House Bill 1167 is North Carolina’s proposed Current Operations Appropriations Act for the 2025-2027 biennium, serving as the Governor’s budget bill for fiscal years 2025-2026 and 2026-2027. It sets base appropriations for state departments, universities, K-12 public education, health and human services, transportation, public safety, and other state functions, while also establishing or revising numerous reserve transfers, special funds, and program-specific appropriations. The bill includes detailed spending plans for the General Fund, Highway Fund, Highway Trust Fund, and multiple federal block grants, and it authorizes the use of cash balances, receipts, and certain reserve funds for designated purposes.
A major feature of the bill is its education package. It funds public schools, community colleges, UNC institutions, teacher and principal salary schedules, bonuses, and targeted initiatives such as literacy interventions, school resource officers, school performance grade redesign, exceptional children funding changes, limited English proficiency funding, and meal access incentives. It also restructures several education-related statutes, including repealing the Textbook Commission and replacing it with broader instructional materials provisions, changing charter school and virtual charter school funding rules, and creating or modifying reserves and allotments tied to enrollment growth, instructional materials, and school safety. The bill also expands scholarship and completion assistance programs in higher education, including changes to the Opportunity Scholarship program, Cheatham-White Scholarships, and completion aid at selected UNC institutions.
The bill’s fiscal and policy impact is broad. It appropriates large sums to Medicaid, behavioral health, child care, public health, and social services programs, while also creating new or revised funding mechanisms for hospital assessments, intergovernmental transfers, disaster recovery, NCInnovation clawback funds, and tobacco settlement funds. It changes state law in many areas beyond appropriations, including unemployment insurance benefits, environmental permitting fees, dam inundation map access, solid waste beneficial reuse, state parks fee exemptions for disabled veterans, criminal justice information systems, seized asset reporting, and administrative oversight of directed grants. In practical terms, it would reshape how many state programs are funded and administered, while also imposing new reporting, audit, and compliance requirements on agencies, schools, hospitals, nonprofits, and local governments.
The general sentiment reflected in the bill text is strongly affirmative toward increased spending on core state services, especially education, health care, child care, public safety, and workforce development. The bill emphasizes teacher and administrator pay increases, literacy and school safety initiatives, child care subsidy expansions, Medicaid administration support, and targeted investments in rural health, mental health, and disaster recovery. At the same time, it reflects a strong preference for accountability and control through detailed reporting requirements, spending caps, non-supplant rules, reserve management, and performance-based funding formulas. Because no committee transcripts or votes were provided, there is no recorded public debate in the supplied materials to indicate broader legislative support or opposition.
Notable points of contention likely include the bill’s major policy shifts in public education and school choice, especially the repeal of the textbook commission, the new instructional materials and challenge procedures, the changes to exceptional children funding, the virtual charter school funding rules, and the expanded Opportunity Scholarship accountability provisions. Other potentially controversial provisions include the new Strategic WorkForce Training assessment on employers, the unemployment insurance benefit changes, the hospital assessment and Medicaid financing structure, and the extensive use of directed grants and reserve transfers. The bill also contains several provisions that may draw scrutiny for their impact on local control, nonprofit funding, and the balance between state oversight and agency flexibility.
If enacted, H1167 would substantially amend North Carolina’s appropriations and budget-related statutes for the 2025-2027 biennium. It would set statewide spending levels, direct reserve transfers, and revise numerous statutes governing education, health and human services, transportation, environmental regulation, labor, public safety, and administration. It would also create or modify recurring funding formulas, special reserves, scholarship programs, salary schedules, and reporting requirements affecting state agencies, local school units, universities, hospitals, nonprofits, and employers.