NC Council of State to General Assembly: Invest in workforce, pass NC’s overdue budget

NC Secretary of State Elaine Marshall criticizes the legislature’s failure to pass a state budget last year during the Jan. 6, 2026 Council of State meeting. (Photo: NC Council of State livestream)

NC Council of State to General Assembly: Invest in workforce, pass NC’s overdue budget

by Clayton Henkel, NC Newsline
January 6, 2026

Members of the North Carolina Council of State kicked off the new year with a direct message for the General Assembly: Finalize the budget and properly fund state agencies.

Leaders in the House and Senate could not agree on a general operating budget in 2025. With the chambers divided over the state’s planned income tax cuts and how much to increase pay for state workers and teachers, they left town with negotiations in a holding pattern until this year’s short session.

In the meantime, much of state government has been running on a continuation of the 2024 budget. Republican legislative leaders say that level of funding is adequate, but agency heads on both sides of the aisle disagree.

Democratic Secretary of State Elaine Marshall told the governor and other members of the council that more than 172,000 new businesses were created in North Carolina last year, nearly 10,000 more than in 2024.

While the growth has been remarkable, Marshall said on Tuesday, it was disappointing that her calls for additional personnel within the agency have fallen on deaf ears at the legislature.

“I sat at this very seat in August of ’23 asking the General Assembly for help,” said Marshall. “Two years later, that help has still not come. This is now our second year without a new state budget.”

The workload at the Secretary of State’s office has essentially doubled since 2017, yet staffing levels have remained largely unchanged, Marshall said. The agency has implemented technology improvements to manage a flood of new filings, but technology alone cannot solve every issue.

“People are essential,” said Marshall.

State Insurance Commissioner Mike Causey said his agency was understaffed for the amount of work investigators are asked to do. (Photo: NC Council of State livestream)

But Marshall said her employees are the second lowest paid employees in state government.

“We’ve consistently communicated to the General Assembly leadership the need for additional staff positions. While there’s growing awareness on Jones Street, the reality remains that there has been no budget,” she said.

State Insurance Commissioner Mike Causey, a Republican, joined Marshall in criticizing the failure of lawmakers to address the state’s budgetary needs.

Causey said his department’s team of 50 criminal investigators was called to investigate more than 7,600 cases of possible insurance fraud in 2025.

“Last year, these teams made 380 arrests,” said Causey. “We’re still only scratching the surface when it comes to fighting fraud.”

From 2017 to 2025, the Department of Insurance recovered over $76.6 million for people who were victimized by insurance fraud, according to the commissioner.

Governor Josh Stein said the lack of a comprehensive budget is hurting state employees and teachers. (Photo: NC Council of State livestream)

“I don’t think there’s an agency here that couldn’t use more staffing,” said Causey. “But both the Senate and the House, when they came out with their proposed budgets, were asking us as a self-funded agency to cut 20 positions or $2 million from our budget at a time when we need to be adding that many [positions] or more.”

Governor Josh Stein empathized with both agency heads and echoed their call for state legislators to get moving and pass a comprehensive budget that should have been in place last July.

“We have public safety officers who are not paid well. We have teachers who are earning less money on a real basis today than they were a year ago,” lamented Stein.

The governor noted that North Carolina ranks 48th in per-pupil spending and 50th in the country in terms of funding effort of K-12 education.

“These are numbers in which we can take no pride,” said Stein. “The legislature needs to pass a budget. I’m at the table ready to get to work whenever they are.”

NC Newsline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. NC Newsline maintains editorial independence. Contact Editor Laura Leslie for questions: info@ncnewsline.com.