NC budget passed with raises, tax cuts, Medicaid expansion

North Carolina’s state budget, which spends about $30 billion of taxpayer money, passed the Republican-controlled General Assembly on Friday after a final Senate vote. It passed 26-17, the final vote on a budget that is almost three months late.

Soon after the vote, Democratic Gov. Roy Cooper said he will let the bill become law without his signature, citing Medicaid expansion as the main reason, while also calling it a “bad budget.”

“I will not allow people who are crying for help to wait any longer, so I am directing our Department of Health and Human Services to begin today the process for expanding Medicaid while allowing this budget to become law without my signature,” Cooper said in an emailed statement Friday morning.

The Republican-supermajority legislature’s budget bill includes an average 7% raise for state employees, non-certified school employees and teachers over the next two years, The News & Observer previously reported. School bus drivers, which have had a critical shortage this year, will get an additional 2% raise, bringing their raise to 9%. Also getting higher raises are most State Highway Patrol officers, at about 11%. Raises will be retroactive to the start of the fiscal year, which was July 1.

The passage of the budget, House Bill 259, means that Medicaid expansion, a longtime priority of Democrats, and recently many Republicans, will come to North Carolina once it becomes law.

Cooper has long pushed for Medicaid expansion, which extends health care coverage to hundreds of thousands of North Carolinians.

At a Sept. 19, 2023 press conference in Raleigh, NC, North Carolina Senate leader Phil Berger and House Speaker Tim Moore announced that they had reached a deal on the state budget.
At a Sept. 19, 2023 press conference in Raleigh, NC, North Carolina Senate leader Phil Berger and House Speaker Tim Moore announced that they had reached a deal on the state budget. Robert Willett

Sen. Brent Jackson, an Autryville Republican and top budget writer, was the only Republican to speak on the bill Friday, noting that the senators had extensive debate during its previous vote on Thursday.

Sen. Graig Meyer, an Orange County Democrat, criticized the budget during floor debate on Friday, particularly the expansion of powers for the Joint Legislative Commission on Government Operations, known as Gov Ops, and exempting state legislators from state public records law. In the budget, lawmakers will get to decide what’s a public record.

The budget passed its final vote in the House soon after midnight on Friday morning, with all Republicans and a few Democrats in favor.

It also includes tax cuts, including reducing the personal income tax rate to 3.99% by 2025. The rate could drop to 2.49% if revenue collection goals are met. For certain corporations, the budget lowers the franchise tax, or fees paid to do business. North Carolina’s corporate income tax rates are already set to drop to zero by 2030.

Republicans have a supermajority in both the House and Senate, so if Cooper vetoed the budget, they have enough votes to overturn his veto.

The governor has 10 days to take action on the budget by either signing it, vetoing it, or letting it become law without his signature as the 10 days’ deadline expires, the latter of which he plans to do.

“Health insurance for 600,000 more North Carolinians that brings more mental health and substance use disorder treatment, help for desperate rural hospitals and billions of dollars into our economy is a life-saving, monumental decision for our state,” Cooper said Friday.

“Make no mistake, overall this is a bad budget that seriously shortchanges our schools, prioritizes power grabs, keeps shady backroom deals secret and blatantly violates the constitution, and many of its provisions will face legal action,” he continued.

“However, we must recognize this irresponsible legislature’s decade of refusal to expand Medicaid, which has caused life and death situations for so many North Carolinians and threatened the very existence of numerous rural hospitals,” he said.

Luciana Perez Uribe Guinassi and Avi Bajpai contributed to this story.

This story was originally published September 22, 2023, 10:27 AM.

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Dawn Baumgartner Vaughan is the Capitol Bureau Chief for The News & Observer, leading coverage of the legislative and executive branches in North Carolina with a focus on the governor, General Assembly leadership and state budget. She has received the McClatchy President’s Award, N.C. Open Government Coalition Sunshine Award and several North Carolina Press Association awards, including for politics and investigative reporting.

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