April 27, 2026
Old North State Report – April 24, 2026
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LEGISLATIVE NEWS
NC LEGISLATURE RETURNS AMID BUDGET STANDOFF
North Carolina lawmakers are returning for a short legislative session with several urgent issues on the agenda. North Carolina’s failure to pass a full state budget last year has left major ripple effects: public employees and teachers haven’t gotten raises, state agencies are struggling to hire for essential roles, and universities are operating without financial certainty.
Beyond the budget, lawmakers may consider veto overrides on contentious bills related to guns, diversity, and immigration. Republicans hold a supermajority in the Senate but not in the House, making outcomes uncertain and dependent on attendance or bipartisan support.
Education funding is also expected to be a flashpoint. Teachers and supporters plan to rally as Democrats push for higher school spending, though GOP leaders have historically resisted proposals tied to the long-running Leandro school funding case.
House Republicans put forward a plan with much larger teacher raises—more than 8% over two years—and a significant jump in starting pay to $50,000, while also halting upcoming personal income tax cuts and proposing a $32.6 billion budget. Senate Republicans countered with a smaller average raise of 3.3%, keeping future tax cuts on track and proposing a slightly lower spending level of $32.3 billion.
Social policy debates are likely as well, including a proposal to ban LGBTQ‑themed books from elementary school libraries.
With elections approaching, there appears to be a real sense of urgency for legislators to complete their work quickly. That provides some hope for this to be truly a “short session.”
NC Newsline (Bonner & Kingdollar) 4/20/26
NC Newsline (Bonner & Zhu) 4/21/26
NC LEGISLATURE MOVES TO PREVENT MEDICAID FUNDING CRISIS
North Carolina lawmakers have reached a bipartisan agreement to provide $319 million to keep the state’s Medicaid program funded, preventing it from running out of money next month. The House and Senate both gave overwhelming initial approval, though final votes are expected next week.
Key points:
- Medicaid shortfall: Without this funding, more than 3 million North Carolinians—including children, disabled people, and low‑income adults—risked losing access to care as providers might stop accepting Medicaid patients.
- Broad support: The House passed the measure 112–1, and the Senate 48–1. Governor Josh Stein is expected to sign it once it reaches his desk.
- Cost‑cutting and oversight provisions: Republican leaders added new rules aimed at reducing Medicaid spending, including:
- Stricter requirements for autism therapy providers (e.g., master’s degree, in‑state or nearby residency).
- Efforts to remove people deemed ineligible from Medicaid rolls.
- Increased oversight targeting fraud and waste.
- Debate over oversight changes: Democrats criticized some provisions as politically motivated—particularly shifting $500,000 to the Republican‑led state auditor’s office instead of the Democratic attorney general’s office, which traditionally handles Medicaid fraud investigations.
- Long‑term concerns: GOP leaders argue Medicaid’s rapid growth threatens the state budget if not reined in. Democrats counter that some oversight changes reflect partisan power struggles rather than policy needs.
NC GOVERNOR’S BUDGET TARGETS TAX CUTS, VOUCHERS
North Carolina’s General Assembly returned for its short session as Gov. Josh Stein unveiled a new, wide‑ranging budget proposal—his third since taking office and his most detailed yet. Because lawmakers never passed a budget in 2025, Stein’s plan arrives at a moment when the state is overdue for major spending decisions. He emphasized that strengthening public education must be the state’s top priority if North Carolina wants to sustain long‑term economic growth.
Stein’s proposal includes substantial raises and bonuses for state employees. He is calling for a total 15% raise for law enforcement officers, nurses, correctional officers, and health technicians - 10% this year and another 5% next year—along with bonuses for officers who complete Basic Law Enforcement Training. Other state employees would receive two 2.5% raises, plus bonuses of $1,000 for all workers and an additional $500 for those earning under $75,000. Retirees would receive two separate 2.5% cost‑of‑living adjustments.
Education is a major focus. Stein wants to raise starting teacher pay to the highest level in the Southeast and restore extra pay for teachers with master’s degrees. He also proposes bonuses for teachers and school staff, with additional support for those earning under $75,000. He criticized the expansion of private‑school vouchers, arguing that the program diverts billions from public schools over the next decade, though he said he does not seek to eliminate it entirely—only to limit its growth. His plan also includes $115 million for school building repairs and renovations.
On taxes, Stein wants to freeze both the individual income tax rate at 3.99% and the corporate income tax rate at 2%, halting scheduled reductions set for 2027. He argues that maintaining current rates would preserve revenue needed for public education. He also proposes a child‑care tax break and restoring the state’s back‑to‑school sales tax holiday.
Stein’s budget seeks more funding for the Division of Motor Vehicles to expand services and wants to create a new Transition Services Division to support military members moving into civilian life.
The News & Observer (Vaughan) 4/21/26
NC LAWMAKERS PUSH PROPERTY TAX LIMITS FORWARD
Last week, a North Carolina House committee approved a proposed constitutional amendment that would restrict how much local governments can increase property tax revenues each year. The amendment sets a hard limit of 3% annual growth unless voters approve a larger increase through a referendum. Supporters argue that the measure is necessary to protect homeowners from steep tax hikes driven by rising property values, especially for people on fixed incomes. Opponents warn that the cap would undermine counties’ and municipalities’ ability to fund essential services such as schools, emergency response, and infrastructure, noting that costs often rise faster than 3%.
The committee backed a separate bill aimed at preventing for‑profit apartment owners from using a tax break that was originally intended only for nonprofit housing providers. By partnering with nonprofit organizations that serve low‑ and moderate‑income residents, the companies are able to claim the nonprofits’ tax‑exempt status even though they operate as profit‑driven landlords. Local governments say this loophole is draining tens of millions of dollars each year from the tax base—money that would normally fund essential public services such as schools, libraries, and public safety.
Lawmakers are expected to consider both measures as the new legislative session begins this week, putting them on the agenda for early debate and potential action.
NC Newsline (Childress & Zhu) 4/21/26
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