This year’s state budget process didn’t follow the playbook. In at least one respect, that’s a good thing.
Top House and Senate budget writers were unable to craft a budget deal behind closed doors on Jones Street as spring turned into summer. Eventually, the chambers released competing budget documents. The rest of the General Assembly and the taxpaying public learned top lawmakers’ priorities for the multibillion-dollar spending plan.
That’s how the budget process ought to work.
Let’s recap state budget basics.
Article III, Section 5 of the North Carolina Constitution requires the governor to “prepare and recommend” a budget plan “for the ensuing fiscal period.” In odd-numbered years, the governor presents a two-year budget plan. It’s designed to take effect on July 1 and extend through June 30 two years later.
While the governor offers recommendations, legislators actually write the budget. The House and Senate typically take turns drafting the first legislative budget plan. One chamber unveils its proposal, tweaks it in committees, then votes in public on two separate days. Then the process shifts to the other chamber, which develops its own plan. That plan faces the same public release, committee debate, and votes on two days.
Next, the two chambers subject their competing plans to negotiations involving both a formal conference committee and informal negotiations among top budget writers and between the House speaker and Senate leader.
When legislative leaders and the governor represent different political parties, their priorities often differ more than when one party controls both political branches.
Since Democrat Roy Cooper replaced Republican Pat McCrory in the Executive Mansion in 2017, the governor and top lawmakers have diverged on multiple major budget issues. In some years, the threat of a gubernatorial veto has prompted legislative Republicans to round up as many votes from Democratic colleagues as possible. That task has been less important during the past two years, when Republicans have held veto-proof supermajorities.
With a two-year budget plan in place, lawmakers face no obligation to write a new budget in an even-numbered year like 2024. But they commonly use shorter election-year sessions to tweak the second year of the budget plan. The adjusted plan can account for changes in revenue. It also can help lawmakers address emergencies that arise after the original budget takes effect.
With that background in mind, we focus on the circumstances of this year’s debate.
The current budget took effect in October 2023. That starting point, more than three months into a new budget year, reflected delays that stemmed from leading lawmakers’ disagreements about budget priorities.
As lawmakers prepared for 2024, observers anticipated that the General Assembly might not spend as much time feuding over budget differences. After Cooper submitted his ideas, most budget work this spring took place behind closed doors. It would not have surprised anyone if House and Senate leaders had put forward a single compromise plan for a final vote. Such a plan would have avoided most of the public back-and-forth debate that’s typical for state budgets.
Instead, House and Senate budget negotiations broke down. While House leaders suggested the differences might involve as little as $30 million in a more than $30 billion General Fund spending plan, the Senate’s top officer suggested differences might have been 10 times as large. The two chambers didn’t agree on a bottom-line spending number, let alone details.
Both chambers ended up releasing budget bills. The two plans reflected different priorities for House and Senate Republican leaders. Both spelled out differences with Cooper’s more costly proposals. Supporters, critics, and neutral observers all had a chance to review numbers and policy proposals that otherwise had been confined to private conversations in legislative offices.
None of these plans will become law. Negotiators still lack a compromise that could win support in both chambers. That support would need to be strong enough — three-fifths majorities — to survive a potential Cooper veto.
But placing competing House and Senate priorities on public display serves an important purpose. Legislative Democrats were able to serve their role as the opposition, offering partisan critiques of GOP budget ideas. Activists and interest groups assessed competing budget proposals’ impacts on their favorite causes. Watchdogs scrutinized the documents for spending or policy changes that could produce negative unintended consequences.
This process is typically messy. It’s also transparent. It’s more likely than a closed-door negotiation to expose flaws and miscalculations that could hurt taxpayers in the future.
Stalemate generally produces little good news. But when it prompts lawmakers to shine more light on their spending and policy priorities, fans of good government should celebrate.
Mitch Kokai is senior political analyst for the John Locke Foundation.