Senator Murdock Votes No...But Why???

On July 7th, Governor Josh Stein signed the state budget into law.

This budget was 367 days late. The majority party took over a year to draft this, while your rent went up, your groceries went up, your health insurance went up, and every single bill you pay went up. And after all that time, this is what they finally handed you: a budget that simply doesn't meet the moment we are in.

My caucus and I received the budget at the same time as the public, Tuesday at 10 AM on June 30th, and we were given 24 hours to digest a 634-page bill and cast the first vote on it Wednesday, July 1st.

In order to vote in good judgment, I dived deep and found some good parts, but also really bad and ugly aspects.

I break those down for you below and explain why I ultimately voted no.

THE GOOD PARTS

Helene Recovery:

• The budget provides over $700 million in additional relief funding for Western NC Hurricane Helene recovery efforts.

Medicaid Fully Funded:

• The budget fully funds Medicaid for this year. It provides $1 billion for rising costs in NC Medicaid. This program provides health insurance for more than 3 million low-income residents, their children, and people with disabilities.

Salary Increases & Bonuses for State Workers, Teachers, and Law Enforcement:

• The budget includes a 3% raise for all state employees, an average 8% raise for teachers, and up to a 17% raise for some law enforcement officials.

• It also provides $1750 bonuses for state employees making less than 65k and $1000 for those making 65k or more.

• Provides the largest starting teacher pay raise in nearly 50 years, raising starting pay to 48k from 41k.

• Also provides one-time bonuses of $1,000 for teachers with 16 or more years of experience and $500 for teachers with 15 or less years of experience.

NC Community Schools Model:

• The budget appropriates $3 million to sustain and expand the NC Community Schools Model.

• It connects students, families, educators, and community members to bring together the services and resources for students to thrive.

Public School Reinvestment:

• The budget directs $35.8 million in voucher-related savings back to public schools for staff bonuses, literacy training, and a new K-8 math curriculum.

Refunding for Healthy Opportunities Pilot (HOP):

• The budget gives $25 million ($9 million in state funds and $16 million in federal funds) to resume HOP. HOP provides food, housing, and transportation services in rural areas to improve their health.

• This program was suspended in July 2025 because of the lack in state funding, but the new funds allow it to resume.

Increase in Childcare Subsidies:

• DHHS was awarded $100.8 million in federal block grants for subsidized childcare. These funds will go towards increasing provider reimbursement rates, setting a minimum statewide rate and reducing waitlists.

• The statewide rate is a positive because it means childcare facilities will receive at least the statewide average rate for subsidized care, rather than varying from county to county.

SNAP Fixes:

• The budget provides $12 million in ongoing funds to DHHS and a $52 million increase in county SNAP administration costs after changes in federal funding rules under H.R. 1.

Data Centers:

• The budget also eliminates tax exemptions for data centers' electricity use.

• Sales tax exemptions remain for all other supplies, including software, and the value of sales tax exemptions on supplies is much larger than those on electricity.

Creates a Report on Recommendations for a Plan to Improve Maternal and Infant Levels of Care in NC:

• NCDHHS is required by April 1, 2027, to deliver a stakeholder-informed plan recommending updates to maternal and neonatal levels of care, aligned with national clinical guidelines.

• Aimed at reducing statewide maternal and infant mortality.

Investments:

• Makes meaningful investments in community colleges, the DMV, childcare, cybersecurity, a new veteran's home, clean drinking water, and summer food programs.

THE BAD PARTS

State Employees Still Struggle:

• One-time bonuses are not tax exempt.

• The budget slashes more than 1,000 state government positions, making it harder for us to meet the people's health and safety needs.

• Many state employees' raises don't even keep up with inflation, and even the meaningful raises that are in the budget still leave us lagging behind our neighbors in competitive salaries.

Teacher Sustainability:

• Schools are losing teachers at a faster rate than gaining them; the budget falls short of solving retention challenges.

• When adjusted for inflation, the new starting teacher salary remains below what beginning teachers earned a decade ago.

• Bonuses provided do not address the root problem; teachers in NC often struggle to make ends meet.

Increase Funding for Private School Vouchers:

• The budget increases funding for the Opportunity Scholarship Program (private school vouchers) to $705 million in 2026-2027, with funding expected to exceed $800 million annually by 2030. While it made a $104.6 million reduction in public school funding due to enrollment drop.

Fails to Place Kids Over Corporations:

• The budget increases public education funding by 4.6%. However, after accounting for inflation, state funding per student remains about 1% lower than it was before the recession.

• After nearly two decades of falling behind, NC still ranks dead last in the nation in school funding effort.

• This budget provides working teachers a few hundred more dollars a month and hands billionaires and corporations millions of dollars every year, forever, because it cuts the corporate tax rate again, marching toward zero corporate taxes by 2030.

NC Pre-K Funding Remains Flat:

• Although the childcare subsidy rate rose, NC Pre-K funding remained flat at $78.5M, with no new seats despite statewide waiting lists.

NCCU Fails to Receive Funding for Critical Infrastructure:

• NCCU did receive $123.1 million in UNC System State Capital Infrastructure (SCIF) funds.

• Still, these were previously authorized, and the funds are restricted to state-supported buildings, so they cannot address critical support-facility needs.

• The University failed to receive its $100 million request in this budget for a new project to fund critical repairs to residence halls, dining facilities, and other auxiliary buildings. These repairs remain underfunded under current allocations and cannot be repaired with SCIF funds.

THE REALLY UGLY PARTS

Veteran Teachers Left Behind:

• The budget gives a large pay bump for starting teachers, but veteran teachers barely get anything.

• Teachers with 25 years of experience get a raise of less than 6%, bringing their yearly pay to $59,000.

• They get no back pay for the years already worked, even though previous budgets have paid teachers retroactively.

Retirees' Cost of Living Adjustment Forgotten Again:

• The budget provides a one-time cost-of-living supplement equal to 2.5% of their annual retirement allowance for retirees in the teachers and state employees' retirement system.

• Not only is 2.5% too small, but it also isn't a permanent raise.

• Retirees haven't seen a permanent cost-of-living adjustment since 2017 and are now grappling with inflation on fixed incomes that haven't kept up.

Anti-DEI Provisions:

• The DHHS Office of Health Equity is eliminated, ending the state's commitment to closing racial and economic health disparities.

• The DOT Office of Civil Rights has been eliminated, removing federal civil rights oversight on transportation projects.

• DEI ban certification deadlines (Sept. 1, 2026) are embedded in the budget for both K-12 and higher education, fast-tracking the elimination of diversity, equity, and inclusion programs.

• The Office for Historically Underutilized Businesses in the Department of Administration was abolished, eliminating 12 jobs.

• For more than 25 years, the office has promoted opportunities for minority businesses from across NC to compete for state and local government contracts.

• The budget also quietly repealed a mentoring program for minority male students in the N.C. Community Colleges System office.

Targeting Civil Legal Groups:

• Provisions ban the NC State Bar from giving money to civil legal groups. The budget targets the NC Bar’s Interest on Lawyers' Trust Accounts (IOLTA) program. Ultimately banning the NC State Bar from giving money to civil legal groups such as Legal Aid.

• This budget provision cuts over $12 million in annual, non-taxpayer revenue used by nonprofits to provide free civil legal services for low-income North Carolinians by redirecting nearly all of IOLTA dollars to criminal defense for indigent people who cannot afford a lawyer. While indigent public defense is important, civil legal services for low-income individuals are also important.

• The provision blocks future funding for any civil-legal groups that help immigrants, transgender people, or engage in any type of issue advocacy.

• It puts grant decisions under a new board of political appointees.

• NC is now the only state in the country to divert all IOLTA funding to public defenders and not civil legal groups, which is bad news for people who need legal help and cannot afford it.

• Overall, this means civil legal services are largely being abandoned, leaving people vulnerable to exploitation.

Bad Tax Policy:

• This budget eliminates the trigger-based income tax cuts and switches over to a mandatory schedule. Personal income taxes (PIT) will drop to 3.49% in 2027, 3.24% in 2030, and 2.99% in 2033.

• Income tax cuts will result in a loss of over $8 billion for public services by 2034. This will weaken the state's ability to guarantee health, safety, and high-quality public services to every resident.

• The cuts sound good, but in reality, most households will receive less than $170 when the PIT rate is cut next year, while the richest 1% of households will receive an average tax cut of over $7,000.

DURHAM COUNTY

The following section provides an overview of funding allocated to Durham public services and the education system.

Durham:

• Chantal Infrastructure Fund ($10.7 million): provides grants to local governments for reimbursement for costs for repair damages to water and wastewater infrastructure damaged by Tropical Storm Chantal.

• Department of Public Instruction will provide $380,000 in continuing annual supplemental funding to Durham Early College Health Sciences.

• The Burroughs Wellcome Fund, a nonprofit in Durham County, receives a grant of $150,000. The nonprofit supports biomedical science research and educational activities

Duke:

• $208,500,000 was allocated to build a new children's hospital in the Triangle area, including a behavioral health hospital.

• Children's Hospital Antitrust Immunity: allows the University of NC system and Duke University to jointly develop and operate a children's health system with immunity from federal and state antitrust laws to expand pediatric care and research without competition law barriers.

North Carolina Central University:

• 98.6 million in continuing base funding

• $900,000 for Cheatham-White Scholarship Program

• $3.3 million in ongoing program-specific funding through the UNC System

• $300,000 in NC Collaborative funding through UNC-Chapel Hill

• $7.3 million in enrollment funding, including $5 million in continuing support and $2.3 million in non-continuing funding

Three Capital Projects

• Edmonds Classroom Building Renovation: $4.5 million in continued funding (total project cost increased to $19.5 million from $13 million).

• Dent Building Comprehensive Renovation: $4.8 million in continued funding (total project cost remains $12.1 million)

• University Theater Renovation: $6.7 million in continued funding (total project cost remains $8.5 million)

UNC State Capital and Infrastructure Fund (SCIF) Funding:

• About $83 million for repairs and renovation to state-supported buildings, including HVAC improvements ($43.3 million allocated for FY 2026-2027)

• Note: SCIF funds cannot be used for residence halls or dining facilities. NCCU did request $100 million in non-SCIF budget funds to address these facility repairs.

Impact:

• Although capital projects and SCIF funding provide additional support, they are previously authorized investments (non-budget allocated funds) designated for specific purposes and cannot be used to meet the needs of NCCU's original $100 million request to the General Assembly. SCIF funds cannot be used to address residence or dining hall concerns.

• As a result, auxiliary facilities (residence and dining halls, etc) remain unfunded with this budget.

CHATHAM COUNTY

The following section provides an overview of funding allocated to Chatham County.

Chantal Infrastructure Fund ($10.7 million)

• The budget provides grants to local governments, including Chatham, for reimbursement of costs for repair of damage to water and wastewater infrastructure caused by Tropical Storm Chantal.

Note: I made several funding requests for Chatham County, such as an upgrade for the Siler City Fire Station and the Goldston Park expansion and repairs, none of which made it into the budget.

MY FINAL VOTE

Although the budget has passed, the bad and ugly aspects packed into it are why I voted no.

I was not the only one; the final vote saw bipartisan no votes in the Senate.

Click Here to Read the Full Budget

https://webservices.ncleg.gov/ViewNewsFile/117/S257-CCSNExr-2%20v78

NC General Assembly | natalie.murdock@ncleg.gov