Senate leader Phil Berger and Speaker of the House Destin Hall have started meeting for the first time since May.
During recent conversations with reporters, both Berger and Hall have said progress is being made but expressed some pessimism that they will be able to pass a budget during the week of June 15, a date leaders had long circled.
"I'm not optimistic that we'll have something to release next week. I continue to feel that we should be on track to get a budget done before the end of the month," Berger told reporters on Wednesday.
Berger and Hall announced an agreement in early May on a range of high-level budget matters, including a plan that would see the state's income tax rate reduced over the coming years; raises for state employees and teachers; and funding for a planned children's hospital.
The General Assembly has not passed a comprehensive state budget since 2023, with state government functions continuing at the spending levels outlined in that plan.
Republican lawmakers remained optimistic this week that a full agreement is coming, insisting that slow but steady progress is taking place outside of the public's eye.
"There's not really any holdups. The items that we flagged are minor and potentially easy to resolve, but we need the two corner offices to be aware of (them)," said Rep. Donny Lambeth, R-Forsyth, a House budget writer, referring to Berger and Hall.
Wednesday morning, Lambeth said, House budget writers had spent four hours poring over the document only to make two changes, one of which was a spelling mistake.
Berger said that he and Hall have a number of matters to discuss. Those include how much money to put in the state's rainy day fund for use in the event of a disaster and whether to give the NC Innovation effort to help university researchers bring their projects to market.
"I'm not aware of any issue that I perceive to be unresolvable," Berger said Wednesday.
Legislative Democrats have insisted that any further delay in a finished budget is unacceptable, pointing to rising inflation rates; high vacancy rates in key state agencies like state prisons and State Highway Patrol; and rising premiums for employees who are on the State Health Plan.
"For nearly three years, the people running this legislature have made a choice every single day to prioritize their own political agenda over the basic functions of your government. And I know you have felt it in your paycheck, in your premiums, in your kids' classroom, in your communities," Senate Minority Leader Sydney Batch, D-Wake, said during a Thursday morning press conference.
Batch noted that she and other Democrats have not been part of budget conversations, arguing that even most rank-and-file Republicans have not played an active role in shaping the spending plan.
Helene relief, ABA policy to be added
Most subject matter groups have presented to budget chairs, Lambeth told the N.C. Newsroom on Wednesday.
Areas that are still outstanding include how to spend $90 million North Carolina is set to receive from the opioid settlement in the 2026-27 fiscal year, Hurricane Helene recovery and policy around applied behavior analysis (ABA) therapy for people with autism.
The state's package for Helene relief will be part of the larger budget, Lambeth said, instead of a standalone effort. Part of that is the timing of legislation during the short session, with committees starting to slow down ahead of lawmakers going home for much of the summer and fall.
"They've got to move pretty quickly to get through their committees and get into law and then get signed by the governor. We're running out of time," Lambeth said.
The ABA therapy issue has received increased scrutiny in North Carolina, with State Auditor Dave Boliek probing Medicaid reimbursements for the program. In 2021, ABA providers billed North Carolina's Medicaid program about $6 million, increasing to $660 million by 2025.
The General Assembly put some guardrails around the therapy in House Bill 696, which also funded Medicaid for the rest of the 2025-2026 fiscal year.
That included a requirement that any therapy plan that would see someone in service for more than 16 hours per week would need to be approved by N.C. Department of Health and Human Services officials or an insurer. Under the bill, such therapy plans need to be updated and reapproved monthly.
"We're getting a lot of feedback on that 16-hour provision, and we're going to meet to try to resolve some of those issues," Lambeth said.
Lambeth also said that his long-standing effort to designate the Moravian cookie as North Carolina's official state cookie will be in the final conference report, as will a study on rising health costs in North Carolina.
