Governor: 'We’re Not a Poor State, But We Act Like We Are'

North Carolina lawmakers are set to return for the short session beginning Tuesday. Gov. Josh Stein is intensifying pressure on the General Assembly over the state budget, warning that continued delays and planned tax cuts could strain core public services.

Stein argued the state is at a fiscal turning point, citing population growth, inflation, and disaster recovery costs as forces that require immediate budget action. He said the comments to lobbyist podcasters at the Governor's Mansion last week. The podcast was released just days before lawmakers reconvene, placing the governor’s remarks squarely in the opening frame of this year’s negotiations.

“We desperately do need a budget,” Stein said. “We’re the only state that hasn’t had a full budget last year in the whole country, and North Carolina has not had a full budget in two and a half years.”

Republicans have controlled both chambers of the North Carolina General Assembly since 2011, giving them primary authority over the state’s budget process. Stein’s remarks set up a familiar but sharpened standoff heading into the short session, where adjustments to spending priorities, tax policy, and agency funding are expected to dominate debate.

Pressure points: growth, inflation, and recovery costs

Stein framed the state’s fiscal challenges as the result of rapid change rather than isolated policy disputes. He pointed to sustained population growth, inflationary pressures, and recovery from major storms as drivers of increased demand on state services.

“We’ve added 325,000 people… we have experienced 6% to 8% inflation rate. We suffered the worst natural disaster in the state’s history,” Stein said. “All of these are dramatic changes that are having real budgetary impacts that scream for us to react to.”

The governor has frequently tied budget debates to the state’s growth trajectory, arguing that North Carolina’s success in attracting residents and jobs requires proportional investment in infrastructure, public safety, and health care systems.

Tax cuts and long-term revenue concerns

A significant portion of Stein’s critique focused on planned corporate tax reductions, which he argued would reduce future revenue needed to maintain services.

“It’s worth $2 billion in revenue,” he said. “Who gets the benefit of that tax cuts? It’s predominantly the shareholders… about 85% of the tax benefit goes to wealthy people who don’t even live in North Carolina.”

He also warned that the state’s current fiscal path could lead to larger structural gaps in future years if unchanged.

“Two budget years from now, we’re going to have $2.8 billion less… The year after that, it’s $5 billion,” Stein said. “And to imagine that we want to revisit and recreate that scenario when there’s no recession… it makes no sense at all.”

At one point in the interview, Stein offered a blunt assessment of the state’s approach to public spending: “We are not a poor state, but we’re acting as if we were.”

Public safety and staffing shortages

Stein repeatedly highlighted staffing shortages in public safety agencies, particularly in law enforcement and corrections, as evidence of underinvestment.

“Our troopers… they’re 49th starting trooper pay in the whole country. 49th,” he said. “Our state correctional officers, 49th… we have only half of the correctional officer staff that we need.”

Those figures have become a recurring theme in budget negotiations, with the governor arguing that low compensation contributes to recruitment and retention challenges across agencies responsible for public safety.

Education and Medicaid funding priorities

Education funding remains another central pillar of Stein’s budget message. He tied teacher compensation directly to workforce competitiveness, particularly across the Southeast.

“We need to pay our teachers more… the budget I have proposed will make North Carolina starting teachers the highest pay in the whole Southeast,” he said.

Healthcare funding, particularly Medicaid, was also framed as a non-negotiable priority.

“We have to fully fund Medicaid… If Medicaid breaks, those providers will not be able to make a go of it,” Stein said.

Stein was joined during the interview by Devdutta Sangvai, secretary of the North Carolina Department of Health and Human Services, during a separate public event discussion referenced in the podcast context, where state health funding pressures were also emphasized.

Bipartisan rhetoric amid legislative divide

Despite his criticism of current fiscal policy, Stein emphasized a preference for bipartisan negotiation, acknowledging that compromise is necessary in a divided political environment.

“It’s just a belief that you work on tough issues together to try to get to a better place,” he said. “You can actually have differences of opinion and still be civil and still be respectful.”

Still, his comments made clear that agreement will require concessions from all sides.

“The system is designed for dialogue… and then compromise,” Stein said.

Economic strength vs. budget uncertainty

Stein also pointed to North Carolina’s recent economic performance as evidence of both opportunity and risk. He argued that strong growth should not be undermined by fiscal instability.

“All these great things… are at risk if we do not get our financial house in order,” he said.

He cited job creation and in-migration trends as signs of strength.

“We added more jobs than any state in the country in the last quarter… More people moved to North Carolina… than any other state,” Stein said.

Short session set to begin

As lawmakers return to Raleigh, Stein’s remarks function as both a policy outline and a political message aimed at shaping the opening phase of negotiations.

The governor’s framing centers on a basic choice: continue with planned tax reductions and limited budget adjustments, or redirect resources toward what he describes as foundational public services, including education, health care, and public safety.

“The budget has to value people’s public safety. It has to strengthen public education. And it has to ensure folks can access health care,” Stein said.

How that message is received in the North Carolina General Assembly will likely define the tone of the short session as lawmakers confront competing priorities and long-range fiscal projections.