State budget negotiations have fully stopped in North Carolina, just days before the start of the new budget year on July 1. But lawmakers were optimistic Wednesday that they could reach an accord on new hurricane relief funding for western North Carolina before the week is over.

The state Senate and House of Representatives are each led by Republican majorities, which have in recent weeks passed a litany of bills on guns, immigration, transgender issues and diversity rules. But they’ve failed to reach an agreement on how to divvy up the $33 billion state budget — with the two chambers far apart and not budging on high-profile issues ranging from tax cuts to state employee raises and support for an ambitious new children’s hospital.

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And as of Wednesday they had also failed to reach deals on other mini-budget plans that attempted to focus on more niche parts of the budget while avoiding bigger-ticket items.

Rep. Deb Butler, D-New Hanover, remarked on the legislature’s decision to pass numerous bills on social issues, while making no real progress on the budget, during a debate Wednesday over a mini-budget plan to give state workers raises even without a full state budget. That plan passed the House but is unlikely to see the light of day in the Senate.

"Because of that dysfunction, because of that failure to govern, we’re having to do it this way," Butler said. "This is unacceptable. The people of North Carolina should expect better of us. We’ve got one job, and it’s to craft a budget. We haven’t done it."

GOP lawmakers say they haven't been fully at odds. House Speaker Destin Hall told reporters Wednesday night that a new spending deal between the House and Senate, specifically on Hurricane Helene relief for western North Carolina, is expected to be introduced and then quickly passed on Thursday, pending some final deal-making.

"It sounded like we were very close to having something to vote on tomorrow," Hall said Wednesday. "So I don't get out ahead of [those leading the negotiations] to get into details of it yet. But I think we've got a compromise bill ready, to send our next round of Helene funding."

The legislature has already approved $1.6 billion for Helene aid. This next round of funding is expected to be around half a billion more.

No government shutdown

Thursday is expected to be the last day of votes before the legislature takes off much of the rest of the summer for vacation. So while there could be more money flowing for Helene, it will likely still be at least several months before other parts of state government — from schools to prisons to public health efforts — receive their new funds.

Unlike the federal government, North Carolina won't face a government shutdown.

State agencies will be allowed to continue operating at their current levels. Yet while many parts of government won't be affected much, there will be some impacts.

  • Schools, community colleges and public universities that are growing will effectively receive a budget cut, since their funds are enrollment-based.
    • The lack of a budget also means teachers and other state workers won’t be receiving any new raises as the new fiscal year kicks off.
      • Construction plans, road widening projects and other new funding ideas that had been identified for funding in the erstwhile 2025 budget plans also won’t be able to move forward yet.

        After the House passed mini-budget plans of its own on Wednesday for some parts of state government, Hall said his chamber might take up a separate mini-budget the Senate passed this week, sometime later this summer. But the timeline for the full budget appears to still be months off, if one is to be approved at all.

        "Obviously, when you're dealing with enrollment growth for schools, it creates issues for them as well," Hall said of the lack of a budget. "School starts in August most places. So there is that pressure to try to get that part done. Same thing with Medicaid. These state agencies, and school boards, can't print money. Nor can we as the state. So we need to try to get something done on that fairly quickly."