Education Budget

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2025-2027 Budget

2025 Budget Proposal Comparison Highlights

See a chart of teacher salary schedule proposals in each budget.

2025 House Budget Proposal Highlights

Teacher Salaries (p. 175-176)  Beginning teacher pay is increased from $41,000 to $48,000 in 2025-26 and to $50,000 in 2026-27. This bump brings North Carolina from the lowest of our surrounding states to one of the highest in the southeast. 

Salaries for veteran teachers increase much less than for starting teachers. The salary for teachers with 10 years of experience increases from the current $49,350 to $52,000in 2025-26 and $52,650 in 2026-27. 

The salary for teachers with 15 years of experience gets a small bump from the current $53,880 to $54,960 in the first year and to $55,650 in 2026-27. Across all years of experience and including the annual step increases, the House budget increases represent an average increase of about 8.7% over the next two years.. 

Teacher Apprenticeship Program (p. 120) established to provide competitive grants for schools that have Advanced Teaching Roles programs. The grants provide up to $7,500 per apprentice per year and an additional $5,000 per year for training/education. 

Teaching Fellows Program (p.187-188) Adds three higher-education educator preparation programs (EPP) to the ten already approved to administer the Teaching Fellows Program to now include all HBCUs in the state. The eligible licensure areas are expanded to include Middle Grades Language Arts, English 9-12, and Career/Technical Ed (CTE). Currently, only special education, STEM, and elementary education (K-6) are eligible.

Class Size Flexibility (p. 143) Allows all districts in the state to exceed the current class size maximums in kindergarten through third grade by three students. Growing districts—defined as growing by .5% (half of one percent) for two consecutive years— are allowed to add an additional three students per class, for a total of up to six additional students per class. Growing schools that have also received a performance grade of A or B can add two more students, bringing the total additional students to 8. 

School Lunch (p. 116) Requires schools to provide children with a standard school lunch, regardless of how much debt they have. Currently, some schools provide an alternate meal to students whose accounts are not fully paid.

Visual/Performing Arts Requirement (p. 124) Requires all elementary schools to provide performing arts and visual arts at least once per week, lasting at least 30 minutes.

Digital Literacy (p. 98-99) The state board of Education, DPI, and other identified organizations must collaborate to develop digital literacy instruction in K-8th grade.

Cell Phone Restrictions (p. 117) All public schools must adopt a cell phone-free education policy to eliminate or severely restrict student access to cell phones during instructional time.  

Elementary and Middle School Literacy (p.108) Expands the focus on early literacy from K-3 to grades 4 and 5 by directing the State Board of Education to provide to public schools assessments aligned with the North Carolina Standard Course of Study to help diagnose reading difficulties and inform instruction.

Adds $10 million annually for training middle school teachers and principals in research-backed reading instruction. This training supplements the training teachers in Pre-K through 5 received from 2021-2024 in early literacy research and instruction.  Teachers received intensive training on this from 2021 through 2024.

Charter Schools (p. 112-113) Moves the power to hire the executive director of the Office of Charter Schools from Superintendent of Public Instruction to the Charter School Review Board and the authority to approve new charter school rules from the State Board of Education to the Charter School Review Board.

(p. 115) A charter school may relocate, expand a campus, or establish a satellite location within 10 miles

2025 Governor Stein’s Budget Recommendation Highlights

Governor Stein’s budget recommendations released in March will be refined over the next few months and a Hurricane Helene relief proposal will be released separately, but his proposal highlights key priorities. 

Beginning teacher pay is increased from $41,000 to $44,500 in 2025-26 and $51,200 in 2026-27. This bump brings North Carolina from the lowest of our surrounding states to one of the highest in the southeast. Salaries for veteran teachers also increase; teachers with 5 years of experience will receive an $8,450 increase over two years, while those with more than 15 years will receive about $3,200. These increases represent an average increase of about 10.6% over the biennium. 

Governor Stein’s proposal takes many more steps to support students and educators:

  • Restores 10% master’s pay supplements to teachers whose advanced degrees are in the subjects they teach.
  • Funds all students with disabilities, even in districts whose numbers exceed the 13% cap.
  • Funds a 6.5% raise for correctional officers and youth counselors
  • Adds a child tax credit of up to $300 for a family of four.
  • Provides funding for 330 additional school health personnel, including school counselors, nurses, social workers, and psychologists.
  • Funds 330 new elementary and middle school resource officers positions each year.
  • Funds free school breakfast to all students.
  • Enables public schools to continue providing K-12 students with a laptop.
  • Reinstates a sales tax holiday for school supplies (removed by lawmakers in 2014).

Governor Stein’s proposal also includes a $4 billion bond to modernize old and outdated school buildings. However, his proposal lacks a clear pathway for meeting the requirements of fully funding the Comprehensive Remedial Plan (Leandro Plan) as ordered by the 2022 N.C. Supreme Court. 

To help fund his initiatives, Governor Stein has suggested cutting the private school voucher program so tax dollars flow to the public rather than private interests. He also recommends freezing corporate income tax cuts. Currently at 2.25%, the corporate income tax is set to drop to 0% by 2030.

2023 – 2025 Session Budgets

2024 Budget Adjustment

2023-25 Budget

2024 Budget Adjustment Highlights

The 2024 budget adjustments (Session Law 2024-55) were added to House Bill 10, a bill originally focused only on requiring local law enforcement to cooperate with ICE. Governor Cooper vetoed the bill, but House and Senate members overrode his veto and the bill became law. 

Funding for increased public school enrollment. (p. 4) The Department of Public Instruction received $95 million to account for increased enrollments in public schools. The department had requested $250 million to cover anticipated costs. 

Increases in voucher funding (p. 4 – 6) The bill transferred $248 million for use in 2024-25 from the General Fund to the Education Reserve for Opportunity Scholarship tuition vouchers. The bill also made all voucher payments retroactive to the beginning of the school year to allow every family who had applied for a voucher to receive one.

It also transferred $215, 460,000 from the General fund to the OS Grant Fund Reserve for use in the 2025-26 school year. 

Increased the annual appropriation from the General Fund to the OS Grant Fund Reserve by $209,460,000 starting in 2025-26 to bring the annual transfer for 2025-26 to $625,000,000. In subsequent years through 2032-33, the appropriation increases by $50 million each year.

Added funds to the ESA+ voucher program for students with disabilities (Personal Education Student Accounts for Children with Disabilities) by $24,700,000 for use in 2024-25 and for each year thereafter.

Funding for community college enrollment increases. The bill transferred $66 million in recurring funds from the General Fund to the Community College System to account for increased enrollments.

2023 – 2025 Budget Highlights

Total Appropriations

Fiscal Year 2023-24: $29,707,123,024

  • Education: NC Community College System: $1,474,240,607
  • Department of Public Instruction (K-12):$11,564,559,926
  • The University of North Carolina: $4,265,143,244
  • Total Education: $17,303,943,777

Fiscal Year 2024-25: $30,823,313,998

  • Education: NC Community College System: $1,514,102,757
  • Department of Public Instruction (K-12):$11,949,016,128
  • The University of North Carolina: $4,407,489,063
  • Total Education: $17,870,607,948

Page numbers below refer to the 2023 Appropriations Act

Teacher Salaries (p. 143)

  • Teacher salaries increase an average of 4% this year and 3% next year for a total of about 7% over the next two years. Early career teachers receive larger increases than veteran teachers, but the numbers are low for everyone. 
  • Starting salaries for beginning teachers increase from $37,000 to $39,000/year in 2023-24 and to $41,000/year in 2024-25.
  • Teachers with the most experience (25+ years) will see their salaries grow just $1,950 over two years, from $54,000 to $55,100 in 2023-24 to $55,950 in 2024-25. This is the current maximum base salary. 
  • Salaries for teachers who are in their 15th through 24th years of teaching increase $1,880 over the two years (about 2% in 2023-24) and have no step increases for years of experience until they reach 25 years.  The chart shows the two-year adjustments and percent increase for each year on the scale.

No Master’s Pay for teachers. There is still no supplement for earning a master’s degree or any other higher degree. The General Assembly ended master’s degree (and other higher degree) benefits years ago for teachers who began working toward their degree after 2013. Most other states do pay higher salaries for teachers with higher degrees, so this is a distinct competitive disadvantage for North Carolina.

Salary supplements for teachers in Advanced Teaching Roles (p. 126) were allocated $10,900,000 each budget year (Money Report #59) for school districts to provide supplements for teachers in advanced teaching roles. The roles may be defined by the local district but include two specified in the budget:

  • Adult leadership teacher (+$10,000/year) leads a team of 3-8 teachers, works in the classroom at least 30% of the day and is not a school administrator
  • Classroom excellence teacher (+$3,000/year) has responsibility for at least 20% more students than the most recent year for which they did not serve as a classroom excellence teacher. They serve in an advanced teaching role and are on a team led by an adult leadership teacher.

Principal Salaries (p.152) 

Principals receive a 4% salary increase in 2023-24 and an additional 3% increase in 2024-25 for a total of 7% across the two budget years. 

In addition, principals of the top 50% schools based on growth are eligible to earn bonuses based on the following schedule.

Statewide Growth Percentage

  • Top 5% – $15,000
  • Top 10% – $10,000
  • Top 15% – $5,000
  • Top 20% – $2,500
  • Top 50% – $1,000

Other State Employees receive a 4% salary increase in FY2023-24 and 3% in FY 2024-25. The Teachers’ and State Employees’ Retirement System (TSERS) provides a one-time cost-of-living supplement to retirees of 4% in FY 2023-24 using receipts from the Retiree Supplement Reserve.

Tuition Assistance for Teacher Assistants (p. 110) Establishes a grant program to provide tuition assistance to teacher assistants who pursue a four-year degree at an education preparation program (EPP) to become a teacher. DPI will administer the program and teacher assistants will be able to apply for up to $4,600 per year for four years to pay for college expenses.

Teacher Apprentice Grant Program (p. 112) Directs DPI to establish a grant program to provide school districts funds to pay teacher apprentices pursuing teacher licensure at an educator preparation program up to $4,600 per semester for tuition and fees for up to four years. The grant program may also be used to provide salary supplements to teacher apprentices who become licensed teachers and accept employment in the same district.

National Board Certification (p. 104) Reestablishes a grant program to reimburse teachers for the cost of obtaining national board certification and retains the 12% salary increase for teachers who receive certification (p. 142).

NC Teaching Fellows (p. 182)

  • The Teaching Fellows Program gains two new universities, bringing the participating schools to 10. This number is still far below the 17 schools participating in the original program. 
  • Adds educators seeking licensure in elementary education (K-6) to the current program, which applies to teachers seeking licensure in special education or STEM areas.
  • Awards up to $40K in forgivable loans for completion of eight semesters ($5,000 per semester). 
  • For each year the qualifying teacher remains an active teacher in NC, the amount of the loan received per year (plus accrued interest) is forgiven. 

Mandatory Training Contributes to CE Credits (p. 86) For all teachers, hours spent attending mandatory training programs will now contribute toward continuing education credits as long as the training is required by State law or districts as a condition of employment and the teacher has met other requirements for their subject area or other license renewal requirements.

Supplemental Funds for Districts in Low-Wealth Counties and Small Counties (p. 80) School districts in low-wealth counties that meet specified eligibility requirements and small districts (i.e. fewer than 3,300 students) are eligible to receive additional state funding for the purposes of providing additional instructional and support staff as well as salary supplements. These funds aim to help close the gap in what poor and wealthy counties can offer to attract teachers and other personnel.

Opportunity Scholarship Voucher Expansion (p. 187+) See our fact sheet on vouchers in North Carolina. 

  • Expands eligibility to all private school students, removing any requirement for previous public school attendance. 
  • Removes income restrictions, so even wealthy families qualify for the vouchers. The amount provided for the vouchers is set on a sliding scale with 100% of the average per-pupil allocation going to families earning 100% or less of the federal free/reduced lunch qualifying income ($55,000 for 2023-24).
  • Reduces the percentage of applications to be selected for income verification from 6% to 4% for families applying to receive 60% to 100% of PPE (i.e., reporting incomes below 450% of F/RL eligibility).
  • Funds appropriated to the Opportunity Scholarship Grant Fund Reserve increased substantially (p. 192).

Supplemental Appropriations to the Opportunity Scholarship Reserve Fund (see Money Report p. B45) add $87 million in 2023-24 and $163 million in 2024-25. This brings the appropriations to: 

  • 2023-24: $176,540,000 (previous) + $87M = $263,540,000
  • 2024-25: $191,540,000 (previous) + $163M = $354,540,000

Up to 2.5% of the funds allocated may be used each year by the Authority for administrative costs associated with administering the program ($10 – $13 million starting in 2025-26). 

Up to $1,000,000 may be used by the Authority to contract with one or more nonprofit organizations for outreach, education, and application assistance for parents and students.

State Education Assistance Authority (SEAA) will select 6% of the applications to verify the residence of the applicants for eligibility purposes (p. 193).

The Superintendent of Public Instruction must report by March 1 2024 on the following:

  • A recommendation for a “nationally standardized” test for private school voucher students and public school students to take in grades 3 and 8 beginning in 2024-25 so their performance can be compared. 
  • The alignment between the nationally standardized test selected and the standard course of study for grades 3 and 8. The alignment should include a crosswalk of the standards assessed.
  • Feasibility of developing a through-grade assessment for grades 3 and 8 that assess the NC standard course of study, consist of multiple tests across the year instead of one at the end of the year, and would replace the current EOG tests for grades three and eight.

Personal Education Savings Account (PESA) Voucher Changes (p. 201+)

The budget changes payment for Personal Education Savings Account voucher funds to a pre-approval system for all but the first payment. Funds are paid electronically into a parental account in equal amounts twice a year. The first deposit occurs at the beginning of the school year after the parental agreement is approved and completed. Subsequently, all requests for qualifying expenses are subject to a pre-approval process. Expense reports are no longer required for expenses that have been pre-approved. 

A portion of the funds must be used to provide an education for at least 140 days/year (p.201).

Each year, the appropriation to the PESA fund increases by $1,000,000 until 2032-33 where it is scheduled to remain at $57,943,166 for each subsequent year.

  • 2023-24 – $48,943,166
  • 2032-33 – $57,943,166

High School Graduation Requirements and Early Graduation Scholarship Program (p. 195)

The budget calls for the State Board of Education to develop a sequence of courses that allows students to complete graduation requirements within three years. 

This option must be available at all traditional public schools. Charter schools may also choose to provide the three-year pathway. This pathway must be available to students no later than November 2023 and must enable students in 10th grade in 2023-24 to complete the sequence to graduate in the 2024-25 school year. 

In addition, an Early Graduation Scholarship Program is established to pay for postsecondary education costs for up to two semesters in the two years following the graduation of students who completed high school in three years.

Career Exploration and Development Pathways (p. 86)

The State Board of Education is required to develop standards for an elective middle school course in which students learn about career pathways.

In addition, all middle and high school students in local districts must now complete a career development plan. The State Board of Education will establish the minimum requirements for the plan. Students must develop their initial plan by the end of 6th grade to be promoted to 7th grade and must revise it in 9th grade to be promoted to 10th grade. Charter schools are encouraged, but not required to follow these requirements. 

A pilot program including at least 20 districts in 2023-24 will help develop the plan, including professional development requirements needed to implement the career development plans statewide in 2024-25.

Remote Charter Academies (p. 93)

As part of their initial application or as a modification a charter school may now apply to offer a remote academy. These charter schools can offer remote instruction to all of their students, (essentially become another virtual academy) or provide remote instruction to some of their students and in-person instruction to others. A student receiving more than half of their instruction remotely, must be classified as enrolled in the charter school’s remote academy.

The charter school can choose to be a statewide remote academy that accepts students from across the state or a regional remote academy that admits students only from the county in which the school is located and all adjoining counties. 

The budget also requires that beginning with the 2026-27 school year, the Review Board shall approve a minimum of two statewide remote charter academies if they meet the necessary qualifications. 

The pilot program for the two statewide virtual charter schools (North Carolina Cyber Academy & NC Virtual Academy) was extended for an additional year, bringing the total pilot length to 11 years. In addition, the enrollment maximum was increased to 20% growth each year.

*In separate legislation enacted in August (See 2023 Key Education-Related Legislation), the State Board of Education lost most of its authority to a newly created Charter School Review Board, which has essentially the same membership as the former Charter School Advisory Board. Under the new law, the State Board retains authority to rule on appeals of the Charter School Review Board’s decisions and also allocate funds to charter schools. However, the 2023 Appropriations Act (p. 141) limits the State Board to withholding or reducing distribution of funds under only three conditions:

The change in funding is due to an annual adjustment based on enrolment or is a general adjustment not specific to the charter or actions of the charter school.

The Review Board notifies the State Board has materially violated a term of its charter, a State statute or federal law, or has had its charter terminated or nonrenewed.

The Superintendent of Public Instruction notifies the State Board that the charter school has failed to meet generally accepted standards of fiscal management or violet a State or federal requirement for receipt of funds.

Early Childhood Education

There is no new state funding to help extend federal pandemic relief funds used to help child care providers raise wages and recover from the pandemic. In NC, the federal funding will expire in June 2024 and child care centers have already announced closures. 

The budget also lacks additional funding for Smart Start and does not expand the WAGES program, which provides salary supplements to people who work with young children (ages birth-5) in participating counties.

2022 Conference Report Update (HB103/SL2022-74)

LATEST UPDATES: Current Operations Appropriations Act of 2022

On July 1, the North Carolina House and Senate passed HB 103 and sent it to Governor Cooper, who signed it into law on July 11, 2022. This adjustment to the 2021-23 budget was not open to debate or revision, only an up or down vote. As a result, legislators had the difficult decision of whether to vote for a budget that included many problematic provisions. 

The Leandro Plan was not fully funded. The 2022-23 appropriations fell $443 million short of what the Leandro Plan called for in FY 2022-23 (44% of the total plan left unfunded). 

Salary increases did not keep up with inflation.

New Inflation Reserve allocation: $1,000,000,000.00

Additional Transfer to Savings Reserve Fund: $1,600,000,000.00

The $2.6 billion sent to the new inflation reserve and savings reserve could have easily covered the funds needed for Leandro.

Highlights of the Appropriations Act of 2022 pertaining to education

K-12 Education Overall: Provides $11.3 billion for FY 2022-23, which is a 6.4% increase from FY 2021-22.

Teacher Salaries: 

The annual starting pay base rate increased to $37,000/year.

Provides an average 4.2% salary increase, including step increases based on years of teaching.

For teachers with 0-5 years of experience, the increase is 6.1% to 7.2%.

For teachers with 15 or more years of teaching, the increase is 0% to 2.7% except for teachers in their 24th year who receive a 6.6% raise (mostly due to the step increase). 

Requires SBE to establish a “Growth-Based teacher Bonus Program” to provide qualifying teachers with bonuses in January 2023 based on 2021-2022 test data.

Teacher Supplemental Allotments (local salary adjustments): Provides $70 million increase in recurring funds to the allotment created in the 2021-23 budget to pay salary supplements to teachers based on a county’s respective tax base, median household income, and effective tax rate.  Increased the supplement cap per teacher from $4,250 to $5,000 and increased the tax base eligibility threshold.

Low Wealth/Small County Signing Bonus: Directs DPI to establish and administer a signing bonus program for eligible teachers and employees in 2022-23 that would match local funds on a 1:1 basis up to $1,000 in state funds.

Principal Salaries. A principal’s placement on the principal salary schedule for July – December 2022 is based on 1) size of school, and 2) growth score status for two of the prior three school years. Starting in January 2023, the principal’s placement on the salary scale for 2) growth score status will be set by performance during the prior school year (i.e. 2021-22). Due to the pandemic, some schools’ performance dropped, which will reduce salaries for those principals.

Adds Principal Performance Bonuses for principals whose schools perform in the Top 50% of growth. Bonuses range from $15,000 for Top 5% to $1,000 to Top 21% – 50%

Assistant Principals. Annual pay increased by an average of 3.4%.

Non-Certified Staff Salaries. Starting in 2022-23, non-certified staff will receive a salary increase of 4% or whatever is needed to achieve a minimum hourly rate of $15.00/hour. If staff salaries are higher than $15/hour, they will receive the 4% increase.

Central Office Staff: Provides 4% raise across the board (was 2.5 % in 2021-23 budget)

Retired Educators: Receive an additional 1% cost-of-living supplement for 2022-23.

Private School Vouchers: 

Adds $56 million to the base allocation for Opportunity Scholarships and expands student eligibility for the program from 175% to 200% of Free/Reduced Lunch eligibility (from $89,840 to $103,000/year for a family of 4). 

Total public allocation will be $176 million in FY 2023-24.

Adds $16.3 million in recurring funds to the Education Student Accounts for Children with Disabilities Program (ESA+) to bring the annual amount to $47.9 million.

Early Grades Literacy: Provides $14 million recurring and $600,000 nonrecurring funds to DPI to fund 9 full-time Regional Literacy Coaches and 115 (1 per district) full-time Early Learning Specialists.

School Administration: Provides $6 million increase in funds to cover stipends for Masters of School Administration Interns.

School Nutrition Program: Adds $3.9 million to provide free lunch for students qualifying for reduced-priced meals in SY 2022-23.

Broadband Expansion: Adds $5 million (bringing the total to $20 million) in recurring funds to expand broadband in underserved areas. 

Data Systems Study: Provides $500,000 non-recurring funds to myFutureNC to study the creation of an interconnected, real-time data system to facilitate communication and transition of students between public schools, community colleges, and universities.

Student Health and Safety

School Safety Grants Program: Adds $32 million in non-recurring funds for the School Safety Competitive Grant Program to bring the total to $41.7 million in 2022-23.

School Resource Officer (SRO) Grants: Adds $15 million in recurring funds to the grant program to place SROs in elementary and middle schools (new total $33 million in 2022-23). 

Feminine Hygiene Products Grant: Makes permanent and funds $250,000/year for grants to schools for feminine hygiene products for students.

Transportation: Adds $32 million in non-recurring funds to transportation fuel reserve to pay for higher fuel costs. Adds $2.8 million in non-recurring and $2.8 million in recurring funds to pay for higher fuel costs for driver training.

2021-2023 Biennium Budget Update

In November 2021, after months of anticipation, the conference budget report was finally released. It was signed by the governor on November 18, 2021. The budget does address many important measures like educator and school staff pay increases, covid relief, and a hold harmless ADM provision that will stave off budget cuts to schools. It falls short, however, in fully funding the Leandro remedial plan. It is disappointing that legislative leaders missed the opportunity to adequately support our schools and students, and instead prioritized tax cuts.

The compromise budget, over the next few years, eliminates North Carolina’s already low corporate tax rate. This will permanently reduce revenue the state has available for public school funding and other important needs. A summary of pay increases for educators follows below.

Highlights of the Conference report budget pertaining to education:

Total budget spends $25.9 Billion in FY 2021-2022 and $27.0 Billion in FY 2022-2023.

$10.6 Billion in total K-12 spending in FY 2021-2022 and $10.9 Billion in FY 2022-2023

Hold harmless provision that ensures school budgets are not cut due to discrepancies in actual vs anticipated ADM.

$528 million is to be transferred from the NC Lottery to the needs based public school capitol building fund and $80 million into newly created repair and renovations fund.

Cuts personal income tax from 5.25% to 3.99% over six years, including cutting to 4.99% beginning Jan. 1.

The 2.5% corporate income tax rate will be cut to 2.25% in 2025 and cut to 0% by the end of the decade.

Increases zero-tax bracket to $12,750 for individuals, or $25,500 for married couples, up from $10,750 and $21,500.

A $4.25 billion savings reserve would remain at the end of the biennium.

An additional $1.5 billion more in recurring funds for K-12 public school system

Funds broadband expansion.

$18 million for direct and targeted intervention in low performing schools and districts.

An additional $37.5 million for Science of Reading training professional development

$400,000 to address the backlog for drivers education in the state.

$36 million for grants for after school and before school programs.

$36 million for summer school extension programs.

Adds Fayetteville State University to NC Promise program which guarantees $500 in state tuition per semester.

Limits executive power by changing state law to require the governor to obtain agreement from a majority of the Council of State if a statewide emergency declaration is to last more than 30 days. 

Ends controversial ISD program.

Opportunity scholarship eligibility raised to include students with a household income level up to 175% of the amount required for the student to qualify for the federal free or reduced-price lunch program. Voucher amount limit of $4,200 is removed and replaced with a limit of 90% ($5,850) of the state per pupil allocation for average daily membership in the prior fiscal year.

$500,000 for an unnamed nonprofit to publicize and market the voucher program.

Creation of a fast track replication process for some charter schools. Planning year will not be required for these schools.

What was left out?

Full funding of remediation requirements for Leandro

Restoration of masters pay

Requirement to post curriculum documents online

Eight weeks of paid parental leave for new mothers

A delay in implementation of new social studies standards until the 2023-2024 school year and creation of a Standards Review Commission.

Raising teacher pay to the national average

Medicaid Expansion

Helpful links to budget documents and recent stories:

Text of Conference Budget Report

Money Report

Teacher Pay

Teachers will receive an increase of approximately 2.5% per year for FY 2021-2023. This includes an increase of about 1.3% plus step increases given for longevity. The restoration of Masters pay was not included in the final budget.

Highlights of educator pay:

Raise hourly salaries for non-certified school employees up to $13 an hour in the first year, then to $15 in the second. 

All state employees and local education employees would get $1,000 bonuses.

Teachers will receive an additional $1,000 bonus.

Bonuses for teachers previously tied to testing will become $300 bonuses for all teachers.

An additional $500 bonus would be given to employees earning less than $75,000

$100 million in recurring funds for a new state-funded teacher salary supplement focusing on low-wealth counties. This would impact teachers in 95 of the state’s 100 counties. Excludes Wake, Durham, Mecklenburg, Guilford and Buncombe counties. Kris Nordstrom of NC Policy Watch notes “The NCGA’s new ‘low wealth’ teacher salary supplement allotment disproportionately benefits white teachers and districts serving white students”.

A one-time cost of living adjustment for retired state workers, and teachers. The amounts are 2% for this year and 3% for the next fiscal year.

Principal pay would be raised by 2.5% over two years.

Previous Budget Proposals

House Budget Proposal

On August 12, 2021 the proposed budget bill was presented to the full House for a vote. Several Democrats noted that the legislation was created behind closed doors and that they were not given a chance to properly review the document before a vote was expected.

The House Budget, spends $25.7 billion in the first year and adds $940 million in the following year. The proposed spending plan was released on Monday evening and includes broadband expansion, infrastructure, and capital projects among other items. It was passed by the House on Thursday with a vote of 72-41. The budget will now be sent to the Senate for a concurrence vote. The two chambers will work towards a compromise. The compromise budget will then be presented to the Governor to pass or veto.

The state has a huge budget surplus estimated at $6.5 billion. Like the Senate budget, the House budget includes various tax cuts including personal and corporate income taxes. The House budget’s tax cuts are lower than the Senate’s. A recent analysis from the NC Justice Center states the “full impact of the changes by 2025 would be a reduction of $2 billion in annual revenue that otherwise could have funded priorities for the well-being of the state and the people.” Many public school advocates note that the budget falls short in several areas, and fails to fully fund the Leandro remediations supported by the Court. The needs of North Carolina’s communities and schools are great as the pandemic continues. More work needs to be done on the spending plan to adequately support our state and meet the critical requirements of our traditional public schools.

The following are some highlights from the budget plan:

Educator raises are focused on veteran teachers. New steps were created for years 15-20 and 20-25. The average raises for teachers are approximately 5.5%.

Reinstatement of advanced degree pay for educators with Master’s degrees. 

8 weeks of paid parental leave for new mothers.

Bonuses of $300 for all educators.

Creation of a new health savings program for new teachers that will help with health care needs upon retirement.

Bonuses of $1,800 for all principals.

Assistant Principal pay raised to 22% above corresponding teacher pay step.

Raises for non-certified school staff to bring minimum salaries to $13/hour in the first year of the budget and $15/hour in year two.

Elimination of the requirement that teachers pay for their substitutes for personal leave days as long as a reason is given for the absence.

Creation of a matching recruitment bonus program for rural areas.

A hold harmless provision for principals’ pay as their salary was tied to school performance grades and school grade reports are not widely available due to Covid.

A delay of the new social studies standards until at least the 2023-24 school year.

Creation of a Standards Review Commission to review the social studies standards.

The requirement that school boards create a local community media advisory committee to investigate and evaluate challenges to instructional materials and supplemental materials.

A requirement that school districts post online what instructional materials are being used, including teacher lesson plans.

A penalty for districts found not to be in compliance with a law requiring them to teach cursive writing and multiplication tables. The proposed budget would withhold the salary of the superintendent of the school district.

Several provisions benefiting charter schools including giving multiple chances to rejected charter school applicants to win approval.

School performance grades waived for the 2021-2022 school year.

Permission for districts to offer virtual academies for this school year.

Instead of a COLA adjustment, retirees will receive 2% increase each year of the budget for 4% total.

Provisions for a restructuring of NCDPI that include a list of programs not eligible to be cut.

The state’s two virtual charter school programs, which have historically had low performance grades, could continue operating for four more school years.

Reducing the corporate tax rate from 2.5% rate to 1.99% over two years.

Reducing the individual income tax rate from the current rate of 5.25% to 4.99%.

Allocate $5.8 billion in state funds in the next two years on building construction and repairs. Find the full document here

Senate Budget Proposal

At a press conference on Monday, June 21, Senate Leader Phil Berger shared initial details about the Senate’s $25.7 billion dollar spending proposal. Previously, we reported that recent projected budget surpluses were estimated to be approximately $6.5 billion over initial estimates by 2023. This would go a long way in meeting critical needs of our schools that have been ignored for far too long. The Leandro case affirmed that inequitable and inadequate school funding bars access to a sound and basic public education, particularly for students of color and those from families with low incomes. Disappointingly the Senate budget proposal instead focuses on tax cuts.The NC Corporate tax rate is currently 2.5% and one of the lowest in the US. Related proposed legislation would eliminate it all together by 2028.

Raises for educators are a paltry 3% over two years. This after a tumultuous year many educators described as the most challenging of their career. This is no way to show our teachers our appreciation or build back the teacher pipeline. NCAE had this to say about the proposal “When presented with an added $6.5 billion in unexpected revenue, the Senate opted to reward educators for working non-stop to support students through the most difficult school year in history with a pitiful 1.5% raise. Corporate tax cuts take priority over students yet again.”

Highlights include:

A 3% raise for teachers over the next two years.

State employees earning less that $75,000 will receive a $1,500 bonus. Those making more will receive a $1,000 bonus.

Teachers and principals will get an additional $300 bonus.

Non-certified employees will get minimum $13 an hour salary.

Allotment for every school district to have a psychologist.

Elimination of the controversial Innovative School District

Additional funds for children with disabilities.

Additional funds for academically gifted children.

Small county school system supplemental funding includes school districts with ADMs up to 3,300 and allotments between 1.47M-1.82M.

The reclassification of at least 7 full time equivalent full time positions within DPI to support science of reading and NC Read to Achieve program as amended by the Excellent Public Schools act of 2021.

$15 million in non-recurring state funds for Smart Start for both years of the biennium.

2% rate increase supported by $1.7M in recurring state funds for FY 21-22 and FY 22-23 with the intention of supporting salaries for NC Pre-K teachers in private child care programs.

$20 million in non-recurring federal state-level ARPA funding to support to support startup and capitol grants for communities with child care deserts or low-performing or high poverty school districts.
• No additional funding for slot expansion.

Permits the use of special state reserve funds for transportation and establishes the transportation reserve fund for cover through a grant program extraordinary transportation costs for qualifying students.

Establishes the 2021-2023 School Safety Grant program to improve safety in public schools by providing grants for services for students in crisis, for school safety training and for safety equipment in schools.

Establishes a Feminine Hygiene program to provide grants up to 5,000 per public school unit. Unfortunately these funds are non-recurring.

An increase of $76.8 Million dollars for the Opportunity Scholarship program.

7% raise on average for corrections officers.

$459 million will be transferred from the NC Education Lottery to the Needs-Based Public School Capital Building Fund and $200 million to the Public School Capital Fund. A projected $2.4 billion will be spent on school capital over the next 7 years.

A hold harmless provision for change in ADM. The State Board of Ed will not reduce allocations based on discrepancies between actual and anticipated ADM.

A Children with Disabilities Reserve Fund is established for public school units that enroll more children with disabilities than anticipated prior to the start of the school year.

$6 million will go towards science of reading training for the Read to Achieve program.

Tax cuts including cutting the personal income tax rate to 3.99% by 2026. The current tax rate is 5.25%, and the budget would reduce it to 4.99% in 2022.

The standard deduction would be raised to $25,500 and the child tax deduction would be increased to $500 for each child.

Notably, the budget lacks a COLA adjustment for retirees and medicaid expansion

read more here about the budget and here about early childhood education proposals

See the committee report here and the budget document here.

The Governor’s Recommended Budget  was released on March $585.6 million in funding for FY 2021-22 and $1.0 billion for FY 2022-23 to improve teacher quality and support, provide additional resources for students with the greatest need, increase Local Education Agency (LEA) budgetary flexibility, ensure students are college and career ready, and strengthen early childhood education and supports. The recommended budget provides many of  the resources necessary to meet the Leandro Comprehensive Remedial Plan. Highlights include:

A $15-an-hour minimum wage for state workers

Restoration of the state Earned Income Tax Credit and a new child care tax credit

$120 million to hire an additional 1,000 school counselors and nurses

Funding for another 1,500 slots in the state’s pre-kindergarten program

$2,000 bonuses for teachers, principals, noncertified public school employees, university employees and community college employees this fiscal year and another $1,000 bonus next year

$52 million for educator recruitment, retention and training

Removes funding caps and increases funding for the children with disabilities and Limited English Proficiency allotments to increase the number of students receiving supplementary funding and address differential costs of serving specific populations

Increases low wealth funding to provide eligible counties additional supplemental funding to address gaps in local revenue per student

Provides $1.5 million  to decrease the impact of implicit bias on children of color and children with disabilities

Strengthens the  early childhood educator pipeline by providing workforce development and compensation strategies

Establishes a DPI Office of Equity Affairs to direct recruitment and retention of a diverse workforce

Funding to support up to 90 additional Teaching Fellows for the 2021-22 academic year and 445 additional Fellows for 2022-23, expanding eligible institutions for the program, broadening eligible certification areas, extending the reduced payback period to Fellows who teach in high-poverty schools, improving opportunities for talented minority candidates, and expanding program support and enhancement

The Governor presented his recommendations to the NCGA this week. The House and Senate are in the midst of drafting their budgets. The next steps involve negotiations between the differing priorities to reach a compromise budget. Education will be a key issue as well as taxes and Medicaid expansion. Stay tuned for this important information!

Last updated September 2025

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