NC Budget and Tax Center

Stop-gap spending measure expected before new fiscal year begins next week

State legislators are expected to pass a stop-gap measure today to address the expiration of the current spending plan, which runs through June 30 or next Tuesday. The measure, known formally as a Continuing Resolution, would allow North Carolina to avoid a shutdown and keep state government operating. The measure would give the leadership in the state Senate and House additional time to iron out the stark differences between their respective spending plans and approve a final budget.

Absent the stop-gap spending measure, the governor would only be authorized to spend money on “essential” programs and services.

It is not uncommon for state lawmakers to pass a stop-gap spending measure, which can last as long as they choose. In the recent past, the measures have lasted between two weeks and thirty days. Lawmakers last approved a stop-gap spending measure in 2013. That resolution permitted state agencies to spend up to 95 percent of their authorized budgets from the current fiscal year. The Office of State Budget and Management determined how to trim the other 5 percent. Before that, lawmakers approved the measure three times in 2009.*

If lawmakers miss the deadline at the beginning of the second year of a two-year budget, that budget simply continues unless the governor provides further instructions. That’s what happened last year when Governor McCrory directed budget cuts.

It is unclear what guidelines the current leadership would require in the anticipated continuing resolution.  Revenues are growing slowly in this modest recovery so lawmakers should not consider any further cuts. Rather, it would be better to require state agencies to keep funding steady since current spending is already inadequate across many programs and services. Lawmakers have yet to signal what direction they would take in the expected continuing resolution.

Also on the leadership’s to-do budget list is to formally begin the conference process by appointing “conferees” to negotiate a final budget deal. The governor and his representatives are likely  to be part of that conversation. The final budget agreement will go before each chamber for a final vote and then head off to the governor’s desk. The governor can sign the budget, allow the budget to become law without his signature, or veto the budget. If the legislature is still in session, he has ten days to decide; he has 30 days if the legislature has adjourned.

Learn more about budget calendar in the Budget and Tax Center’s Policy Basic.

*This post was updated to reflect the correct fiscal year.

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