North Carolina was the only state that didn’t pass a budget in 2025. Now, it won’t have a budget until at least April as Republicans and Democrats in the state legislature remain in a stalemate over tax cuts. Among other consequences, this means the state Medicaid program will see a budget shortfall of $319 million.
The legislature came back to session on Jan. 12, but the House and Senate sessions lasted less than two minutes each. House Speaker Destin Hall (R-87) and Senate President Pro Tempore Phil Berger (R-30) weren’t present, dashing hope of a quick resolution to the budget fight.
Berger supports an extension of tax cuts for North Carolinians, but others in the General Assembly are concerned by the potential of a budget deficit.
“I think comprehensive budget talk is not going to result in a comprehensive budget until maybe the short session,” Berger said during a recent interview on the show “State Lines.” “We’ll see when we get back in April whether or not it does. The Senate is really determined that we promised people a tax cut, and that tax cut ought to take place.”
Rep. Rodney Pierce (D-Halifax) said he was disappointed by North Carolina’s continued lack of a budget.
“We’re ready to work,” Pierce said for WUNC. “But we don’t control the calendar. We don’t control the agenda. We don’t control budget negotiations… It’s just sad and a shame that we’re the only state in the country that doesn’t have a budget, and the fact that we may not get one until after the primaries.”
In response to the budget crisis, Gov. Josh Stein recently announced that he would roll back the Medicaid rate reductions he proposed two months ago.
“The legislature forced these cuts onto the program,” Stein stated, noting the spending measure the legislature passed this summer was insufficient to fund the rate reductions. “It was absolutely nothing that the department or I wanted to have happen.”
In another issue arising from this budget issue, the Sun Bucks program, which helped to feed almost 1.1 million kids in North Carolina in its first year, is facing a budget shortfall as Gov. Stein requests funds from the General Assembly.
North Carolina used philanthropic money to fund the program in its inaugural year, but it hoped to receive an appropriation from the General Assembly of $5 million to fund it this year. Because of the budget stalemate in 2025 and now, Gov. Stein will have to wait longer to see if he can get the money for the program.
“The state shouldn’t have to scramble each year to make sure that our children are not hungry in the summertime. So I urge the General Assembly to include SUN Bucks in the recurring budget for the summer of 2027 and beyond,” Stein said.
For now, North Carolinians will have to wait until April for a potential budget, as consequences cascade for several state programs over budget shortfalls.
