Senate approves $5 billion stopgap funding in absence of budget deal

With state budget negotiations at a standstill, the North Carolina Senate on Tuesday passed House Bill 125, a stopgap measure aimed at moving essential funding and policy priorities forward.

House Bill 125 appropriates over $3.4 billion in fiscal year 2025-26 and $1.9 billion in fiscal year 2026-27 to address pressing funding needs across state government, education, health, and disaster recovery programs. The funding bill is a temporary spending solution amid ongoing budget negotiations between the House and Senate.

The new fiscal year starts on July 1, and while a government shutdown does not ensue without a budget deal in place, like at the federal level, it does push off additional appropriations for agencies in need of more resources.

While the Senate’s funding bill passed in a 39-6 vote, with 13 Democrats voting in favor of the bill with all Republicans, Speaker of the House Destin Hall, R-Caldwell, reportedly said the House will not agree to it. Instead, they will bring forward their own mini budget proposal.

“Colleagues, we’re here, as you know, to pass this so-called mini budget because of the failure to agree on a real budget, which, as you all know, is because there’s such significant disagreement between the House and the Senate leadership on various issues,” said Sen. Graig Meyer, D-Wake. “The one that I have been most consistent about in previous debates, and will maintain again today, is that the Senate’s position on upcoming tax cuts are going to put this state in an untenable position to continue to care for North Carolinians in some of their most basic needs.”

Meyer noted that the bill itself does many important things to keep the government going while offering four amendments, all of which were tabled on the Senate floor.

Under the mini budget, education would receive $260 million in 2025-26 and $256 million in 2026-27 to account for public school and community college enrollment growth. The bill also allocates $9.4 million to sustain DPI’s new student information system and other urgent education needs.

In the Health and Human Services section, the bill appropriates nearly $769 million in 2025-26 and $738 million in 2026-27 for items including Medicaid. Agriculture and Economic Resources receives over $389 million in the first year and $152 million in 2026-27.

The budget would also appropriate over $150 million for Justice and Public Safety’s biennium budget. About $40 million would go to the Division of Emergency Management to continue non-federal disaster aid prior to Hurricane Helene.

General Government spending includes $64 million in FY 2025-26 and $12.9 million the following year for immediate budget pressures. Transportation appropriations total over $65 million over the biennium for items including the DMV operations. Statewide, the bill includes $197.6 million for the retirement health plan contribution for state employees and $946 million for previously approved capital projects.

Approving the stopgap funding would allow lawmakers to bypass the current impasse between House and Senate budget leaders. While it stops short of delivering a full biennial budget, HB 125 allows urgent items to move forward while broader negotiations continue behind closed doors.

Still, House leaders have said a month-to-month schedule could continue intothe 2026 short session if they don’t secure a deal before.

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