Editor’s Note: Ocracoke remains in a wait-and-see position as state lawmakers finalize North Carolina’s budget, with several key issues carrying significant local impact. Funding for the N.C. Ferry Division, N.C. Department of Transportation allocations that could affect N.C. 12 on the Outer Banks, as well as decisions on Medicaid and public school funding, are all under close watch by island residents and officials.
To help keep the community informed, the Ocracoke Observer has partnered with NC Local, expanding its coverage of statewide policy decisions and their potential effects on coastal communities like Ocracoke. Through this collaboration, readers can expect more in-depth reporting on budget developments and other state-level issues that shape life on the island.
By Will Michaels
Senior Reporter for State Issues; NC Local will@nclocal.org
Reminder: every two years, North Carolina lawmakers are supposed to pass a state budget, funding public services from education and health care to roads and public safety. But last year, they did not.
Republican leaders in the state House and Senate have been in a prolonged stalemate, largely over tax rates. They adjourned last fall without a budget and there has not been any movement on one since then. The result? North Carolina is still the only state in the country without a working budget. As this short session gets underway, the question remains whether or not – and how quickly – House and Senate Republicans can come together on their differences.
I reported on how the lack of a state budget affects everyday life last month, but it’s still just as relevant today.
The state continues operating without a budget because of a law that allows for ongoing spending at last year’s levels. But that approach freezes key decisions about a wide range of policies, and leaves state employees like teachers without raises or cost-of-living adjustments they may have expected.
When the state House ended its first day Tuesday afternoon, at least a dozen other reporters and I gathered around Speaker Destin Hall.
“The budget talks continue,” he told us. “And I’m optimistic more so than I have been in the past that we’re going to get a budget done and a good budget.”
Hall did not go into many specifics, except in a question about raises for the more than 70,000 people employed by the state.
Because a budget did not pass last year, state employees did not get their expected salary increases. Hall said the House would strive to “hold folks harmless on salary increases,” but left open the possibility that they might not get raises retroactive to last year.
“That may take the form of somewhat being retroactive. It also may be a onetime bonus to make up for some of that time where the increases weren’t there,” he said.
Some Democratic lawmakers are trying to force a deadline through a bill that would cut off pay for legislators if they don’t pass a budget by the end of the fiscal year (June 30), but it is unlikely to pass.
Another key area of funding in the budget is Medicaid. Higher-than-expected costs mean the program is short by hundreds of millions of dollars, with the state Department of Health and Human Services estimating it will run out of money next month.
So, both the House and Senate advanced House Bill 696 to fund North Carolina’s Medicaid program at least for now. It moves $319 million in reserves to fill the shortfall and keep the program running through this fiscal year.
The bill needs another vote in the House and Senate next week before it goes to Gov. Josh Stein for his signature. If it doesn’t pass, DHHS has warned Medicaid recipients could see a delay, disruption or even denial of benefits. More on Medicaid here.
BY THE NUMBERS 🔢
297: days the 2025-2027 budget is overdue
58: bills filed on Tuesday, the first day of the short session
$319 million: amount lawmakers are moving to fill North Carolina’s Medicaid funding gap
22: the width in feet of the red-carpeted stairs in the legislative building. After the first two years of wear and tear (1963-65), building officials decided to block off the grand staircase, making it purely decorative.
