NCGA mini-budget funds State Health Plan, Medicaid, DMV, JetZero, ed priorities

Amid a busy week packed full of legislative activity, both chambers of the North Carolina General Assembly advanced a “mini-budget” to address immediate state funding needs. Despite the bipartisan momentum, lawmakers remain gridlocked over a final budget nearly a month past the July 1 deadline.

After being passed through the Senate on Tuesday, House Bill 125 received House approval on Wednesday by a 91-23 vote, moving it to Gov. Josh Stein’s desk for final consideration.

Rep. Donny Lambeth, R-Forsyth, introduced the bill.

“Within this report, we address enrollment growth in our schools, funding needs for our State Health Plan, Medicaid growth, and expansion of DMV across several areas of our state to deal with service challenges,” he said.

Education and workforce funding highlighted

Under the bill, more than $1 billion annually from the Education Lottery Fund is allocated to public education, including:

• Pre-K programs, scholarship programs, and transportation needs;
• $104.2 million in recurring appropriations for salary and funding adjustments in public schools;
• $94.9 million to support enrollment growth at community colleges;
• State and public school employees to receive step increases, bonuses, and merit raises during the ongoing budget debates.

Targeted statewide investments included

Beyond education, the bill channels substantial funding toward capital needs and health programs:

• $823.6 million for infrastructure projects across state agencies and universities;
• $600 million for the Medicaid rebase for projected changes in enrollment, service costs, and federal match rates;
• A $252 million investment in Guilford County to develop an aircraft manufacturing site — widely expected to support the JetZero project — with another $198 million planned over four future fiscal years.

Lambeth called the JetZero project a “blockbuster economic development deal.”

“JetZero, the largest project in the nation, will manufacture a new, more efficient aircraft in the Piedmont area, adding an exclamation point to our tagline ‘First in Flight’,” he said.

Oversight and DMV EXPANSION

New oversight measures are established through the Division of Accountability, Value, and Efficiency (DAVE) within the State Auditor’s office. Similar to the federal Department of Government Efficiency (DOGE), the division is tasked with assessing the continued need for each state agency and whether cuts need to be made. The bill provides $6 million and 45 new positions to launch this effort.

State Auditor Dave Boliek celebrated the inclusion of the DAVE Act in a press release.

“I am fully on board with this initiative, and I share the General Assembly’s commitment to better government,” said Boliek.

He emphasized his commitment to serving the people of North Carolina.

“Ultimately, the goal is to make sure the people of North Carolina — who fund the government — are served in an efficient and effective way.”

The mini-budget also allocates funding to significantly expand staffing at the NC Division of Motor Vehicles (DMV):

• The Department of Transportation (DOT) will receive $1.2 million in recurring funds to create 40 new full-time Driver License Examiner I and II positions for FY 2025-2026
• An additional $3 million in recurring funds for 21 more examiner positions for FY 2026-2027.

Lawmakers voice support and concern

During floor debate, Lambeth emphasized that the bill addresses previously discussed priorities, pointing to the JetZero deal and continued Medicaid support.

“Everything else… should not be a surprise, and I ask you to vote green on this conference report,” he told colleagues.

However, Democrats expressed frustration over exclusion from negotiations and criticized program cuts. Rep. Marcia Morey, D-Durham, warned that the Medicaid shortfall would force service reductions.

“We could do better… We should be passing a full budget,” she said.

Rep. Pricey Harrison, D-Guilford, raised environmental concerns, citing $5 million in cuts to the Department of Environmental Quality (DEQ).

“I think this is a problem to short change this very important agency at this time, in addition to the lack of state employee raises — outside of those in the step program — seems very misguided,” she said.

Next steps await governors decision

Now on Gov. Stein’s desk, HB 125 awaits signature. If enacted, it will temporarily sustain state programs while a comprehensive budget remains under negotiation.

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