2025 Teach of the Year, said during Stein’s news conference.
“Right now, many educators are starting the year without knowing what their salary will be or whether their years of service will be fully recognized,” Cadaso, a Pitt County teacher, said.
The tax battle between House and Senate Republicans, led by House Speaker Destin Hall and Senate leader Phil Berger, centers on future tax cut triggers. The House budget keeps the planned individual income tax rate reduction planned for 2026, down to 3.99% from 4.25%, but would set new, harder to reach levels for the future state tax collections than the Senate’s plan. Stein wants to freeze tax cuts.
Medicaid could be in budget deal
Stein also told reporters that budget delays mean more delays in hiring more employees at the Division of Motor Vehicles, the state department plagued by daily long lines and significant delays in services for drivers.
Another need is the Medicaid rebase, which is funding adjusted for Medicaid cost fluctuations. Both House and Senate budget proposals don’t fund the rebase as much as the N.C. Department of Health and Human Services says is needed, The News & Observer previously reported. But without a budget, there’s no rebase funding yet.
The governor also hopes that lawmakers fund Medicaid expansion that was cut in President Donald Trump’s massive spending package, which is called the Big Beautiful Bill Act. Stein said he has had “constructive” conversations with lawmakers about Medicaid rebase and expansion.
Medicaid expansion was a years-long battle between Democrats and Republicans until Republicans came on board and North Carolina expanded it during the administration of former Democratic Gov. Roy Cooper, who is now running for U.S. Senate.
Stein said that he “thinks the world” of Cooper and is excited about his campaign.
“He has a servant’s heart. He is doing this because he loves North Carolina and he loves this country,” Stein said of Cooper.
This story was originally published July 29, 2025 at 9:39 AM with the headline "No NC big budget yet, but a deal is in the works as Gov. Stein pressures lawmakers."
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