State lawmakers released a $34 billion budget bill Tuesday morning that comes a full year behind schedule. The House and Senate plan to vote on the spending plan later this week, aiming to get the bill to Gov. Josh Stein's desk by late Thursday.
The 600-page bill includes income tax cuts and state employee raises that lawmakers announced in May. Most state workers will receive a 3% raise along with a bonus of either $1,000 or $1,750, depending on their salary level. Unlike in previous late budgets, the raises will not be retroactive.
Teacher raises would vary based on experience but average about 8%, with the biggest increases for early-career educators.
Scheduled personal income tax cuts would be delayed until 2029 and beyond. The compromise plan to address concerns about a "fiscal cliff" would drop the personal income tax rate from 3.99% to 3.49% from 2027 to 2029, then 3.24% from 2030 to 2032, eventually reaching 2.99% for 2033 and 2034 and 2.49% when revenue triggers are reached after that point.
The raises and tax cuts were a major dispute between House and Senate Republicans over the past year, but even after resolving those issues in mid-May, it took legislative leaders another six weeks to hash out the rest of the budget details and release a bill.
In a news release Tuesday, House Speaker Destin Hall said the budget "delivers historic raises, keeps taxes low, strengthens public safety, and protects taxpayer dollars by making targeted investments to crack down on waste, fraud, and abuse."
The budget bill marks the first time the House and Senate have agreed on a comprehensive spending plan since 2023.
Other new details about the spending plan emerged with Tuesday's budget release, including:
- $700 million in new Helene recovery funding. According to a news release, the latest Helene package includes "grants to support local government capital needs, fire stations and rescue squads, cash-flow loans to local governments, construction of privately owned roads and bridges, wildfire preparedness, dam repairs and efforts to boost tourism to the region."
- New tolls for coastal ferry services that are currently free, a change that will be controversial on the Outer Banks and other coastal communities that rely on ferry routes for commuting and tourism
- $25 million to help reopen the shuttered Martin County hospital in Williamston as an emergency care facility
- More driver's license examiners to address long waits at the Division of Motor Vehicles
- $1 billion in funding for Medicaid cost increases
- $450 million to add to the state's "Rainy Day Fund" for future emergencies
- $208 million for a new children's hospital in Apex operated by UNC Health and Duke Health
- The elimination of vacant positions across numerous state agencies
- A proposal to claw back state funding from local governments that vote down transportation projects after money has been spent — a controversial response to the Charlotte region's recent rejection of an Interstate 77 toll project
- A new legislative confirmation requirement for the governor's appointment to lead the N.C. National Guard
Lawmakers have also inserted other legislation into the budget bill, ranging from new child welfare regulations in response to a child's death from abuse and neglect in Charlotte, to consumer protections for ticket resale websites.
This is a developing story and will be updated.
