Click on a bubble to learn how different aspects of life in NC are affected by the budget standstill.
Budget
State employees
Education
Health care
Taxes
Infra-structure
DMV
Police and courts
Budget
North Carolina is more than eight months into the current fiscal year without an enacted state budget, the only state in the country in that position. Republicans in the legislature are in the middle of a prolonged stalemate, largely because of disagreements about tax rates.
The state continues operating without a budget because of a law that allows for ongoing spending at last year’s levels. But that approach freezes key decisions about a wide range of policies, and leaves state employees like teachers without raises or cost-of-living adjustments they may have expected.
State employees
More than 70,000 state employees - including teachers, correctional officers, social workers and others - are still getting paid, but did not get the raises they would have received if lawmakers passed a budget.
Teachers and some other state employees got step raises based on their experience if they qualified for them, but some have resorted to drastic measures to pay their bills, as WUNC reported.
Read more on teachers, From WUNC: With rising healthcare costs and no raise, this NC teacher's family sells scrap metal and plasma
Read more on health and human services employees, From ABC 11: NCDHHS employees set to demand higher pay from lawmakers
Education
Local school systems have to deal with only modest budget increases, even as enrollment increases significantly in many districts. Without a state budget, some districts like Wake County are making cuts to deal with the uncertainty WRAL reported,
The lack of a budget has also been linked to closures of some child care facilities. This fall, more child care programs closed than opened in North Carolina for the first time in years, WUNC reported.
Health care
In October, the state Department of Health and Human Services cut reimbursement rates for health care providers who see patients with Medicaid, citing a massive budget shortfall.
Health providers sued and Gov. Josh Stein’s administration reversed the cuts in December.
However, lawmakers are bracing for deep cuts to Medicaid at the federal level. President Trump’s “One Big Beautiful Bill” slashes about $50 billion from the program in North Carolina over the next 10 years, according to NCDHHS.
Meanwhile, NC Health News reported nonprofits that distribute food are not getting additional funding, which can force them to reduce staff.
Taxes
The main sticking point continues to be scheduled tax cuts. North Carolina’s income tax rate is expected to fall from 4.5% for 2025 to 4.25% for 2026, and eventually as low as 2.49% if the state meets certain revenue targets.
Senate leaders want to accelerate the timeline for those cuts. House Republicans are concerned about locking in future cuts, especially as federal funding for programs like Medicaid becomes less certain.
Infrastructure
As NC Local has reported, projects that depend on fresh legislative approval can not move forward without action from lawmakers. That includes school construction grants, water and sewer upgrades, and community college capital projects.
Without a state budget, cities and counties can not break ground or even finalize contracts for some projects, meaning they need to delay road repairs or infrastructure expansions that they expected to move forward this fiscal year.
DMV
In November, leaders with the North Carolina Division of Motor Vehicles unveiled a five-year plan aimed at cutting average wait times to 15 minutes by 2030. Wait times at the DMV were notoriously long, .
But without a budget, future staffing increases and raises for DMV workers remain uncertain. For driver’s license examiners, that could mean heavier workloads and more frustration from waiting customers.
Police and courts
Law enforcement officers are among those who have not gotten raises because of the budget stalemate. State lawmakers passed the Back the Blue Pay Act to give them pay boosts, but the bill stalled last fall amid disagreements over the larger budget.
Meanwhile, state budgets often include funding for the court system, including money for more prosecutors, public defenders, court staff and technology upgrades. Courts and law enforcement agencies are operating largely at the previous year’s funding levels while caseloads keep growing. More than 1.2 million cases are pending in NC Courts as of March 4.
