RALEIGH, N.C. (WPTF) – A North Carolina state budget that’s more than 1,000 days late is headed to Governor Stein’s desk. By veto-proof majorities, both Republican majority chambers of the General Assembly gave final approved to the $34 billion plan Thursday (July 2).
North Carolina House Speaker Destin Hall said, “This budget helps North Carolinians keep more of their hard-earned money while making historic investments in the people who serve our communities every day—from teachers and state employees to law enforcement.
“The 2026 Appropriations Act demonstrates that we can deliver tax relief in a responsible way while making historic investments in raises for teachers and law enforcement, efforts to root out fraud in government, ongoing Helene recovery for Western North Carolina, and more. The House fought hard for this budget, and the result is proof that we can keep taxes low, spend wisely, and invest in the priorities that matter most.”
Reaction has been mixed.
“The new budget is good news for Carolina and for higher education across our great state. We’re grateful to our partners in the General Assembly, to President Hans and the entire System Office, and most importantly, to the taxpayers of North Carolina. Every dollar in this budget comes from them,” according to a statement from UNC-Chapel Hill Chancellor Lee Roberts.
This investment arrives as the university leans further into its core priorities: growing enrollment to serve a growing state, building STEM capacity, leading responsibly on artificial intelligence, and advancing long-term physical planning through projects like Carolina North. That work continues alongside Carolina’s efforts to operate as efficiently as possible across campus.
There was criticism from state employee groups, saying the plan didn’t go far enough to meet current needs.
“Legislators love to tell us how well North Carolina’s economy is doing, but this budget looks like the work of a state that’s struggling,” said Ardis Watkins, president of the State Employees Association of North Carolina.”
State employees got no raise last year, while their healthcare costs went up dramatically. This year, most will only get 3% — which doesn’t keep pace with inflation for this year much less makes up for last year.
Retirees get a one-time 2.5% payment, not a permanent cost-of-living adjustment — lawmakers’ own budget documents call it “one-time.” Next year, it’s gone.
Meanwhile, the state is cutting hundreds of positions from agencies whose mission is public health and safety. “
According to State Senate President Pro Tem Phil Berger’s office, highlights of the budget include:
- Sets aside more than $450 million for our state’s Rainy Day Fund, bringing the total up to just over $4.2 billion
- Appropriates more than $700 million for Hurricane Helene relief
- Removes upcoming revenue triggers and locks in a schedule of set Personal Income Tax rate deductions, guaranteeing a rate of 2.99% by 2033, with additional quarter-percent rate reductions based on revenue triggers, to reach a 2.49% rate
- Releases $208.5 million for the N.C. Children’s Hospital from the ARPA Temporary Savings Reserve
- Appropriates $1.6 billion for capital projects for state agencies and UNC System campuses
- Secures funding for the Propel NC workforce-driven funding model to ensure North Carolina’s community colleges are prepared to meet the needs of all students and job creators
- Provides critical funding to maintain North Carolina’s participation in SNAP
- Funds the state’s Medicaid program with an appropriation of over $1 billion
- Funds new Driver License Examiner positions to provide extended weekday and Saturday hours at high-volume driver license offices
- An average 8% raise for teachers and bonuses based on years of service
- Across-the-board 3% increase for all state employees and a bonus based on their salary
- Average 20.3% raise, including step increases, for State Bureau of Investigation and Alcohol Law Enforcement officers and SBI civilian personnel will receive an average of 27.5%
- Average 17.7% raise, with step increases, for State Highway Patrol officers and up to 11.5% for State Highway Patrol civilian personnel
- Correctional officers will receive an average 15.4% salary increase, with step increases
- Probation and Parole officers will receive an average 10.1% salary increase, including steps
- 13% raise for other law enforcement officers across state government — including State Capitol Police
- Funding for a one-time bonus of $1,750 for local law enforcement officers across the state
- Provides funding to ensure students have the foundational mathematics skills to be successful, including $6 million for low-performing schools to have a universal screener, $5 million to pilot and study mathematics tools, $4 million for mathematics training for middle school teachers, and $10 million to develop a standard K-8 math curriculum
- Enhances our state’s literacy instruction by funding $13.8 million for middle school literacy professional development and expanding the early literacy screener to grades 4 and 5
- Supplies funding to improve county SNAP operations, including needed IT enhancements and positions at the DHHS to support counties, to reduce payment error rates and avoid federal penalties that will go into effect next year
- Increases Medicaid reimbursement rates to strengthen the Direct Care workforce serving individuals on the Innovations Waiver and those receiving Medicaid Personal Care Services
- Increases funding for Medicaid program integrity to strengthen oversight, prevent fraud, and ensure taxpayer dollars are well spent
- Provides funds for the DHHS to partner with our state’s Government Data Analytics Center to enhance technology for Medicaid fraud, waste, and abuse prevention and to support recovery efforts
- Strengthens oversight of certain high-growth Medicaid services by requiring health plans to establish closed networks for Peer Support, Research-Based Behavioral Health Treatment (RB-BHT), and Community Support Services
- Repeals the state’s archaic certificate of need laws for inpatient rehabilitation services, facilities, and beds. This will increase competition, expand consumer choice, and help lower healthcare costs for patients, employers, and taxpayers
- Provides an additional $100.8 million from federal block grants to increase childcare subsidy rates to the recommended level from the most recent 2023 Market Rate Study and establishes a statewide rate floor
- Fulfills our commitment to fund the JetZero economic development project at PTI Airport by providing $133.9 million for improvements at the project site
- Provides $12 million to Wilson Community College to support the expansion of the existing construction of a workforce training center
- Supports 10 time-limited capital criminal appeal attorneys to meet the needs of Iryna’s Law
- Funds 24 positions to support investigations and enforcement related to drug crimes, vapor products laws, and other areas of SBI jurisdiction
- Provides $30 million for school safety grants and $300,000 nonrecurring for Behavioral Threat Assessment Management to assist with early detection and prevention of school-based safety threats
- Provides funds for 30 additional positions in the Division of Motor Vehicles to provide compliance and oversight support
Democratic Governor Josh Stein now has 10 days to either sign the budget, veto the budget or let it go into effect without his signature.