The “bathroom bill” controversy is becoming an issue in North Carolina’s Senate race, where Republican incumbent Richard Burr is up for reelection in November.

The senator’s Democratic challenger, former state legislator Deborah Ross, is making the measure known as HB2 — which requires people to use the bathroom that corresponds to their birth gender, not the gender with which they identify  a major issue in her campaign.

“My reaction to HB2 versus Richard Burr’s reaction is what we’ve been emphasizing,” said Ross, a vehement foe of the measure and the former ACLU director in North Carolina. “Richard Burr has started out by saying it doesn’t discriminate, it’s not a federal issue and it won’t hurt the economy. The answer to that is wrong, wrong, wrong.”

In an interview this week, Ross said the so-called bathroom bill has been “devastating” for the North Carolina economy, citing PayPal’s decision to scrap plans to open operations in Charlotte that would have added 400 jobs.

“It’s not just PayPal, but the long-term effects of things like the film industry in Wilmington, which just got back on its feet,” Ross said.”People were coming back, but now they’re going. The talent drain in this state is going to be enormous.”

Ross said she has spoken to business leaders and donors recently who indicated they may shift their support away from Republicans over this issue.

“HB2 has made some people more active and willing to give, but I’m enjoying widespread support with or without it,” she said.

Burr, for his part, this week sidestepped stating his explicit views on the law, instead expressing hope the matter would be resolved by the courts.

“Once issues get into the judicial system, that’s where they need to be decided,” Burr said Tuesday. “I had hoped that everybody could come together and come up with an agreement. If that can’t be done, then now they’ve made a decision to let the courts handle it.”

When asked whether he thinks the law is discriminatory, Burr’s spokeswoman said the senator cannot comment on pending litigation.

“The Governor and the General Assembly have asked a federal judge to determine whether HB2 is discriminatory,” she said. “Since the matter is before the courts, the Senator cannot comment on ongoing litigation.”

The Justice Department and the state of North Carolina counter-sued each other Monday over the law. The federal government says the state is violating federal civil rights law by discriminating against people based on sexual orientation or gender identity; the state is accusing the federal government of overreach and for making a “radical” interpretation of civil rights law.

The law was drafted to overrule a recent Charlotte city ordinance that allowed transgender people in the state’s largest city to use bathrooms corresponding with their gender identity. HB2 was signed into law in March by North Carolina’s Republican Gov. Pat McCrory, and immediately drew a fierce backlash from civil rights and business groups that say it discriminates against transgender people.

Some observers believe the North Carolina Senate race is becoming increasingly competitive given that Donald Trump will lead the Republican ticket. Many analysts, including some Republicans, fear that Trump’s controversial brand of politics will hurt vulnerable Senate Republicans and expand the Senate map to include more senators like Burr that were previously thought to be safe.

Although it’s still early, a PPP poll released on April 27 showed Burr leading Ross by a mere four points, 40 to 36 percent. The poll also shows Burr with a 30 percent approval rating, with 39 percent of voters disapproving of the Republican and 31 percent with no opinion of him.

Burr has said he does not think the law will deter businesses from moving to North Carolina, and that the matter is a state, not a federal issue, The News & Observer reported in April. In March, he told ABC 11 in Raleigh that the bill does not discriminate.

The Burr campaign suggested Ross is attempting to deflect attention from her previous position regarding the state’s sex offender registry.

In 1997, while at the ACLU, Ross expressed concerns about legislation that made the North Carolina sex offender registry public online. Although victims’ names remain private, Ross said that because many sex crimes involve family members, she was concerned that publicly naming an offender might inadvertently expose a victim who is a member of the same family. After being elected to the state House, she subsequently voted for bills aimed at improving law enforcement’s ability to track offenders and imposing harsher punishment on sex offenders who abuse children.

“The only reason this is coming up is because Deborah Ross is trying to hide from her record as the chief ACLU lobbyist where she fought against a sex offender registry, putting sex offenders’ rights before the safety of women and children,” said Alex Johnson, a spokesman for Burr’s campaign.

The chief executives of more than 100 companies including Charlotte-based Bank of America, Apple, Facebook, Twitter and Wells Fargo have signed a letter urging the state legislature to repeal HB2. The NBA said it may pull its 2017 All-Star Game out of Charlotte because of the new law.

Ross raised $1.3 million during the first three months of 2016, compared to Burr’s $1.1 million. But Burr maintains a significant overall financial advantage, with $5.8 million cash on hand at end of March, compared to Ross’s $850,000, according to Federal Election Commission filings.

The White House on Thursday said it will not halt federal funding to North Carolina before the dual lawsuits between the administration and North Carolina are resolved.

Mike DeBonis contributed to this report.