NC House Speaker: The House is holding the line for a better budget

North Carolinians deserve straight talk about our state budget. Both the House and Senate know we must get it done. The real question is whether we’ll deliver a budget that actually meets our state’s needs. Here’s the situation.

Unlike Washington, D.C., where the federal government shuts down whenever Congress stalls, our laws keep North Carolina operating at the previous budget’s levels until a new one is passed. Schools remain open, agencies keep running, and state employees continue receiving paychecks. This year, the General Assembly passed several budget bills to cover essential needs, including increased school allotments for higher enrollment and guaranteed step increases for teachers and state employees.

But we all know more must be done. Families are stretched thin, and our teachers, public servants, and law enforcement officers have waited long enough for the meaningful raises they need to keep up. Passing a responsible budget is how we meet their needs while keeping our state on solid footing.

That brings us to the core challenge of the budget: under current law, North Carolina’s income tax drops to 3.99% in 2026, a cut both chambers support as part of the conservative reforms that helped make us America’s top state for business.

But in 2023, the General Assembly adopted a new policy: when the state hits certain revenue triggers, income taxes automatically drop another half-percent below 3.99% for each trigger hit.

When that policy passed, President Biden had fifteen months left in office. During that time, Bidenflation soared, and our state’s population continued to grow at one of the fastest rates in the country. As a result, the 2023 revenue triggers no longer make sense. Independent forecasts now warn of deficits as early as 2027. Some say those projections are too pessimistic, and I agree. But for North Carolina to avoid major problems, they would have to be more inaccurate than they have ever been. That’s not a risk any fiscal conservative should take.

After adopting this year’s mini-budgets, the state has about $549 million in recurring funds left to cover a multitude of priorities. That would make it difficult to give teachers and state employers more than roughly a 2% salary increase. That is simply unacceptable to the Republican-led House.

That’s the fiscal cliff the House is working to avoid. Our friends in the Senate, so far, haven’t put forward a plan that closes that gap. That’s the honest difference between us, and it’s significant.

Still, the House and Senate agree on most major priorities. We’re united on disaster relief for communities hit by storms like Hurricane Helene, improving DMV services, investing in infrastructure and transportation, and much more. 

Where the House plan diverges from both the Senate and the governor is in how to strengthen education long term. North Carolina’s future requires an all-of-the-above strategy: expanding school choice while also making North Carolina a leader in public school teacher salaries in the South. The House plan is the only one that accomplishes both. Gov. Josh Stein wants teacher raises similar to the House but opposes school choice. The Senate rightly supports school choice but doesn’t fund the raises we need to stay competitive.

We believe in both robust school choice and strong public schools. The House budget delivers 8.7% raises over the biennium, boosting starting teacher pay to the top in the Southeast, while fully funding opportunity scholarships so families can choose the education that’s best for their children.

The House proposal extends our commitment to the entire public workforce. Law enforcement receives an average 13% raise plus bonuses, state employees receive 2.5% raises, and retirees receive cost-of-living bonuses—higher than Gov. Stein’s proposals. And we pair these investments with aggressive efforts to eliminate waste, fraud, and abuse in state government.

The vast majority of lawmakers agree that our public employees deserve meaningful raises. Funding them responsibly requires a fiscally conservative tax structure that keeps North Carolina attractive to job creators while ensuring dependable revenue for our fast-growing state. Furthermore, business leaders tell me constantly that our tax climate is among the top in the nation, but our real advantage is our workforce, built on decades of smart investment in education, including our community colleges and public universities. We must continue strengthening them.

Healthcare is another point of disagreement, particularly the Senate-backed proposal for a new children’s hospital in Wake County. North Carolina already has world-class children’s hospitals. We’re not opposed to adding another, but we haven’t seen evidence that it’s urgent or cost-justified enough to delay the full budget, not when immediate priorities are stabilizing Medicaid and reversing Gov. Stein’s unnecessary rate cuts, expanding rural health access, and building the healthcare workforce families depend on.

I understand the frustration with the delay. I share it. But the House is fighting to make sure our state remains a beacon for education, business, and family values. Finishing a budget just to say we finished it would be a failure of our duty.

We’re choosing the conservative, responsible path, and I am confident we will get this done. When we do, the budget will reflect the interests of the people we serve. Not the easy shortcuts, but the right choices.

Destin Hall, a Republican, is the speaker of the North Carolina House of Representives and represents House District 87.