(Carolina Journal) – North Carolina legislative leaders are still working through the final details of a state budget that Tuesday was a 351st day late of its July 1 implementation.
Republican leaders say a finished spending plan may not be ready as quickly as they had hoped. Sen. Phil Berger, R-Rockingham, president pro tempore of the upper chamber, last month projected lawmakers would finish the budget bill during the week of June 15.
He said he no longer expects that timeline to hold; the end of June is within reach, he says.
House Speaker Destin Hall, R-Caldwell, said finalizing the budget this week is still possible, but emphasized that the exact date remains uncertain as budget writers review the full spending plan.
“I think it’s tough to answer that question,” Hall told reporters on the floor of the House of Representatives.
“The chairs are very close to finishing up their work, and so usually what we would do is wait until they get done and resolve what they can,” Hall said.
He anticipates meeting with Berger this week, or talking by phone.
Details are beginning to emerge about what will be included in the final budget. Among the items expected to make the cut are additional Hurricane Helene recovery funds, changes to Medicaid policy for applied behavior analysis therapy, and a higher tax rate on sports betting operators.
Helene recovery funding has remained one of the state’s most pressing budget priorities since the September 2024 storm in western North Carolina. Lawmakers have approved several rounds of recovery aid, but state and local officials continue to push for more as communities rebuild.
Friday will begin the 90th week of recovery.
Applied behavior analysis therapy is a Medicaid-covered autism therapy that has drawn increasing scrutiny from lawmakers and state officials. The new oversight measures are expected to be tied to telehealth, provider certification requirements, and additional guardrails to reduce fraud, waste and abuse.
Lawmakers are also considering a tax increase on sports betting operators as part of the budget package. North Carolina taxes sports wagering operators at 18% of gross wagering revenue and has collected more than $299 million in taxes since the March 2024 launch of online sports betting, far exceeding initial projections.
A proposal under discussion would increase that rate, generating additional revenue for budget priorities as the state’s legalized sports betting market continues to mature.
Gov. Josh Stein said earlier this month that the Republican budget framework is a step in the right direction, particularly on teacher and law enforcement raises. But he has also pushed lawmakers to spend more on state employees and public services, saying the proposed pay increases do not go far enough after years of inflation and rising State Health Plan costs.
The May agreement included an average 8% teacher pay raise, a 3% raise for state employees, larger raises for certain law enforcement and public safety positions, and funding for a proposed children’s hospital in Apex. It also maintained the scheduled reduction in the corporate income tax rate and laid out a new path for personal income tax cuts, eventually reducing the rate to 2.99% by 2033, with potential revenue-triggered reductions thereafter.
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