As budget talks stall, NC Senate comes up with a funding stopgap — for now
AI-generated summary reviewed by our newsroom.
- Senate Republicans filed a stopgap bill to fund state operations amid budget gridlock.
- The bill allocates funds for DMV hiring, Poe Hall cleanup and health pilot programs.
- In separate $2.5B Helene aid bill, Senate omits business grants, citing legal constraints.
North Carolina Senate lawmakers on Monday transformed a bill about the state star into a 44-page measure that funds agencies and programs, as budget talks with the House remain stalled.
Senators also unveiled more aid for Western North Carolina, in a bill they approved unanimously just hours after its introduction.
The spending bill, drafted by Republicans who control both chambers of the legislature, was introduced at about 4:30 p.m. during an Appropriations Committee meeting. House Bill 125 previously had been a symbolic measure making the Moravian star the official state star of North Carolina.
Republicans offered an additional amendment to adjust community-college enrollment projections, among other changes. That was approved.
Budget negotiations between the House and Senate have stalled, and any hope of passing a budget by the end of June has dissipated, as previously reported by The News & Observer. Failure to pass a budget by the deadline is common in North Carolina.
The House and Senate, both controlled by Republicans, have spent weeks at odds over the budget, mainly over key spending issues such as tax cuts, raises and major projects, including a planned children’s hospital.
Tax cuts, raises and the major projects causing debate were not included in the Senate’s spending bill released Monday.
Among other provisions, HB 125 allocates $1.2 million in the coming year and $3 million the following year to the struggling Division of Motor Vehicles for 61 new DMV driver’s license examiner positions, with the goal of cutting wait times. It provides $5 million for assessing the cost of rebuilding or replacing NC State University’s Poe Hall, which was found to have contamination from toxic PCBs, or polychlorinated biphenyls.
The bill transfers $1.14 billion to a savings reserve. It also provides $30 million in the first year of the budget to continue the Healthy Opportunities Pilots program in the counties where it’s currently running, using Medicaid money to address needs like food and housing. Funding for the HOP program was not included in either the Senate budget approved in April or the House budget approved in May.
When asked whether Sen. Graig Meyer, a Democrat from Chapel Hill, could offer additional amendments, Sen. Brent Jackson, an Autryville Republican and chairman of the committee, said no and that he should “save it for the floor.” Meyer replied, “It’ll be a fun day when it gets there.” Jackson replied, “That should be tonight.”
Asked about the bill by The News & Observer, Sen. Ralph Hise, a Spruce Pine Republican, said he did not view it as what is known as a mini-budget bill — “which is where we make decisions.”
“This is merely looking at the continuing resolution and recognizing that on July 1 we will be under the continuing resolution. What are the things we need to make sure we continue to see state government operate as intended?” he said.
A continuing resolution keeps state government funded and operating when the state legislature fails to pass a budget. State government doesn’t shut down like the federal government would under such circumstances. Instead, it keeps spending at the level of previous years until a budget is passed.
According to a summary of the bill, it keeps in place how salaries are set for state workers under parts of the 2023 budget law. The bill would let certain state employees and public school staff keep getting their scheduled raises, step increases, and bonuses — including extra pay for teachers and principals — while the temporary budget is in place.
Hise told reporters after the committee meeting that instead of running separate bills for different state agencies, the overhaul of the bill was aimed at filling areas that need addressing because a budget isn’t coming any time soon: ”We know it’s going to be a while before that comes to fruition.”
Asked whether the House would support the bill, Hise said, “House members and others have received copies of both.”
Helene bill
During the appropriations committee meeting, senators also unveiled a reworked version of a House bill to aid recovery in Western North Carolina.
The Senate’s version of the bill comes almost exactly a month after the House passed House Bill 1012, which details how the House would like to spend an additional $464 million on Helene recovery efforts.
Democratic Josh Stein urged lawmakers earlier this year to provide in his $891 million spending plan for Helene. The state so far has appropriated about $1.4 billion in Helene recovery funding through multiple bills passed in late 2024 and 2025.
Hise, who represents various mountain counties, said the reworked version of HB 1012 would provide more than $2.5 billion in aid for Helene recovery.
Of that money, $465 million would come from a state Helene reserve fund and $685 million from federal funds. That federal funding would go to the state’s Department of Environmental Quality for water quality and local water systems.
Of the millions in HB 1012, big-ticket spending items include:
$100 million for cash-flow loans to local governments, provided via a program administered by the state treasurer.
$221 million to North Carolina Emergency Management. Of that, $75 million are for repairs to private roads and bridges and $70 million to continue covering the FEMA state match.
Notably missing from the Senate’s proposal are grants for small businesses affected by Helene. The House bill included $60 million in small business disaster grants for businesses that lost at least 20% of revenue. Business owners have sought this aid for months, and Democrats have strongly pushed for it.
Hise said the provision was excluded due to a state constitutional ban on private emoluments, or private gain. He said that the state cannot give funds to private individuals or businesses without receiving something in return.
Hise plans to introduce a constitutional amendment this week to create an exemption for the private emolument clause. This would need voter approval. He said the proposal he’s working on would be for the question to appear on the primary election ballot.
“Aid to private business is one of the largest needs we have in Western North Carolina. It is extremely important that we support these small businesses,” he said.
Sen. Julie Mayfield — an Asheville Democrat — questioned during floor debate why a private railroad company could receive state funds and not other businesses. One million dollars is set aside to Great Smoky Mountains Railroad, LLC, for recovery and repair.
Multiple Democrats object to a provision in the bill that takes money from a road program to obtain extra money to be used for Helene aid.
Sen. Val Applewhite, a Fayetteville Democrat, spoke against the move, which says that Powell Bill funds shall only be allocated to municipalities with a population of less than 150,000. Funding under the Powell Bill program is used to resurface municipal streets as well as to maintain, repair, build or widen streets, bridges and drainage areas.
Fayetteville has just over 200,000 people.
In Cumberland County, “we’re a high poverty, high distress county,“ Applewhite said. “Removing this critical funding now will jeopardize our ability to proceed with urgently needed street maintenance and infrastructure improvements projects that are already planned and prioritized.”
At one point, it seemed likely the Helene bill could be tied up in budget negotiations, which would have delayed aid.
When asked about Helene negotiations on June 11, Senate leader Phil Berger told The News & Observer the budget and Helene were “all wrapped up together.” But on Tuesday Berger said the Senate would move a Helene bill separately.
Meanwhile, House Speaker Destin Hall said Wednesday that he and Berger had talked and he expected a Helene bill this week or in July.
“But I think we’re relatively close to getting the next round of Helene relief passed,” he said.
Senate Minority Leader Sydney Batch told reporters after the Senate vote that she found it “unfortunate” that Senate Republicans opted to replace the House bill. “We are now likely going to be in a situation where nothing gets done in the next two months,” said.
“We are recessing at the end of this week, not coming back for quite a while, and meanwhile, all of our Western North Carolinians and neighbors are going to continue to suffer,” she said.
Hise said Monday that the House likes some parts of the new bill and dislikes others.
“This isn’t the bill that fixes everything. This is our next step in the process,” Hise said.
This story was originally published June 23, 2025 at 5:52 PM.
CORRECTION: An earlier version of this article misspelled Sen. Graig Meyer’s name.
