This week highlighted deep budget uncertainty at both the state and federal levels: the General Assembly approved limited disaster relief for storms Helene and Chantal but failed to advance a state budget, while Congress is on track for a federal government shutdown on October 1.
Still No State Budget, Shortfall in Medicaid Funding
In a brief return to session this week, the General Assembly passed House Bill 358, providing $65 million in disaster recovery funding for communities affected by Hurricanes Helene and Chantal.
While the additional relief is welcome, it falls far short of North Carolina’s needs. Governor Stein has requested $13.5 billion in federal aid for Helene recovery, yet only 9% of damages have been covered–well below the typical 40–50%. With $60 billion in storm damages and a state budget (previous year) of about $30 billion, North Carolina cannot recover alone. Schools remain unable to fully rebuild classrooms and facilities, while broader community setbacks–like shuttered businesses and strained family incomes–limit access to food, healthcare, and other essentials, impacting the whole child’s academic, social, and physical well-being.
At the same time, lawmakers did not fully address the Medicaid funding shortfall, leaving a $319 million gap against the state’s required $819 million rebase. Without adequate funding, health coverage for over 3 million North Carolinians–many of them children–could be destabilized, potentially increasing absenteeism, preventable illnesses, and untreated health concerns, all of which affect learning and classroom engagement.
The standoff between the House and Senate, with bills passing one chamber but stalling in the other, highlights deep disagreements–particularly over teacher pay and tax cuts–and delays decisions critical to education and healthcare across the state.
Federal Funding Uncertainty
At the federal level, the government is expected to shut down on October 1, as Congress has not passed a budget or continuing resolution.
Several major K-12 programs–Title I, Title II, IDEA, and CTE–are funded through forward appropriations totaling $22 billion nationwide. Districts rely on these allocations to plan staffing, curriculum, and services for the school year. A shutdown would delay October 1 disbursements, forcing schools to postpone programs, reduce instructional supports, or limit enrichment opportunities. As we saw earlier this summer with the sudden withholding of $169 million in federal funds to North Carolina, these disruptions challenge school operations, and without clear funding, districts must make difficult decisions that ultimately leave families and students bearing the consequences of delayed or reduced services.
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