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Bill Summary · HB 1039

Bill Summary: HB 1039 (2025 Session) – Constitutional Amendment: No Budget No Pay

Purpose and Intent

  • Create a constitutional requirement that the compensation and allowances for members of the North Carolina General Assembly (NCGA) are withheld if a comprehensive state budget is not ratified by June 30 of a given year. The withholding applies from July 1 until either the budget is ratified or the current legislative term ends, whichever comes first.
  • The amendment aims to incentivize timely budget passage by directly tying lawmakers’ pay to the budget process.

Key Provisions

Section 16 of Article II (Constitutional Rewrite)

  • Current principle: Compensation and allowances for members/officers are set by law, with any increases taking effect at the start of the next regular session after enactment.
  • New provision: If the NCGA fails to ratify a comprehensive budget (for anticipated revenue and proposed expenditures) by June 30 for the ensuing fiscal period, then:
    • The compensation and allowances of NCGA members from July 1 onward become forfeited.
    • Forfeiture lasts until the budget is ratified or until the current legislature’s term ends, whichever occurs first.

Referendum and Certification

  • The amendment is to be presented to voters in the statewide general election on November 3, 2026.
  • Ballot language to be used:
    • “FOR” vs. “AGAINST” a constitutional amendment to disallow the annual salary and other allowances for members of the General Assembly if the General Assembly has not passed a budget by June 30 of a year for a period beginning July 1 and continuing until a budget is ratified or the term of the Legislature ends, whichever occurs first.
  • If a majority of votes are in favor, the amendment is enrolled among permanent records; if against, it has no effect.
  • If certified in favor, the amendment becomes effective upon certification.

Who Is Affected

  • Members of the General Assembly (state senators and representatives) and their compensation/allowances.
  • The mechanism also interacts with the legislative leadership and budgetary processes, since it hinges on the passage and ratification of a comprehensive state budget.

Procedural and Timeline Aspects

  • Effective Date: The measure becomes law only if voters approve in the November 3, 2026 referendum and certification follows.
  • Implementation Trigger: June 30 deadline for budget ratification; July 1 salary withholding begins if no budget is ratified.
  • Duration: Withholding continues from July 1 until the budget is ratified or the end of the legislative term, whichever comes first.

Practical Considerations

  • Potential budgetary impact: The bill imposes a direct consequence (loss of pay) on lawmakers if they fail to pass a budget by the June 30 deadline.
  • Contingencies: If a budget is not ratified before the end of a term, the withholding period could end with the term, potentially affecting only a portion of the fiscal year.
  • Political and governance implications: The proposal emphasizes timely budgeting but could raise questions about the sufficiency of a withholding penalty and exemptions for extraordinary circumstances.

Sponsors

  • Primary Sponsor: Representative Deb Butler
  • Co-sponsors: Lindsey Prather, Allison Dahle, Maria Cervania, Renée Price, Marcia Morey

Summary (Bottom Line)

HB 1039 seeks to constitutionalize a “No Budget, No Pay” rule for North Carolina legislators: if the General Assembly does not ratify a comprehensive budget by June 30, members’ salaries and allowances would be forfeited from July 1 until the budget is approved (or the term ends). The measure requires voter approval in the 2026 general election and, if approved, would take effect upon certification.

Compiled from official sources — confirm details with the bill’s official record.

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