UPCOMING EVENTS

June 5, 2025

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July 16-July 18, 2025

North Carolina Healthcare Association Summer Meeting

November 13, 2025

Women Lead NC

LEGISLATIVE NEWS

NC HOUSE PASSES BUDGET

North Carolina’s House of Representatives passed the two-year state budget bill (Senate Bill 257) on Wednesday, about four hours before midnight. After 45 amendment attempts, the vote was 93-20, with 27 Democrats supporting it. The new $32 billion budget plan delays income tax cuts while providing modest raises for state workers and increasing college tuition, and starting teacher pay. Minority Leader Robert Reives (D-Chatham) called the GOP plan a “negotiating document” that is better than the Senate's proposal. Reives acknowledged his disagreements with the budget but expressed hope for changes during further discussions.

While Representative Donny Lambeth (R-Forsyth) praised the plan for investing in employees, particularly teachers, Representative Terry Brown (D-Mecklenburg) pointed out poor decisions, such as eliminating vacant state positions instead of filling them. The Senate trims smaller raises and proposes substantial tax cuts favoring wealthier individuals and corporations. Both chambers agree to cut higher education funding, raise tuition, and eliminate minority-targeted state programs. Future budget discussions may see reduced Democratic support.

Some of the key elements of the House budget plan are:

Taxes  

The House's budget plan includes significant tax changes. It proposes lowering the personal income tax rate by 0.25%, raising the standard deduction, introducing a back-to-school sales tax holiday in 2026, and exempting the first $5,000 in tips from taxes. The standard deduction will increase by $500 for singles and $1,000 for married couples, saving them about $20 and $40 a year, respectively, costing the state $126.3 million annually. Analysts warn that state revenues may decline starting in July 2026 if tax reductions continue.

State Job Cuts, Raises

The House plans to cut 3,000 vacant jobs in state government to provide raises for current employees. The state government faces challenges in hiring due to competition with better-paying private sector jobs, with over 14,000 vacancies reported last month. Under the House budget, most state workers would receive at least a 2.5% raise over two years, which is higher than the Senate's proposal for most workers, though the Senate offers larger raises for law enforcement.

Education  

The House budget proposes changes to teacher pay. Starting teacher salaries would increase from $41,000 to $48,000 next year, and then to $50,000 the following year, totaling a 22% raise. This may help attract new teachers during hiring challenges. However, North Carolina's average teacher pay of $58,292 still falls short of the national average of $72,030. The maximum pay for experienced teachers with 25 years would be $57,820 by 2026-2027. The budget would also restore extra pay for teachers with master's degrees.

The House budget aims to double financial aid for future teachers in difficult fields and increase funding for students with disabilities. The bill removes state superintendent and State Board of Education oversight from charter schools, transferring decision-making to the Charter School Review Board. It requires elementary schools to offer arts classes weekly and eliminates class-size limits for growing school systems. Additionally, it increases funding for literacy programs and simplifies hiring school psychologists from other states. The budget also restricts cellphone use during classes and adds instruction on various social issues.

Higher Education

The UNC System would have to cut at least $7 million in vacant jobs and would lose another $3.5 million for graduate student tuition waivers. These savings would go to the general state budget for other spending or tax cuts.

Additionally, the UNC System needs to find $60 million in yearly savings, which may involve layoffs, and $8 million from cutting expenses like construction. Universities must also generate an extra $30 million in revenue by increasing tuition.

The House budget plans to cut over $100 million from funding for a new state children’s hospital, which may lead to a conflict with the Senate. The Senate has proposed an extra $535.5 million for the 500-bed pediatric hospital, a priority for Senate leader Phil Berger. The project, expected to be completed in the early 2030s, is set to create thousands of jobs in the Triangle. Some House Republicans are uneasy about the large funding commitment, but budget writers believe the money will be restored in negotiations.

Elections Board

The House budget adds seven new positions for political appointees in the state elections board, selected by state elections director Sam Hayes, once the top lawyer for House Speaker Destin Hall (R-Caldwell). This approval follows a shift in oversight from Governor Josh Stein to Republican Auditor Dave Boliek. The state elections agency has 65 positions, mainly career employees with election expertise protected from political actions, and the new appointees will work alongside them.

DMV  

The House budget plans to reduce delays at the DMV by opening new offices in Fuquay-Varina, Cabarrus County, and Brunswick County, costing over $10 million in two years. It also proposes over $3 million annually to hire more driving examiners and increase license plate production.

Late Amendment

About eight hours into Wednesday's debate, Republicans introduced an amendment to the budget that made significant changes to over a dozen budget areas. The amendment passed quickly with a 77-36 vote, but no explanation was provided regarding the changes.

One change would require state employees to check the citizenship status of those applying for state aid, aiming to prevent illegal immigrants from receiving benefits, while Democrats argued that some immigrants have U. S. citizen children eligible for aid. Another change sought to reduce transparency regarding donations to nonprofit groups, which supporters say is for privacy, but critics argue increases "dark money" in politics. The amendment also included funding for firefighter benefits and a new unit to address sexual assault cold cases and the opioid crisis.

The budget bill passed its final House vote on Thursday by a vote of 86-20, with 27 Democratic “yes” votes. The bill now goes back to the Senate, leading to negotiations for a unified plan to present to Governor Josh Stein. The goal is to have a budget enacted by July 1, but meeting this deadline has been challenging in recent years due to conflicts among Republicans and with the Democratic governor. GOP negotiations could extend into summer.

GOP leaders in both chambers agree that a law reducing the individual income tax rate from 4.25% to 3.99% in 2026 should remain. However, the House is concerned about potential revenue shortfalls and does not support the Senate's plan to further reduce the tax rate to 3.49% in 2027 and 2.99% in 2028.

The House would also complicate the process of reducing the rate below 3.99% by increasing the revenue thresholds outlined in existing legislation that the state must surpass for the rate to decrease automatically. Conversely, the Senate favors a more assertive threshold, suggesting a timeline that might lower the rate to 1.99% on a future date.

Concerns from Governor Josh Stein highlight that keeping current thresholds may harm revenues, but Senate Republicans and some conservative groups argue that the House's budget might actually increase taxes, with estimates showing over $2 billion more annually.

The national group Club for Growth warned that anyone supporting the House's bill, seen as a tax increase, could face consequences at the ballot box. Despite this, House Republicans remain confident and emphasize that their budget is more fiscally conservative.

Stein supports the House plan over the Senate’s, praising its proposals for teacher pay and tax cuts while criticizing the Senate's revenue plan. After an agreement, Stein can sign, veto, or let the budget pass without his signature.

Democrats gained seats in 2024, weakening the GOP's veto-proof majority, meaning bipartisan support may be needed to override any vetoes. Speaker Hall expressed confidence in getting support from at least one Democrat to override a veto.

Read more by WRAL News

Read more by The Center Square

Read more by Associated Press

HURRICANE HELENE RELIEF BILL

Almost half a billion dollars in relief funding for Hurricane Helene recovery was unanimously approved by the North Carolina House of Representatives on Thursday. This occurred just after the House voted for a separate $33 billion budget plan for state government funding. The House aims to keep the Helene aid separate to prevent delays during the ongoing budget debates between Republicans in the Senate and House, which are expected to focus on tax policy and other issues.

Despite unanimous support for the Helene aid plan, disagreements remain about the funding amount. The House plan is for $450 million, which is only half of the $900 million that Governor Josh Stein stated is needed. Meanwhile, the Senate has proposed a budget of $700 million. The state has already allocated about $1.6 billion for Helene relief, and all state leaders agree that a few hundred million more is necessary.

House Bill 1012 bill includes:

There are potential political conflicts ahead regarding the Helene aid funding. The disagreement is not only over how much money to allocate but also how to spend it. Governor Stein has advocated for small business grants to support local businesses, while GOP leaders have previously expressed concerns over past pandemic-era grants and potential fraud. The House budget includes funding for these grants, with measures in place to reduce fraud, but it remains uncertain if the Senate will agree.

There is also the issue of whether to pass the Helene aid as a separate bill or include it in the state budget. The Senate prefers to combine the aid with the budget, while the House thinks keeping them separate is better for quicker aid distribution.

Stein highlighted the slow federal disaster funding response and stated that the state needs to increase its own aid efforts, criticizing Congressional Republicans and former President Trump for the shortcomings. He noted that while federal funding is trickling in, it falls short of the $19 billion he requested earlier. Although Helene caused $60 billion in damages, the recovery efforts may not fully cover this amount, but local nonprofits have been instrumental in providing assistance, and the approved House budget includes $20 million for them.

Read more by WUNC

Read more by WRAL News

SENATE HEALTHCARE COMMITTEE MODIFIES HEALTHCARE BILLS

On Thursday, the Senate Healthcare Committee substituted the provisions of Senate Bill 316 (Lower Healthcare Costs) for those of House Bill 434 (The CARE FIRST Act). Senate Bill 316 previously passed the Senate on March 27 by a vote of 44 to 2.

Among other things, Senate Bill 316 would do the following:

• Require healthcare facilities to provide good faith estimates and not send unpaid amounts to collections unless a line-item bill has been provided.
• Prohibit facility fees from being charged in many circumstances.
• Require the State Auditor to examine cost and billing transparency at health service facilities.
• Allow insurers to provide utilization review office contact information rather than the name, address, and phone number of the reviewers.
• Eliminate certificate of need review for rehabilitation services, rehabilitation facilities, and rehabilitation beds.

The committee substitute for House Bill 434 will most likely again pass the Senate and be returned to the House for concurrence in the changes the Senate made to House Bill 434. The bill is certainly headed to a conference committee where legislators will attempt to resolve the differences between Senate Bill 316 and House Bill 434.

Read more by North Carolina General Assembly

REINS ACT

A bill aimed at enhancing oversight of costly regulations became stricter on Wednesday. The financial threshold for triggering a review changed from $1 million in a year to $1 million over five years. The Senate Regulatory Reform Committee included a version of the North Carolina REINS Act in a similar bill passed by the House. REINS (Regulations from the Executive in Need of Scrutiny) acts seek to provide more scrutiny of the costs of regulations set by various agencies.

Supporters claim these laws protect taxpayers’ money, while critics argue that those making the rules understand the necessary regulations best. House Bill 402, as approved by the committee, requires a fiscal note for rules impacting $1 million over five years. Such rules must be adopted by a two-thirds vote, while permanent rules costing $10 million over five years need unanimous approval.

Bill sponsor, Senator Steve Jarvis (R-Davidson), highlighted the need for transparency and accountability, whereas Senator Lisa Grafstein (D-Wake) raised concerns about overlooking benefits in cost analysis. The bill was discussed in the committee only, with no vote taken yet.

Read more by State Affairs

CROSSOVER SCORE BOARD

In the lead-up to May 8, North Carolina lawmakers worked hard to meet a deadline known as crossover. Crossover is the day when all bills eligible for consideration in the current and next year must move from one legislative chamber to the other. Bills from the House need to reach the Senate, and vice versa, or they will be discarded, except for certain types like appropriations and election-related bills.

About 20% of the 1,700 bills filed this session made it through crossover. These include measures targeting illegal immigration, increasing gun rights, removing diversity and inclusion programs, and empowering Republican state leaders. Most of the successful bills were sponsored by Republicans. However, some Republican proposals did not gain enough support, such as those banning fluoride in water and establishing North Carolina as a Second Amendment sanctuary. Nonetheless, no bill is completely dead until the session ends. Legislators sometimes use tactics to bypass crossover limits, such as altering existing bills that made it through crossover to include different content.

The bills that crossed over reflect the legislature’s agenda for the next two years, with conservative priorities taking the forefront. Gun-related legislation, in particular, has progressed. Two concerning bills would create lifetime concealed carry permits and eliminate the need for permits altogether. A survey showed that over half of North Carolinians prefer to keep the permit requirement. Critics, including members of gun control groups, argue that removing these safeguards could lead to more gun violence.

Republicans are also promoting national party positions on immigration and diversity initiatives. The proposed North Carolina Border Protection Act would require state law enforcement to work with federal immigration authorities. Other bills aim to check the citizenship status of certain arrested individuals and eliminate DEI programs from government and educational institutions. Additionally, some measures would grant more authority to Republican officials, such as increased access to public fund records.

On the other hand, there were some minor successes for Democrats. Certain bills, such as those banning hemp and vapor products from schools and protecting residents from coercive debt, crossed over with bipartisan support. However, the general landscape after crossover remains predominantly favorable to Republican interests, and many bills will undergo scrutiny and amendments before potentially becoming law.

In terms of bills that did not make crossover, Democrats held a “bill funeral” for numerous proposals that did not advance, including those aimed at firearm storage, combating discrimination, and enshrining rights related to marriage and reproduction in state law. Similarly, several Republican bills, such as those concerning changes to execution methods or bathroom access for transgender individuals, also failed to move forward.

Read more by Carolina Public Press

WHAT WE’RE LISTENING TO

• Under the Dome Podcast
• Do Politics Better Podcast
• WUNC Politics Podcast
• Carolina Newsmakers Podcast
• NC Capitol Wrap Podcast

WHAT WE’RE READING

• Asheville Citizen Times
• Carolina Journal
• Charlotte Observer
• Fayetteville Observer
• Greensboro News & Record
• NC Insider
• New Bern Sun Journal
• News & Observer
• North State Journal
• Our State Magazine 
• Triangle Business Journal
• Under the Dome
• Wilmington Star News 
• Winston-Salem Journal