North Carolina budget impasse strains Medicaid, schools, prisons, even the zoo
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The North Carolina legislature is back in session, though the chance of last year's budget ever passing appears to be vanishing.
Why it matters: Medicaid money is running out, Teacher pay hasn't gone up this school year, and state prisons are struggling to pay their bills.
- Other things are falling through the cracks, too, like the zoo being unable to make enough new hires to open its recently completed Asia exhibits.
Catch up quick: Republicans control both the House and Senate, but leaders have been hopelessly deadlocked over the budget, originally due last summer.
- That means the state is operating at spending levels largely agreed upon in 2023.
What they're saying: Senate leader Phil Berger said it's better than shutting the government down, which the federal government routinely does.
Yes, but: That doesn't mean anyone's happy about it, especially Democratic Gov. Josh Stein, who proposed his own budget Tuesday, emphasizing education spending.
- "These other states see what we've got in North Carolina, and they want it, and they are hungry," Stein said Tuesday. "If we don't stay on our toes, they're going to eat our lunch. They're not going to eat our lunch next year, not even in two or three years. But where are we going to be in five years? Where are we going to be in 10 years?"
State of play: Fiscal years start July 1 and end June 30 in North Carolina. Leaders indicated Tuesday that because it's so late in the fiscal year, it makes more sense to focus on passing a budget for 2026-27 than to keep rehashing spending for a fiscal year that's nearly over.
- House Speaker Destin Hall floated the possibility of one-time bonuses instead of retroactive salary increases for teachers and other state workers to make up for the time they've gone without raises.
Between the lines: At issue is whether the state can keep cutting income taxes in the current economy, how big state workers' raises should be, and whether the state should put up more money for a new children's hospital.
What they're saying: Hall projected optimism Tuesday. "We're likely to get a budget done, hopefully sooner rather than later," he told reporters.
- A few minutes later, in another gaggle of reporters down the hall, Berger poured a little cold water on that, saying: "We're not there yet. We're having conversations. They are substantive. They haven't gotten us to an agreement yet."
Zoom in: One place Hall and Berger have reached consensus, both say, is on a $319 million Medicaid spending measure that can be passed immediately.
- Berger said it will contain some policies that seek to rein in Medicaid spending. Hall said one of those provisions will require a state audit.
What's next: Both chambers will be taking votes Wednesday afternoon.