2019 Fiscal Year State Budget, Commentary, NC Budget and Tax Center

Legislative leaders refuse to engage with counteroffer on the table, risk community well-being statewide

Legislative leaders have failed to engage with the Governor’s counteroffer after his veto of a budget that continues to cut taxes for big companies while failing to invest in our children’s education, our workers’ opportunities for training, and our community’s infrastructure to protect our air and water.

Senator Berger and Speaker Moore seem to believe that inaction on a two-year spending plan for the state and even leaving town without a budget is perfectly acceptable since the state can operate under a provision in state statute that Republican leaders established a few years ago that sets out the spending rules when no agreement be reached between the legislative and executive branches.

And yet North Carolinians and communities across the state know that there is nothing acceptable about their inaction in the face of the responsibility they have been given to steward our tax dollars and support our collective well-being.

The failure to follow a budget process that seeks to negotiate priorities in the face of mounting community needs is a dangerous practice to engage in.  As has been evidenced with the use of federal shutdowns, the breakdown of the budget making process allows for problematic decision-making that is often ad-hoc, is beholden to special interests and a small segment of the legislative body, and ignores the responsibility of elected leadership to come to agreement on where to invest taxpayer dollars.

As the days and weeks drag on without engagement with the Governor’s counteroffer, legislative leaders will be forced to confront increasingly challenging budget issues. Stop-gap spending bills that have made their way through the Senate and House respectively can’t possibly address these challenges in a comprehensive and thoughtful way.

There will be no ignoring the need for a state budget as state employees receive their first paychecks without step increases, federal funds languish without the ability to deploy them, schools go back in session and there are more children than there are resources, and their policy choices like Raise the Age or Medicaid transformation require funding for implementation. 

North Carolinians deserve a comprehensive budget that makes clear the choices made (and not made) in laying the foundation of public programs, services, and institutions to ensure North Carolinians can thrive.

Without a budget, there are major implications for state spending this fiscal year:

  • State employees and teachers would be denied promised salary step increases, vacant positions won’t be filled keeping fewer people serving a growing state population, and increased contributions to the state employee retirement will not happen.
  • Neither our schools nor our Medicaid system would receive funding for enrollment growth. Failure to fund enrollment growth results in lower levels of service for all those served by our schools and Medicaid.
  • All projects and programs that had been funded with one-time money will no longer receive funding. This will end several initiatives such as grants for school safety, investments in the community college system to boost industry-recognized credential attainment, and funding for water infrastructure projects and water monitoring that had received continued funding under both the Governor’s and the legislature’s budget proposals.
  • Under the statute, any new federal funds would need to be approved for use by the legislative Committee on Government Operations. Such a limit on how federal dollars can be spent by agencies and the failure to add adequate state funding to sustain a program could delay or even disrupt services. As we have noted in recent analysis of the state’s commitment to early childhood and child care assistance in particular, the swapping out of state appropriations for federal dollars makes the child care program susceptible to disruption when caps are placed on the flow of federal funds and no state appropriations are provided on a recurring basis.

The full range of programming potentially at risk with legislative leaders’ unwillingness to consider the priorities of North Carolinians — health care for their neighbors and quality education and child care for children — makes coming to the table essential. Without a final budget that lays out the priorities of policymakers and ideally matches priorities of North Carolinians, a dangerous precedent will be set and the harm will ripple through communities.


  1. James

    July 29, 2019 at 4:18 pm

    Can you clarify, “contributions to the state employee retirement will not happen.”

    Upon reading the specific legislation (GS 143C-5-4.) to continue with last year’s budget, it says the exact opposite. “The State’s employer contribution rates budgeted for retirement and related benefits for the current fiscal year shall remain the same as they are on June 30 of the prior fiscal year.”

    As a state employee, my July 31 paystub shows my retirement contribution. Please clarify.

  2. Mel Umbarger

    July 31, 2019 at 12:23 pm

    James, thank you for catching that. We have edited it to read: “State employees and teachers would be denied promised salary step increases, vacant positions won’t be filled keeping fewer people serving a growing state population, and increased contributions to the state employee retirement will not happen.”

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