NC House Speaker Destin Hall Calls Budget ‘Critical’ Ahead of Short Session

NC House Speaker Destin Hall says passing a state budget remains the House’s top priority as lawmakers return to Raleigh, stressing the need for pay increases, continued tax cuts and tighter control of Medicaid spending.

Hall underscored the importance of reaching a deal with the Senate during the short session, pointing to state employees, teachers and law enforcement officers who have waited for raises in a recent interview.

“It’s absolutely critical. It’s our number one priority in the House. We have state employees, teachers, law enforcement who need a pay raise, and that’s what the House has been fighting for now during this entire biennium. And we want to make sure that they don’t just get pay raises, but they get meaningful pay raises. We know that we’ve seen in the last five years or so a lot of inflation over time. When we last had a comprehensive budget in the fall of 2023, we’ve seen inflation since that time," Hall said. "North Carolina is the third fastest growing state in the country, and so we continue to grow, and we’ve got to make sure that we’re taking care of our employees, our regular state employees and teachers. Our budget proposed an average 8.7% increase for teachers and 2.5% for state employees. Those were generally higher than the governor or the Senate. Now, as we move into the short session, we’ll look to see what makes sense, but we think it’s a matter of making sure we’re staying with the market for our employees and treating them with the respect they deserve.”

Hall said one of the primary sticking points with the Senate remains the pace of income tax cuts and differences over pay raises. While both chambers support continued reductions, he said the House favors a slower approach to avoid risking state revenue.

“The big debate has surrounded our finance or tax package as well as those salary increases. On the issue of taxes, both sides want to continue to cut income taxes in this state. It’s not that we want to stop or freeze those, we want to continue them, but we want to do it at the same pace we’ve been doing for 15 years since Republicans took control in 2010. The Senate plan would go much quicker than that. And the danger in that is that the state’s growth may not keep up with those cuts in a way that we would wind up with deficits," Hall said. "Right now, North Carolina is a destination state. We’ve got a great tax policy and a great business environment—that’s the reason people are moving here in droves. We don’t think we should risk that, and we don’t think we should risk funding for the UNC system or community colleges. We want to continue the same pace that’s worked very well for 15 years. On salaries, we’ve been a little higher than what the Senate wants to do, and again, our case is that we’ve had inflation since 2023 and we need to keep up with the market or we risk losing teachers and state employees to the private sector.”

Hall also addressed uncertainty following the concession of Senate leader Phil Berger, saying leadership changes could play a role but should not derail budget negotiations.

“Perhaps it’s possible, but at the end of the day, whether Senator Berger won or lost, we have to get a budget done. I know my caucus agrees with that, and I know the Senate caucus agrees with that as well. That’s what we’re here to do. One of the biggest jobs we have is passing that budget. Whatever the outcome of that primary, we would have gotten a budget done," Hall said.

Hall explained both chambers have engaged in discussions since the last session, but acknowledged limited movement on key issues.

“We’ve talked a number of times. Our long session was extended as we continued to try to do those things. We’ve made efforts with their leadership to negotiate, particularly on raises and taxes. They haven’t been willing to move on those things. Right now, the remaining issues are largely salary increases. We’ve done budgets on most other things, but we have enough recurring money to only do about a 1.5% or 2% raise, and that’s not something the House is going to settle for," Hall said. "We could dip into savings to pay recurring bills, but just like a family wouldn’t do that, we don’t think the state should either. We’ve made efforts to negotiate, and I hope those efforts will be met as we get into the short session.”

Hall also expressed concern about Medicaid spending, pointing to what he described as significant cost overruns and calling for reforms and greater oversight.

“Medicaid is something that’s been on a lot of people’s minds. We all know we’re going to have to provide additional funding, and that’s not unusual. But right now, we’re told the cost overrun is about a billion dollars. That’s a problem. It’s happening across the country, but it seems to be worse in some states than others," Hall said. "In North Carolina, we have a 99% renewal rate, which is extremely high. Medicaid should be a safety net, not a program where people remain indefinitely if they don’t qualify. We’re looking at the data to find inefficiencies and potential fraud. If improper payments are happening, that’s money that isn’t going to people who truly need it.”

Looking ahead, Hall said lawmakers will also consider a constitutional amendment on property taxes, citing concerns from constituents about rising local tax burdens.

“People are telling us property taxes are out of control. Inflation has increased property values, and in some areas, local governments are increasing spending beyond inflation and population growth. That leads to higher property taxes. People notice that. So we’re looking at ways to address that through a constitutional amendment and other legislation.”

Hall added that public safety and mental health reforms remain a priority, referencing efforts to improve the state’s involuntary commitment process and address violent incidents linked to untreated mental illness.

The NC House is also expected to review additional funding requests for Hurricane Helene recovery efforts, which Hall said will require continued coordination with federal partners and long-term investment.