DMV Budget
Two years ago, state lawmakers allowed the N.C. Division of Motor Vehicles to charge fees to cover the cost of processing debit and credit cards. They assumed those fees would generate about $24 million a year for the DMV. But it turns out the fees fell far short of that, on the order of about $13 million a year. Now the General Assembly is planning to cover the shortfall by drawing money from the State Highway Fund, which is used primarily to maintain roads and bridges. The Medicaid funding bill approved by the House last week would shift $21.6 million from the Highway Fund to the DMV.
That includes a one-time move of $8.5 million to make up for the deficit two years ago and a recurring $13.1 million for the shortfall this year and in coming years. The Senate is expected to take up the bill on Tuesday.
There are two primary reasons for the shortfall, said DMV spokesman Marty Homan. The first is that the budget approved by lawmakers in 2024 assumed the DMV would collect 2% of all debit and credit transactions to cover what banks charge for using the cards.
In fact, customers pay that much only for transactions at the DMV’s grocery store kiosks. The fee is 1.85% for online business and 1.22% for transactions completed in person at a DMV office. The other reason for the shortfall is that the DMV has hired private companies to operate its kiosks and online services, and those companies assess and keep their own processing fees that don’t come to the agency.
“Online transaction fees are now charged directly to the customer and don’t flow through to the DMV anymore,” Homan wrote in a text. “What the legislation is doing is basically bringing the budget back in line with what we’re actually collecting today.”
Apprenticeship Growth
Often heralded as the gold standard in work-based learning, registered apprenticeships combine paid, on-the-job training with classroom instruction, culminating in an industry-recognized credential. Apprenticeships can increase earnings for workers, provide a positive return on investment for employers, and help fill critical workforce shortages. Support for expanding apprenticeships is growing at both the state and federal levels and across party lines. In 2025, President Donald Trump set a goal to add 1 million new active apprentices nationwide — as of January, the country was roughly one-third of the way to meeting that goal. In North Carolina, Gov. Josh Stein’s Council on Workforce and Apprenticeships set a goal of doubling the number of registered apprentices as part of a larger set of strategies for improving workforce development. Between 2024 and 2025, the number of active apprentices in the state increased by 5%, up to roughly 10,300. To further support this goal, Stein announced in February that he is directing the state’s discretionary funds under the Workforce Innovation and Opportunity Act (WIOA) to scale pre-apprenticeships in high-demand sectors, reflecting North Carolina’s “big bet” on youth apprenticeships. He also signed an executive order in 2025 to ensure at least 6% of WIOA Title I funds are dedicated to pre-apprenticeships and apprenticeships. But amid this momentum, a funding cliff looms. Without support from the General Assembly this legislative session, ApprenticeshipNC — the state apprenticeship agency designated by the U.S. Department of Labor (DOL) to register and oversee apprenticeship programs — stands to lose 18 staff positions and all marketing and communications capacity. That’s due to DOL grants set to expire in June.
Water Tension
Some state lawmakers want to create an exemption in state law to let Franklin County buy or condemn land in Vance, Warren and Halifax counties — even if those counties don’t agree to it.
The Republican-backed bill, which is scheduled for a vote this week, makes no distinction over what kind of property Franklin County would be allowed to take, or for what reasons. If it passes, opponents say, it’ll set a dangerous precedent in the high-stakes fights over a key resource in this fast-growing state: water.
Nearly all 100 North Carolina counties are currently under severe or extreme drought conditions, leading to cities, including Raleigh, implementing new restrictions on residents’ water usage. It’s a historic drought for North Carolina, WRAL has reported — part of a larger national trend. For the U.S. as a whole, CNN reported, March was the driest month on record since the Dust Bowl in 1934.
But even without the current drought conditions, water is increasingly in focus in North Carolina. It’s not an infinite resource, and every bit of growth requires more water. People need it for their homes and lawns. Businesses need it for everything from bathrooms to massive industrial applications — especially one of the state’s most important industries, pharmaceutical manufacturing.
“Water and sewer are really important for things like life sciences-related business recruitment,” Chris Chung, chief executive of the Economic Development Partnership of North Carolina, told lawmakers last week during a legislative oversight committee meeting.
And as the state’s population continues to grow unevenly — many rural areas have been shrinking even as the big cities and suburbs are exploding in size — the battles between counties over water have grown more pronounced. Franklin County, for instance, projects that over the next 50 years its population will more than double and its water needs will more than triple.
The bill would enable Franklin County to get around its current water-buying arrangement by taking land in Vance, Warren and Halifax counties — three upstream communities that are home to major rivers and lakes, including Kerr Lake, whose water could potentially be shipped south.
Rep. Brian Cohn, D-Granville, said many of the towns and cities north of the Triangle — Oxford, Henderson and Warrenton, among others — get their water from Kerr Lake, a massive and manmade body of water that straddles the Virginia-North Carolina border. Some of the border municipalities co-own a water plant, treating and cleaning water for their own residents’ use, and selling water to communities downstream, including Franklin County. And tensions over control and pricing of the water are nothing new.
“This is like a Hatfield-and-McCoy type of situation,” Cohn said in an interview, referring to the legendary Civil War-era feud between families on the Kentucky-West Virginia border. “It stretches back, probably to the 1970s, among the partners in this water plant.”
Recently, Cohn said, Franklin County has asked to join in the partnership controlling that water plant. That makes sense, he added, given its population boom. Franklin County’s population grew about 35% to 82,000 residents from 2010 to 2025. “All growing communities want to secure their source of water for the future,” Cohn said. “There’s nothing nefarious about that.”
But where he and others have a problem is in the solution being proposed: Rather than having Franklin County work with the neighboring counties who control the water, and work out a deal like in the past, the bill would let Franklin County buy or condemn any land it wants in any of those counties.
Franklin County is open about its intentions. A page on the county’s official website, updated in 2025, declares its search for more water “a generational challenge” and lays out its plan to solve that challenge: “Franklin County’s pursuit of a direct Kerr Lake water intake is the product of years of planning, responsible resource management and good-faith regional engagement.”
The new bill would appear to give it the power to make that plan a reality, even over opposition from the counties Kerr Lake is in.
“It’s very narrowly tailored so that it’s only giving access to water resources to Franklin County,” Rep. Matthew Winslow, a Franklin Republican who supports the plan, said in response to questioning during a House floor debate last week.
The bill language appears to be broader than Winslow’s interpretation. It would allow Franklin County to buy or condemn any piece of land, for any reason, in Vance, Warren and Halifax counties, with no restrictions or limitations.
Cohn said during last week’s House debate that the proposal was “absolutely breathtaking,” not only for its content but for the apparent secrecy involved. The bill was only made public Tuesday night, ahead of a planned vote Wednesday. “They didn't ask for it. They don't want it. These are folks on both sides of the aisle. We ought to make a big deal in this chamber about protecting the rights of local governments and local elected officials. And this goes right into the face of those comments and those positions that we have taken in the past,” Cohn said.
Franklin, Vance, Halifax and Warren counties aren’t the only places in the state warring over water. Leaders in Wilmington and Fayetteville are embroiled in an effort to block the southwestern Wake County suburb of Fuquay-Varina from being allowed to take more water out of the Cape Fear watershed, which also provides the drinking water for southeastern North Carolina. And state lawmakers are also getting involved in that fight.
“Protecting our water is non-negotiable,” Sen. Michael Lee, a Wilmington Republican, wrote this month on social media in a post opposing Fuquay-Varina’s request. He’s one of half a dozen state senators who signed a letter to the state seeking to block Fuquay-Varina’s plans. But Lee voted on Wednesday in favor of the bill allowing Franklin County to take property from its neighbors to circumvent their water source. Every other Republican in the state Senate voted for it, too, except Sen. Norman Sanderson, who represents two of three counties targeted, Halifax and Warren.
Sanderson didn’t respond to a request for comment. But the House member who represents those same two counties, Democratic Rep. Rodney Pierce, heaped praise on Sanderson for being willing to go against his party to stick up for his constituents. He also had heavy criticism for Republicans who pushed the bill ahead. “I'm a history teacher by trade,” Pierce said during debate over the bill on the House floor. “This straight-up sounds like Manifest Destiny. We just say this is what we want in your county, and we take it.”
Winslow, the Franklin County representative who backed the provision, declined an interview request and instead provided a copy of a letter from Franklin County Manager Ryan Prebble defending the proposal. The letter notes that with the amount of businesses moving into Franklin County, efforts to boost growth there could create jobs for residents of the counties targeted by the bill. “Franklin County’s growth benefits the entire region,” the letter said.
However, after the strong opposition from Cohn, Pierce and multiple other Democratic lawmakers on Wednesday, House Speaker Destin Hall made the rare move of pulling the bill from the calendar, delaying a vote until this week.
Cohn said he believes Hall is a pragmatic leader and hopes he heard the point that he and others were making about setting a precedent for other counties to seek the type of special treatment Franklin might receive if this bill becomes law.
“What happens when Raleigh wants water?” Cohn said in an interview. “I can’t imagine anyone’s going to be too excited when Wake County starts asking to take over other counties’ land, or Mecklenburg County, or anyone. That’s what we’re trying to prevent."
Wilmington Rail
The Federal Railroad Administration has given initial approval for a Raleigh-to-Wilmington passenger railroad route, potentially boosting future tourism in Southeastern North Carolina. Connecting Wilmington to Raleigh via passenger rail has been a work in progress at the state level for decades. Beyond providing a public transportation option between the state capital and the Port City, the costly project would put Wilmington on the map. Specifically, the Amtrak Network map, which links all corners of the country through 21,400 miles of railroad. The 134-mile route would add a key coastal stop to the network, with the current closest beach destinations located in Charleston, South Carolina, and Virginia Beach, Virginia. Under the expansion, passengers could travel between Wilmington and over 500 destinations by train. The Wilmington route received initial approval through the Federal Railroad Administration’s Corridor Identification and Development Program, which evaluates routes and determines funding. The federal agency would cover 80% of the route’s $810 million cost, with the remaining 20% funded by state or local governments. Once fully funded, the project is expected to take seven to 12 years to complete.
Stein Budget
The legislature is back, and the governor is making a new budget pitch. Democratic Gov. Josh Stein wants 15% raises for law enforcement and nurses, and starting teacher pay to be the highest in the Southeast.
Stein announced his third, and most comprehensive, budget proposal on Tuesday about an hour before the 170 state lawmakers were to take their seats for the opening day of the General Assembly’s short session. The legislature did not send Stein a budget bill in 2025, so all eyes are on the long-overdue spending plan. Lawmakers had Stein’s proposal on their desks Tuesday morning.
“If we’re going to continue to build on our long-term economic success, we must start by investing in our public schools. Our children truly are our future, so investing in them must be our greatest priority,” Stein told reporters during a news conference at the Albemarle Building in downtown Raleigh.
This latest proposal comes after Stein’s proposals this spring for funding Helene recovery and what he called the state’s “critical needs.”
Here’s what he’s asking for:
Raises and bonuses for state employees, retirees:
- 5% raises, on top of the 10% he pitched in March, for a total 15% raise for law enforcement officers, nurses, correctional officers and health technicians. That breaks down to a 10% raise this current fiscal year, with another 5% in the 2026-2027 fiscal year that begins in July.
- Bonuses for law enforcement who have completed Basic Law Enforcement Training.
- For other state employees, a 2.5% raise now and another 2.5% raise for the fiscal year that begins in July.
- A $1,000 bonus for all state employees, and another $500 bonus for employees with salaries below $75,000.
- For retirees, a 2.5% one-time cost of living adjustment this year and another one next year.
Increasing starting teacher pay, restoring master’s degree pay:
- Raise starting teacher pay to the highest in the Southeast.
- Restore extra pay for teachers who have master’s degrees.
- A $1,000 bonus for teachers and local education employees.
- An additional $500 bonus for teachers and education employees who make less than $75,000 a year.
On Tuesday, Stein criticized Republican-backed spending on private school vouchers, which are called Opportunity Scholarships, and which are funded with taxpayer money.
“If we’re serious about the success of North Carolina’s 1.5 million public school students, we should not be taking money away from them to pay for wealthy parents to send their kids to unaccountable private schools,” he said.
Stein is also proposing spending $115 million from the State Capital and Infrastructure Fund for renovations and repairs for public school buildings.
Stein wants to keep the individual income tax rate at 3.99% and the corporate income tax rate at 2%. Both of those tax rates dropped to their current levels in January and are on track to drop again in 2027.
Stein also wants a child care tax break and to restore North Carolina’s back-to-school sales tax holiday in August.
The governor wants to fully fund Medicaid with $319 million, as he called for in his March $1.4 billion “critical needs” budget proposal, when the legislature was out of session.
Stein’s proposal also calls for increasing services and hours at the Division of Motor Vehicles and creating a Transition Services Division at the Department of Military and Veterans Affairs for members of the military who are becoming civilians.