NC’s budget stalemate is historic, but it’s a healthy kind of Republican fight | Opinion

For the first time since Republicans took control of the General Assembly, a comprehensive budget may not land on the governor’s desk. These deals often take months, but this year feels especially stuck.

Senate leader Phil Berger and new House Speaker Destin Hall are reportedly at an impasse and don’t expect votes the rest of 2025. That would mark the first time in at least three decades that there’s been no agreement in a long session.

With the federal government shut down — have you even noticed? — it’s easy to say the General Assembly “isn’t doing its job” because there’s no big budget bill. There’s some truth there. State employees aren’t getting raises, and that’s hard.

But North Carolina can keep operating under last year’s plan, and lawmakers passed a few smart stopgaps to cover near-term needs. The tradeoffs at stake in the next full budget will shape our trajectory for a decade, so it’s worth taking the time to get them right.

Call it a stalemate if you like. I see a healthy debate — and the right kind of fight.

Two conservative instincts, one impasse

After talking with members in both chambers, it’s clear the sticking point isn’t pet projects or power plays. It’s tax policy, and two different ways of being conservative.

The Senate fears losing momentum on a signature achievement: flattening and lowering taxes to catalyze growth. The House fears a budget deficit down the line that could force the state to make painful decisions.

This is a genuine policy disagreement inside a Republican near-supermajority that has, for a decade, delivered both tax relief and fiscal stability.

Under the Senate’s plan, personal income tax rates would continue to come down over the next three years under an agreement the chambers reached in 2023. Initially, the Senate wanted even more aggressive tax cuts, but leaders tell me they’ve backed off that position.

The House, however, wants to delay more tax cuts for the foreseeable future. After spending more than $2 billion on Hurricane Helene recovery and hearing economic forecasts of looming budget deficits, they want to keep more flexibility.

Everything else in the budget fight is noise. Sure, there are some real disagreements, but nothing that would preclude a compromise. The House would lift starting teacher pay to $50,000 and strengthen the early-career pipeline with permanent salary steps. The Senate leans lighter on the base schedule and heavier on bonuses.

Children’s hospital funding, a zoo expansion, Medicaid mechanics: All are real issues, but mostly bargaining chips. They become solvable once the tax question is settled.

As for that question, both positions are recognizably conservative. One prizes small government and keeping money in people’s pockets. The other defends the balance sheet.

Don’t expect movement before spring

This is the longest budget stalemate in decades, and it may become the first GOP-era year without a comprehensive agreement. That’s frustrating. It’s also reality until the spring consensus revenue forecast arrives.

Like it or not, both sides need a fresh set of numbers to argue from the same baseline. Until then, continuation budgeting and targeted mini-budgets can keep the lights on. It may be annoying, but it’s not a crisis.

I’m not picking a chamber to back here. I agree with the Senate that reducing the personal income-tax rate is smart, pro-growth policy for a competitive state. I’m also skeptical that the revenue picture will be as dire as some forecasts suggest. History says projections tend to miss.

But we have to govern with the numbers in front of us. One of North Carolina’s quiet successes over the past decade has been fiscal prudence and restraint.

We cannot budget a structural deficit. And we shouldn’t pretend to balance one by counting on marijuana or gambling money to right the ship.

Budget negotiations aren’t glamorous work. But when we get it right, North Carolina grows — steadily, sanely, and with room for families to put down roots.

That’s why I’m not despairing over our budget impasse. Politics is often petty and personality driven, but the budget stalemate appears to be anything but. If you’re looking for villains, you’ll be disappointed.

Contributing columnist Andrew Dunn is the publisher of the Longleaf Politics newsletter, which offers thoughtful analysis of North Carolina politics and policy from a conservative perspective. He can be reached at andrew@longleafpol.com.

This story was originally published October 30, 2025 at 6:06 AM with the headline "NC’s budget stalemate is historic, but it’s a healthy kind of Republican fight | Opinion."