"In my view the entire state budget should not be held up over a single policy disagreement, but that is where we are," said senate leader Phil Berger.
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Medicaid is the point of contention.
Governor Roy Cooper wants to expand the program. He has said he's willing the separate the issue and negotiate a salary increase for teachers and other state employees as part of a mini-budget.
Berger says he wants to do more.
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"As far as teacher compensation is concerned, as far as funding for education is concerned, we are the third highest state in the nation in terms of growth in teacher pay over the past 5 years," he said.
Press secretary Dory MacMillan said a nonpartisan report released last week showed that North Carolina needs to invest another $8 billion to meet its responsibilities on public education.
"Governor Cooper's teacher pay proposal would give teachers roughly $2,500 more on average than the Republican plan, but Republicans refuse to negotiate with him because they'd rather give corporations another tax break than properly fund public schools," said MacMillan.