The state House approved its version of a biennial budget for state government, and chatter among long-time legislative observers was it represented the most significant difference between the two chambers budget proposals in recent history.  

There was a lot of back and forth criticism leveled by GOP leaders in the House and Senate especially on the issue of taxes, with Senate President Pro Tem Phil Berger characterizing the House proposal as a ‘tax hike’ for North Carolinians. 

The budget bill, SB 257, passed its final vote in the House on Thursday on a 86 to 20 margin, with 25 Democrats joining 61 Republicans. That bipartisan margin of support signals perhaps a greater likelihood that the contents of the House version represent the best chance of encouraging at least one House Democrat to side with Republicans in a veto override vote, should it come to that. 

Republicans currently hold 71 of the 120 seats in the state House, so one short of having the number necessary to override a gubernatorial veto on a party-line vote. In the Senate, the GOP holds 30 of 50 seats, so already have the numbers needed for a veto override in that chamber. 

Swirling around the Legislative Building this week was rampant speculation that all this signals we’re in for protracted negotiations between the GOP leadership of the House and Senate before a final compromise budget proposal is able to be presented to the governor for his signature or veto.  

The consensus opinion expressed is that there will be an initial run at finding a budget middle ground when legislators return after next week (the General Assembly is taking a week break for the Memorial Day holiday), but that effort is unlikely to bear fruit and the legislature will then depart at the end of June looking to come back in September to try again to work through the differences. 

Key difference include: 

• The Senate proposed accelerating tax cuts originally enacted in 2023, the House proposed delaying them.  

• The House proposal includes a 8.7% pay raise for teacher, something that generated praise from Democratic Governor Josh Stein, where the Senate plan calls for a 3.3% increase. 

• More than 8,000 vacant state agency jobs are eliminated by the House, where the Senate only cut 850. 
• The House also cut funding already appropriated for the construction of a state-run Children’s Hospital to be located within the Research Triangle, and took back $500 previous appropriated to NC Innovation, a program favored by Senate leaders.
  

   

Also This Week

The Senate Health Care Committee (IIANC member Senator Jim Burgin is a chair of the committee) met and approved some existing bills that were converted into new bills (called a proposed committee substitute, or PCS) that included language added in from other bills.  

Among those were: 

HB 67, which originally dealt only with conforming language needed to bring NC is line with other states on medical licensing reciprocity, was modified to include other items including expanding the scope of medical practice for nurses and physician assistants, how marriage and family counselors are licensed, and requiring medical facilities to have systems in place to filter any smoke generated by surgical procedures (FULL BILL SUMMARY). 

HB 434, which originally prohibited entirely a health insurance company from requiring prior authorization for medical procedures ordered by a doctor, had that language removed and replaced with provisions that among other things address surprise medical billing, further reduce the type of medical facilities required to obtain a Certificate of Need (CON) before being built, and setting a process for how prior authorization can be utilized by health insurance carriers (FULL BILL SUMMARY). 

Similar ‘composite’ bills dealing with other insurance issues are likely in the coming weeks, but whether or not any of them get passed in the same form by both chambers is yet to be seen – once budget negotiations between the House and Senate begin, everything gets swept into that back-and-forth process including any and all legislation that is still pending. 

The Hurricane Response and Recovery Subcommittee of the Joint House and Senate Commission on Governmental Operations Committee met on Thursday for a presentation from the leadership of GROW NC, Governor Stein’s agency charged with managing the state and federal Hurricane Helene relief money.  

Most notably, the committee had questions about a vendor selected to assist with recovery efforts who a senior advisor to the governor, Johanthan Krebs, worked for prior to joining the administration. 

On a related note, Governor Stein announced earlier this week his recommendation for $891M more in spending for recovery programs for western NC, while the House passed an appropriation for an additional $450M separate from the budget bill – that is likely to also be tied up in the broader budget negotiations between the House and Senate. 

And finally … 

 National Oceanic and Atmospheric Administration (NOAA) issued a revised forecast for the 2025 Hurricane Season that begins June 1st, saying the chances are greater now for an above average number of named storms this year.