What happens if North Carolina does not pass a new budget by the June 30 deadline?
By Deanna Sipe
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ASHEVILLE, N.C. (WLOS) — North Carolina is nearing the June 30 deadline for submitting the state’s budget, with only eight days left.
So what happens if lawmakers do not agree on a budget?
Since December 2025, Governor Josh Stein has been urging the General Assembly to pass a state budget.
Many budget plans have been proposed, including the ‘Critical Needs Budget’, which Stein proposed in March. The Critical Needs budget, according to Stein, would address the state’s most urgent priorities as the General Assembly worked to create a full spending plan.
The budget, as previously reported, would target public safety staffing and pay.
Following the ‘Critical Needs Budget,’ State House Speaker Destin Hall and Senate leader Phil Berger proposed a budget in May that would increase teacher pay by 8%, along with a raise for law enforcement and state employees.
The budget presented by Hall and Berger earned a response from Stein, who said in part, “The proposed constitutional amendment would put North Carolina in a financial straitjacket that could wreak havoc on our public schools and public safety.”
Stein also said that Hall and Berger’s proposed budget was only a framework and that it looked good, adding that he needed to see a final product.
“So there were some words in this framework about raising pay for educators and state employees. They looked good, but I really need to see the final product. A one-page framework is not a budget. So let’s see what the final product is. If there are real pay raises for our state employees, that’s a positive step forward,” Stein said.
If a budget is not passed in the next eight days, then according to the State Budget Act, the state will operate under a budget continuation, in which the state works with the same amount of money it operated on the previous year.
According to Stein, this continuation would affect the following:
Teachers and state employees pay Underfund Medicaid Delay agencies’ maintenance, slow services, stall hiring, postpone modernization efforts and delay payments to vendors Contribute to the lack of investment in affordable, accessible child care weakens working families
North Carolina has not passed a budget since 2023, which Stein says is causing strain for North Carolinians, adding that inflation has driven up costs.
“Persistent inflation has driven up the cost of almost everything, from raw materials to contracted services. The state added 326,000 new residents since the 2023 budget was passed. And the federal funding landscape has dramatically shifted for the worse,” Stein said in the Critical Needs Budget proposal.
Tuesday, June 30, is the last day for the state to pass a new budget before going into a continuation.
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