North Carolina Gov. Josh Stein put forward a new spending plan Tuesday as lawmakers returned to Raleigh. The budget proposal marks a new entry point for his negotiations with Republicans who lead the General Assembly.
Here are four things to know:
Teacher Raises
Stein proposed raising teacher pay by an average of 11% over two fiscal years, including a 30% increase for starting teachers.
Starting teacher pay would rise from the current salary of $41,000 to $53,120. Teachers making less than $75,000 would get a $1,500 bonus, while higher-earning educators would get a $1,000 bonus. The governor’s budget also calls for a $300 school supply stipend per teacher.
Stein’s request for starting teacher pay is now higher than the $50,000 proposal last year from House Republicans, which itself was much higher than the Senate’s proposed starting salary of $41,510.
Asked how he can bridge a nearly $12,000 gap among the proposals, Stein replied: “Through patience.”
The governor declined to say whether he supports a mass teacher strike that the North Carolina Association of Educators is organizing in Raleigh on May 1, which has already prompted some school districts to announce closures.
“I want every kid to be in a classroom every day,” Stein said. “The way that we do that is by making teaching the attractive profession that we all want it to be.”
Tax Cuts
Stein called for freezing the personal income tax rate at 3.99% and the corporate income tax rate at 2%.
Estimates from nonpartisan budget analysts last month show the state is on track to hit its next two revenue targets, which would drop the personal tax rate to 2.99% in 2028 under current law. House Republicans have proposed freezing that rate at 3.99% through 2027 unless the state hit a more ambitious revenue target. Senate leaders want to move forward with tax cuts.
Meanwhile, the corporate income tax rate will phase out altogether by 2030.
There were several tax cuts Stein said he’d support. He called for restoring the back-to-school sales tax holiday, increasing the standard personal income tax deduction, creating a tax credit to give low and middle-income families $350 in average savings, and a tax credit to help offset child care costs.
Other Raises
Stein’s budget proposal would give a 10% salary increase for the current fiscal year and an additional 5% raise for 2026-27 for state public safety and law enforcement officers.
Probation and parole officers and juvenile court counselors would see a 6.5% raise this year and an additional 3.25% raise next year.
The spending plan includes a 2.5% raise for state workers in each of the next two fiscal years, with additional bonuses of $1,000 to $1,500. His plan also sets aside a one-time adjustment of 2.5% each year for retirees.
Cutting Back
Stein’s budget calls for a savings of $9 million annually by eliminating state government positions that have been vacant for three years, with exceptions for openings in health, safety, and corrections roles.
He also proposes clawing back $500 million from NCInnovation, a nonprofit that supports and tries to commercialize university research. He would redirect the funds to the State Emergency Response and Disaster Relief Fund. Last year’s Senate budget called to maintain $100 million in funding for NCInnovation, while the House favored a full repeal.