North Carolina lawmakers haven't passed a full budget bill since 2023, and Gov. Josh Stein says tight funding and stagnant salaries are pushing state government to the breaking point. He proposed a $1.4 billion stopgap budget plan Monday to address some of those issues.
Republican leaders in the House and Senate remain at odds over whether to delay scheduled income tax cuts, resulting in last year's budget impasse. Stein says priorities like Medicaid funding and state employee raises can't wait any longer.
One of the governor's most pressing requests is $319 million needed to keep the Medicaid program from running out of money.
"If we do not fully fund Medicaid well before the end of the fiscal year, healthcare for millions of North Carolinians will be in jeopardy and our entire health care system weakened," Stein warned.
The legislature is holding no-vote sessions this week and won't return to Raleigh until April 21. Health and Human Services Secretary Dev Sangvai says current funding won't last until June.
"So if it were a priority in April, that would be well appreciated," Sangvai said during a news conference. "If there's an opportunity before, then it would be even better."
Legislators are optimistic they can avoid cuts that could cause medical providers to stop seeing Medicaid patients. Sen. Benton Sawrey, R-Johnston, co-chairs committees on healthcare.
"We have a long running track record, at least the past 16 years, of making sure that Medicaid services are delivered to those in need," he said, "and we're going to do we need to, to make sure that continues to happen."
Sawrey said senators are reviewing the Medicaid budget and see "room for improvement." Demi Dowdy, a spokeswoman for House Speaker Destin Hall, criticized Stein's latest proposal in a news release, saying it "refuses to include basic cost controls and guardrails to protect taxpayer dollars."
Proposed 2.5% raise for most state workers
Stein is also calling for quick action on raises for state employees, teachers and law-enforcement officers.
"None of them have received any raise in pay in nearly two years, despite inflation and rising costs; health insurance premiums just went up for state employees," he said. "So essentially, our state employees are being asked to do the same job today for less money than they earned a year ago."
Stein's funding requests includes a 2.5% percent raise for most state employees, retroactive to last July. Starting teacher pay would increase to $49,518, and teachers would get an average raise of about 6%.
John Lassiter is principal of Hertford Grammar School in Perquimans County. He says teachers there are leaving for higher-paying jobs in nearby Virginia counties.
"We compete to keep teachers that could make $10,000 or $15,000 more dollars by driving 45 minutes across the state line," he said during the governor's news conference. "Sometimes the joke is, 'I can pay North Carolina taxes and get a Virginia salary,' and that hurts, because our kids deserve a quality education."
The governor also wants to increase salaries for state troopers and correctional officers that are ranked 49th in the country.
"That is a damned embarrassment," Stein said. "It should surprise no one that the State Highway Patrol now has more than 270 vacant positions."
Dowdy, the spokeswoman for Speaker Hall, responded by noting that Stein's salary request is less what the House passed last year. "These critical investments cannot wait, and we urge the Senate to join us in passing these raises for all our state employees," she said in a news release. The Senate's budget also included raises and bonuses, but at a lower level than the House proposed.
'Not responsible budgeting'
The governor says the Department of Adult Correction has started to run a budget deficit due to inadequate funding. "For the past year, the DAC has been forced into the untenable position of having to ask vendors to float them on their bills," he said. "That is not responsible budgeting for a household. It is surely not the way a $2 billion state agency to manage our state prisons should operate."
The governor says his latest proposal is just a starting point, and he wants to see bigger raises later in the year. "We are not a poor state, but we are making ourselves a poor state by reckless, pre-programmed tax cuts, and that will be a topic for additional conversation," Stein said.
Stein says the state can afford his short-term request without making changes to income taxes, a debate that still looms when the legislature returns in April.
The request from the governor comes a week after at least eight incumbent legislators lost their primary elections. Senate leader Phil Berger is trailing his opponent by 23 votes as a recount looms.
All of that could affect this year's political dynamics in the legislature, but Stein is optimistic they can still get things done.
"I'm hoping that we're at a point in the political cycle where we can put our differences and political disputes behind us and put to the front what is going to help the people of North Carolina," he said.
