(The Center Square) – Raises tied to the state budget, recovery from Hurricane Helene, and roping in the unknowns of Medicaid are coming soon, says North Carolina’s top Republican in the House of Representatives.
First-term Democratic Gov. Josh Stein is asking the General Assembly for a $792 million investment in Helene recovery. And 13th-term Sen. Phil Berger, left in lame duck status for the legislative short session that begins after Easter, assures policies enacted the last 15 years are working and last week’s revenue forecast will guide upcoming budget negotiations.
Monday was Day 273 since the two-year budget was to be enacted. 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 Monday, 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.
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.
Earlier this month, Stein rolled out a $1.4 billion critical needs budget. He asked for $319 million to fully fund Medicaid, a program Hall says has a 99% renewal rate that suggests “it’s basically impossible to get off Medicaid in this state.”
“We’ve seen billion-dollar cost overruns, and that’s just not acceptable,” Hall said. “It’s a social safety net program. The goal is not to get every person possible on it. We’ve seen places like Minnesota where massive fraud was going on. And we suspect, based on what we’ve seen thus far in this state, that there’s some of that potentially going on here.”
Stein’s Helene recovery package proposed last week says travel, tourism and employment all remain below levels prior to the storm. He also noted the fire dangers, and the state over the weekend instituted a ban on outdoor burns.
Still, both chambers of the General Assembly are expected to favor rolling Helene recovery into the budget. Thus far, more than $1.4 billion has been appropriated in five installments spanning two gubernatorial administrations, and replenishing the Savings Reserve in the General Fund – often called the rainy day fund – has not been ruled out by Hall and Berger.
