Notable Activity
Legislators once again returned to Raleigh for another session to consider legislation, though action was extremely limited due to continued disagreements between the House and Senate over a full state budget. Action primarily revolved around approving new congressional maps and a few competing spending bills with numerous small adjustments. In the end, only the maps, several appointments to various local boards, and a small budget adjustment bill passed both Chambers, with all other legislation stalling. Both the House and the Senate announced that they are unlikely to return to Raleigh to take up any further work until 2026, though they left open the option of returning in late November and mid-December.
Legislative Developments
In a win for counties, Senate Bill 449 – Continuing Budget Operations Part IV included numerous provisions addressing priorities for counties across the state. With most legislation brought to a standstill, this legislation was only one of a few bills to move forward. Sections impacting counties directly include:
Helene Recovery Resources
Part 1 of the bill provided several provisions that would increase flexibility around loan repayment terms and eligibility limits for state-operated loan programs. The NCACC specifically sought flexibility in Section 1.2 for the Local Government Capital Grant Program allowing projects to move forward without a complete FEMA denial. The bill also extends local government permitting exemptions and zoning approvals. NCACC continues to advocate for cashflow options and loan forgiveness, in addition to further recovery resources.
VIPER Network Funding
Section 5.1 of the bill provides funding for the statewide VIPER first responder radio network through the state’s General Fund, instead of being taken from county sales tax revenue as previous legislation had proposed. NCACC advocated that the state-run network should be funded with state dollars instead of from limited county revenue streams.
SBI Funding for Local Government Background Checks
Section 5.7 of the bill allows the State Bureau of Investigation (SBI) to contract with a third-party vendor to conduct fingerprinting and background checks, instead of having to handle them all internally. A bill passed previously this year requires all local governments to perform background checks for new hires who work with children “in any capacity.” Counties raised concerns about the timeliness of background check results, and this legislation will enable the SBI to work through its backlog more quickly and become more responsive to county requests in the future.
State Contribution Rate Increases Delayed
Section 8.1 provides relief for local governments participating in the State Health Plan, which recently received a notice that their employer contribution would increase 2.4% effective July 1. Because the notice was received after the rate increase’s implementation date, affected governments would also owe three months of back pay, in addition to managing the unexpected increase. Section 8.1 of the bill waives the rate increase until July 2026, allowing participating local governments time to plan for the rate increase and budget accordingly. NCACC appreciates the North Carolina League of Municipalities, the North Carolina Treasurer’s office, and other partners for working with counties to provide clarity in the process and to delay the increases to better align with county budget cycles.
This legislation was signed into law by the governor on October 23, 2025.
Other Government Developments
November SNAP Benefits Affected by Shutdown
The U.S. Department of Agriculture, the federal agency that manages SNAP benefits, has provided guidance to the North Carolina Department of Health and Human Services (NCDHHS) that funding for Food and Nutrition Services (FNS) benefits (commonly referred to as SNAP) may not be available beginning November 1. NCDHHS is working with the federal government to obtain information as quickly as possible so the state and counties can share the news with beneficiaries and community partners. Counties can read an NCDHHS letter about the development and visit www.ncdhhs.gov/fns for more information.
Medicaid Rebase Update
Medicaid rebase (the amount of money required to ensure Medicaid expenses are paid as costs rise and enrollment grows during a fiscal year) has become a hot topic at the General Assembly. NCDHHS announced it would reduce provider payments by 3-10% starting October 1 due to a lack of Rebase funding from the General Assembly. Legislative leaders, in turn, believe NCDHHS can fund Medicaid at necessary levels by dipping into contingency funds, which would later be replenished by the General Assembly.
To address the funding issue, the House moved two bills forward this week. House Bill 491 – Medicaid Rebase Funding would have authorized NCDHHS to tap the Medicaid Contingency Reserve for $190 million to fund Medicaid through the end of the fiscal year. Senate Bill 405 – Healthcare Investment Act would have funded Rebase and modified a few other health care programs.
The Senate declined to take up either bill since neither included funding for a potential state children’s hospital, which the Senate wants prioritized. As the General Assembly is not planning to return until 2026, counties and health care providers should not expect relief from rate cuts for several months. NCDHHS will continue to share information with county Department of Social Services (DSS) offices on the continued impact of Medicaid reductions.