The WNC Desk · North Carolina

What the new state budget does for Western North Carolina

Raleigh's first budget since 2023 puts money into a Medicaid food-and-housing pilot and Helene recovery, and cuts the civil legal aid that fights evictions.

Budget signed July 2026 · Prepared 2026-07-07 · Updated 2026-09-29

Raleigh finally passed a budget. After a year of delay, the General Assembly sent Governor Stein a roughly $34 billion spending plan in July 2026, the state's first full budget since 2023, by veto-proof majorities, and he signed it into law on July 7. Most of it will never reach a headline. But four decisions inside it reach straight into the region's housing, food, and courts. Two put money in. Two take it away.

Housing: little cash, a bet on deregulation

Start with housing, because that is where the region hurts most. By the North Carolina Justice Center's read of the enacted bill, the budget puts only about $10 million in new money into affordable housing statewide, plus a one-time $35 million transfer to the state Housing Finance Agency. It adds nothing recurring to the Housing Trust Fund. It sets aside nothing for rental assistance or eviction prevention. Earlier in the session, a bipartisan House bill had proposed a $50 million affordable-housing fund; what passed came in well under that.

The low number is partly a choice about tools. Instead of a check, the state's main housing move this year was a rule change: the same session barred most local parking minimums, starting in January 2027, on the theory that cheaper building rules will add more homes than a small fund could. That bet has a case behind it, and it also works on a slower clock. On the spending side, for a region still short tens of thousands of homes after Helene, this budget is close to standing still.^†

Food and health: a door unlocked, not yet open

On food and health, the budget unlocks a door it had shut. The Healthy Opportunities Pilot, which lets Medicaid pay for non-medical needs like food and stable housing, is funded to restart at about $25 million: roughly $9 million in state money drawing down about $16 million in federal match. The program has been suspended since July 2025. As of early September 2026, the state had not told the organizations that lead the pilot in each region when it would pay out the $25 million. Nor had it told them exactly which services the money would fund. The pilot is not a shot in the dark. A UNC evaluation of its first 32 months estimated that, even after paying for the food, housing, and transportation help and the cost of running it, Medicaid spent about $164 a month less per enrollee than it would have without the pilot. That figure leaves out about $70 million spent building the program's capacity; counting that, the evaluators found the pilot period roughly broke even. The restart's $9 million in state money is well short of the roughly $80 million in state money the program asked for. But the evidence says the program's savings covered its running costs. Before the pause, the program was serving about 14,000 people in the western counties. Impact Health, which leads it there, expects the new money to restart the program but not to bring it back to that scale before the next state budget.

The harder food number is one the budget only begins to face. The 2025 federal law can make states pay part of SNAP's benefit costs for the first time, and how much North Carolina owes depends on its payment error rate. The legislature's fiscal analysts put the state's share for the first year at about $150 million, at the error rate the state posted for the year ending September 2025. At the top rate, NC Health News calculated, it could run as high as $420 million a year. But this budget does not make it go away. It passes the cost down. If the state's payment error rate leaves it owing a share, then starting October 1, 2027 the state recovers that share from the counties by withholding a slice of their sales-tax revenue: a flat 0.75 percent from every county, plus more from the counties whose own errors drove the bill.

The courtroom: a quiet cut

Now the part that quietly takes money away. For more than forty years, the interest on lawyers' trust accounts, known as IOLTA, paid for civil legal aid: the lawyers who fight evictions, foreclosures, and domestic-violence cases for people who cannot afford one. This budget closes new IOLTA money to civil legal aid. Of the interest received on or after July 1, 2025, the act allows grants only to the state's Office of Indigent Defense Services, for its Private Assigned Counsel Fund, and caps them at $15 million a year, with anything above the cap held for the same fund the next year. Unspent balances received before that date can go only to programs designed to improve the administration of justice that the program's board proposes and the state Supreme Court approves each year, no more than $2 million a year. The act does not say whether that includes civil legal aid; in past years the program kept those grants apart from its much larger civil legal aid grants. No other state redirects its lawyers' trust interest this way, which makes North Carolina the only state in the nation to send IOLTA money to criminal defense instead of civil legal aid. Lawmakers who backed the change said they had concerns about how the money was being used, that some recipients had engaged in political activity, and that court-appointed lawyers for criminal defendants who cannot afford one, which the state is constitutionally required to provide, were a better use of it. One detail worth noting: the act's own grant rules are a stopgap, not an end date for the cut. They expire when the State Bar's permanent rules take effect, and the act requires the Bar to adopt rules consistent with it, temporary ones if need be, by November 1, 2026.

Who loses the IOLTA money	Per year
Legal Aid of North Carolina (statewide)	~$6,000,000
Pisgah Legal Services (Western NC)	~$1,900,000

Pisgah Legal's executive director, Jackie Kiger, has put the loss at roughly 15 percent of the group's budget. There is no right to a lawyer in an eviction case, so groups like these are where a family facing an eviction order turns for free legal help.

Helene: a down payment

One more line matters for Western North Carolina. The enacted budget allocates $706.1 million for Helene recovery in the 2026-2027 fiscal year, against the $792 million Governor Stein asked for in March. It is real money. It is also not close to the full repair bill, and much of the largest housing pool for the region, the federal disaster-recovery dollars, sits outside the state budget entirely.

Read the line items and the housing share is smaller than the total suggests. The biggest single piece, $450 million, is not a program. It is the state's share of federal disaster programs, the match that lets federal money be drawn down. What goes into homes directly is $40 million for temporary relocation and $35 million in grants to the volunteer disaster groups doing repair and reconstruction. Asheville has one line of its own, $5 million to rebuild ABCCM's Veterans Restoration Quarters. The gap against the Governor's request falls hardest on infrastructure. He asked for $230 million to close gaps on private roads, bridges and local systems that federal programs do not fully cover, to support local governments, and to strengthen emergency communications. The budget funds private road and bridge repair at $30 million, local government capital grants at $65 million plus a $27 million grant to Madison County, dam safety grants at $20 million and flood gauges at $1.5 million, and carries no Helene line for emergency communications at all.

Some of the money is recycled rather than new. Under a heading the bill calls Transfer of Unused and Underutilized Funds, a companion section moves $151.1 million back into the recovery fund, money earlier Helene packages had already appropriated and the agencies never spent.

What it means for Asheville and Buncombe

Buncombe County sits under every one of these lines. About 29,000 county residents were buying groceries with SNAP in spring 2025, roughly one in nine of us, and because North Carolina runs SNAP through its counties, most of the new administrative cost lands on the county's own budget, with no state money in this budget to cover it. The IOLTA cut has an Asheville address: Pisgah Legal Services, the group that loses about $1.9 million, is the WNC provider whose lawyers fight evictions and protective-order cases across the mountains. Part of the Healthy Opportunities money, when the pilot resumes, flows back to the same region, where the program was serving about 14,000 people before the pause. And the housing math is hardest here, in a county still digging out from Helene, short tens of thousands of homes with little new state money to build them.

The bottom line

Read together, the four decisions pull in two directions. New money for a Medicaid food-and-housing pilot, and a little for affordable housing, far less than the shortage demands. A SNAP bill passed down to the counties from October 2027 if the state's payment error rate leaves it owing a share, and a real cut to the legal aid that stops evictions. Helene recovery gets a down payment on top. A budget is a set of choices. This one held the line on some things and gave ground on others, and the ground it gave is where housing and food insecurity lives.