When the North Carolina legislature kicked off this year’s session in January, the path forward seemed clear.
The top priority: to send more hurricane aid west, as the mountains recovered from the deadliest storm in state history. And lawmakers had to meet a regular obligation, approving a state budget for the next two years.
But as so often happens on Jones Street, compromise did not come easily.
As the final days of regular business ticked by six months later, the General Assembly found themselves unable to agree on either issue — stuck in closed-door negotiations, bogged down in procedural debate and besieged by angry shrimpers.
A final breakthrough on Helene relief came Thursday — an agreement between the House and Senate to send $500 million to the western mountains.
But Republicans, who maintain strong control of the legislature, failed to find a middle ground on the budget. They left Raleigh without a new deal, and with a gulf wide enough to be branded “philosophical differences” by the Speaker of the House.
“We’re kind of holding tight right now,” Speaker Destin Hall (R-Caldwell) told reporters. “And making sure we’re not spending too much until we get the taxation resolved.”
The session was Hall’s first as speaker, and his fifth overall. He’s waved away questions of productivity and pointed to past budget struggles to say that the current stalemate is nothing new. His counterpart across the building voiced a similar sentiment.
Senate leader Phil Berger (R-Rockingham), in his second decade in the role, was frank in his assessment of where budget negotiations stand.
“I think the whole thing boils down, in many respects, to insistence on the part of the House to try and renegotiate agreements that we’ve made in the past,” Berger told reporters. “And we were not willing to do that.”
Advocates and businesses of the shrimping and seafood industry gathered at the North Carolina Legislative Building to protest a proposed ban on inland trawling. (Photo: Galen Bacharier/NC Newsline)
Advocates and businesses of the shrimping and seafood industry gathered at the North Carolina Legislative Building to protest a proposed ban on inland trawling. (Photo: Galen Bacharier/NC Newsline)
Advocates and businesses of the shrimping and seafood industry gathered at the North Carolina Legislative Building to protest a proposed ban on inland trawling. (Photo: Galen Bacharier/NC Newsline)
North Carolina Sen. Bobby Hanig (R-Currituck) embraces advocates and business owners in the shrimping industry after Republicans pronounced a bill banning inland trawling dead on June 25, 2025. (Photo: Galen Bacharier/NC Newsline)
Meanwhile, budget writers in the House and Senate struggled to find any common ground whatsoever.
It had become apparent in the weeks prior that the chambers’ full budget proposals were too far apart to quickly come to an agreement. So in a last-ditch effort, both chambers began fast-tracking what are commonly called “mini-budgets’: slimmed down spending bills that bridge the gap until a full two-year agreement is reached.
The Senate unveiled a bill that funded key economic development projects, enrollment growth for schools, and an array of other items.
The House promptly rejected it, countering with two bills of its own. One of them would have given teachers and state workers raises, while cutting 20% of state jobs (many of them vacant). Those, too, were dead on arrival in the Senate.
Those salary bumps are one of the key sticking points between the House and Senate. But arguably the most important gap revolves around state income taxes. Berger and Senate Republicans are staunchly opposed to changing a series of gradual cuts to the personal rate over the coming years. Hall and House Republicans have said some adjustment is likely necessary to avoid a budget shortfall.
In the meantime, the government will keep running — despite no budget being agreed to by July 1, when the new fiscal year starts. But new projects will stay in limbo, and teachers and state workers won’t see any raises for now.
“Our teachers, law enforcement, and other state employees deserve real pay raises so we can recruit and retain the best,” Stein said in a statement Thursday evening.
“In addition, at a time when the federal government is proposing severe cuts to Medicaid, leaving Raleigh without taking steps to fully fund North Carolina’s Medicaid program is irresponsible. I stand ready to work with the General Assembly to invest in our people and expand opportunities so every person can succeed.”
The final days’ GOP back-and-forth caused some Democrats to voice their exasperation.
“It’s a shame the other house is led by someone who wants to hold it up,” Rep. Abe Jones (D-Wake) said as the House took a vote on their bill to raise salaries for teachers and state workers. “That we had to break it out of the main budget, and broke this way … what a shame.”
Rep. Mitchell Setzer (R-Catawba), presiding over the House, was less moved.
“It’s been done that way since the beginning of time, sir,” he replied.
Lynn Bonner and Clayton Henkel contributed reporting.
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