(The Center Square) – Sen. Phil Berger, president pro tempore since January 2011, begins his last short session leading the chamber advocating fellow Republicans in the North Carolina General Assembly to exercise discipline on tax reduction and spending restraint.
His comments come as the Legislature convenes Tuesday for the short session, the second year of the biennial term. Lawmakers were due to have a state budget enacted July 1; the gavel into session is on the 295th day late.
The proposal of first-term Democratic Gov. Josh Stein was $67.9 billion, both chambers of the General Assembly came in at $65.9 billion, and the Senate and House of Representatives need compromise for their routes to that figure or another.
“Failure to adhere to fundamentals on either front will thwart sustaining progress in our never-ending competition with other states for economic growth, job creation, and a better future for our people,” Berger said.
Berger, R-Rockingham, lost his Republican primary to Rockingham County Sheriff Sam Page in March. He’ll complete his 13th term in lame duck status and make a decision on the next step in a long and distinguished career.
Before he does, lawmakers are pressed to deliver the two-year spending plan.
The speed reducing state income tax for residents is a primary sticking point, as is the level of raises for state employees and funding of Medicaid.
In an email to The Center Square and other outlets March 30, House Speaker Destin Hall put “a fiscally responsible budget” at the top of his priority list. Hall, R-Caldwell, next listed Medicaid waste, fraud and abuse; a limit on property tax increases by local governments via constitutional amendment; strengthened public safety; and additional Helene recovery funding.
He told a capital city broadcaster the budget is “absolutely critical.”
“We have state employees, teachers and law enforcement who need a pay raise, and that’s what the House has been fighting for now during this entire biennium,” he said. “And we want to make sure that they don’t just get pay raises, but they get meaningful pay raises.”
In the fall, the rate was an average of 8.7% for teachers, 2.5% for other state employees. He gave indication those could change; both are as high or higher than the governor and the Senate.
The Senate proposal for teachers is a 3.3% average over the two years, and $3,000 in bonuses. Other general state employees would get a 1.25% raise in 2025-26 and $3,000 bonuses spread over the 2025-26 and 2026-27 years. Law enforcement over two years is significantly higher – 14.4% average for State Bureau of Investigation and Alcohol Law Enforcement officers; 9.2% average for State Highway Patrol; and 8.9% average for correctional officers.
Stein’s latest teacher pay raise is a 5.8% average over two years. Other state employees would average 2.5%; correctional officers, state law enforcement officers, youth counselors, and nurses would get 10%.
Since the landmark 2010 midterms delivered Republicans to majorities in the General Assembly for the first time in 140 years, the state has had remarkable growth in the economy and population. The individual income tax rate of between 6% and 7.75%, dependent on income, is down to 3.99%.
The Senate has sought to go to 3.45% for 2026-27 and speed up to reach 1.99% by 2031. The House wants to continue at the current pace, tied to a formula with revenue, inflation and population growth.
Neither chamber wants to rely on the rainy day fund, also known as the Savings Reserve in the General Fund. With $1.104 billion allocated to the Hurricane Helene Disaster Recovery Fund, it is down to $3.62 billion as of June 30, according to the office of first-term Republican state Auditor Dave Boliek.
In fact, both chambers have expressed desire to allocate that amount back in. Fifteen years ago, the Grand Old Party inherited a budget deficit that ranged between $800 million and $1.2 billion. That’s a nearly $6 billion swing before Helene.
“Circumstances do exist for us to reach an agreement on a comprehensive state budget,” Berger wrote in an opinion piece at his press shop website late last week. “In crafting the state spending plan, we must recognize that the seeds for today’s success – being the No. 1 state for business, Republican voters now outnumbering Democrats, and continued legislative majorities – were planted 15 years ago.
“What we do today will impact North Carolina’s next 15 years.”
