North Carolina Governor Josh Stein recently rolled out his first full budget proposal — a $67.9 billion plan that puts education, family tax relief, and student well-being at the center. State Senate Republicans have now responded with their own proposal, a $65.9 billion budget highlighting conservative tax breaks, investments in law enforcement, and a surge in infrastructure spending.
Gov. Stein’s budget calls for roughly $19 billion each year allocated to education — the largest portion of the proposal. His education plan includes: substantial teacher pay raises, free breakfast for public school students, and a statewide policy to keep cell phones out of classrooms.
“Right now, North Carolina’s starting teacher pay is the second lowest in the Southeast, lower than every state that borders North Carolina, including South Carolina,” Gov. Stein said during Wednesday’s announcement.
While Gov. Stein’s budget calls for significant investments in education, including teacher raises and resources for students, the state Senate’s budget proposes an average 8.9% compensation increase over two years — but only a 2.3% base salary raise in year one — along with $3,000 in bonuses and increased supplements for educators in low-wealth counties.
The North Carolina Association of Educators (NCAE) called the Senate budget “a slap in the face,” urging lawmakers to adopt Gov. Stein’s approach instead.
“A 2.3% raise for teachers and 1.25% for school employees won’t even match the rate of inflation,” the organization said. “The Senate budget prioritizes irresponsible tax cuts over our students, schools, and public school families.”
Both budgets feature tax relief, but the target populations differ. The Senate plan continues a multi-year phase-down of the personal income tax rate, aiming to reach 1.99% by 2029.
On the other hand, Stein’s budget proposes three new tax credits aimed at working families: a child and dependent care credit, a child tax credit, and a working families tax credit. According to Stein, some families could receive up to $1,600 under his plan.
“Unfortunately, the Senate budget falls short,” said Stein. “We need to do much more to compensate teachers, support community colleges, and protect public safety. I look forward to working with the legislature to improve this budget and to appropriate additional funds for Western North Carolina in the weeks ahead.”
The Senate budget includes $700 million for the Helene fund, and would replenish the state’s Savings Reserve Fund, otherwise known as the rainy-day fund, to $4.75 billion.
Sen. Ralph Hise, one of the top Senate budget writers, said the state needs to “prepare to fend for ourselves” if the federal government fails to fund more Helene recovery. Calling on the Trump administration to provide ample Helene recovery funding is likely one area where Stein and Republicans will continue to find common ground.
For now, the priorities are clear: Republicans emphasize tax cuts, infrastructure, and government modernization, while Democrats are pushing for greater investments in education, working families, and direct services to students.
The budget process is now in the hands of NC House Republicans, who are expected to present their own version of the budget in the coming weeks.
