North Carolina state government leaders this year are likely to consider important issues including a state budget bill, funding for education and health care (including Medicaid), and various policy issues.
State Budget
Legislators in 2025 did not agree on a two-year biennial budget bill although both houses passed versions of a budget bill in S 257. Although a new budget was not enacted, state spending continued at the level of the prior fiscal year pursuant to the state law (GS 143C-5-4).
Some “mini budget” bills were enacted in 2025 for both Hurricane Helene recovery and some other items. Unresolved important budget issues include funding for Medicaid, education (including educator salaries), and a variety of state agencies.
Gov. Josh Stein continues his advocacy for a budget bill. He has indicated that he will make budget recommendations this spring, potentially as early as March.
The 2026 legislative session is scheduled to begin on April 21. Legislators are eligible to return to Raleigh on March 9 and April 6 if they choose to start work earlier.
Artificial Intelligence
Many state leaders are discussing artificial intelligence (AI), how it should be used, and whether it should be regulated.
Gov. Josh Stein last September appointed an AI Leadership Council to examine these issues and make recommendations about them in 2026. It is co-chaired by Commerce Secretary Lee Lilley and Department of Information Technology (DIT) Secretary Tina Piccione. In addition, DIT is operating an AI Accelerator to test and evaluate AI concepts on state use cases.
A bill (H 934) to regulate deep fake AI ads and address liability issues for AI developers moved through one committee during the 2025 session but has not moved since then.
Veto Overrides
Several bills earlier vetoed by Gov. Stein remain on the legislative calendar for possible override votes. Among those are three bills concerning diversity, equity, and inclusion (DEI): H 171 (DEI in state government), S 227 (DEI in K-12 schools), and S 558 (DEI in higher education).
2026 Elections
Important elections for several offices will be held this year with the primary on March 3 and the General Election on November 3.
At the federal level, the US Senate contest will likely be between former NC Gov. Roy Cooper (D) and former Chair of the Republican National Committee Michael Whatley (R). All 14 US House seats are on the ballot and under new district lines drawn by the General Assembly last year, incumbent Don Davis (D-1st) may face the most challenging reelection.
All 170 legislative seats are at play although given district lines, a relatively small number of them are competitive. Republicans are likely to hold their majority in both houses of the General Assembly with the battle being over whether they will have legislative “super majorities” after the election to be able to override the Governor’s veto of bills. The State Constitution requires a vote of 60 percent of those present and voting to override a veto.
Incumbent Supreme Court Justice Anita Earls (D) faces a challenge from NC House member Sarah Stevens (R), and three Court of Appeals seats are also on the ballot.
For more information, contact a member of the Brooks Pierce Government Affairs Team.
Ed Turlington, Partner
Drew Moretz, Government Relations Advisor
Katelyn Kingsbury, Government Relations Advisor