Stein signs GOP-proposed NC budget, ushering in lower taxes and raises for state employees :: WRAL.com
North Carolina’s state government has a new comprehensive spending plan for the first time in more than 1,000 days.
Gov. Josh Stein on Tuesday signed a $34 billion state budget that Republican legislative leaders finalized last week after roughly a year of negotiations that were prolonged by disputes over an array of issues, from the state’s income tax rate to funding for a new children’s hospital in Apex. Because of the delay, state agencies have been operating on budgets approved in 2023.
Republicans have praised the plan for boosting state employee pay while also cutting taxes for North Carolinians. The plan includes 3% raises for all state employees — including raises averaging 8% for teachers and raises of up to 17% for some law enforcement officials — while reducing the personal income tax rate from 3.99% this year to 3.49% next year.
Democrats have said state employees need those raises but have been highly critical of other parts of the 600-page document. For instance, senate Minority leader Sydney Batch, D-Wake, criticized Republicans for a provision buried deep in the budget that would ban the North Carolina State Bar from giving money to civil legal groups — essentially slashing the budgets of organizations that help low-income people facing eviction, domestic violence and other legal issues.
Stein echoed some of those concerns Tuesday, but said he won’t stand in the way of raises for state employees.
In addition to those raises, he praised the plan for making “meaningful investments in our community colleges, the DMV, childcare, and summer food programs for our kids. These are real wins, worthy of celebration and worthy of my signature.”
He continued: “I won’t sweep this budget’s flaws under the rug, however, the legislature is slashing more than 1,000 state government positions, making it harder for us to meet the people’s health and safety needs. Many state employees’ raises don’t even keep up with inflation, and even the more meaningful raises that are in the budget still leave us lagging behind our neighbors in competitive salaries.”
WRAL broke down some of the main highlights of the budget last week when it first became public.
Stein could have vetoed the legislation, but that would have put fellow Democrats in an awkward position since many of them voted for it, albeit begrudgingly. The proposal last week passed the state House of Representatives 88-21 and the Senate in a 35-10 vote — more than enough support to override a gubernatorial veto, if Stein had issued it.
Anderson Clayton, chair of the North Carolina Democratic Party, praised Stein for approving a plan that attempts to address some of the state’s most urgent needs.
“While this budget isn’t perfect, it takes real steps in the right direction. Going forward, we must continue investing in public education. We must reverse cuts to state employees and target tax cuts that make life more affordable for working families instead of doubling down on giveaways to massive corporations and their shareholders,” Clayton said in a statement.
In addition to state employee raises and tax cuts, the plan also contains some cost-cutting measures, such as the elimination of hundreds of state jobs. Proponents hope that by mostly targeting long-vacant jobs, they can effect savings without harming the current operations of the state.
The budget also contains hundreds of millions of dollars for some big-ticket projects, such as a new children’s hospital in Apex, UNC-Chapel Hill’s Carolina North campus and Poe Hall on N.C. State University’s campus. But it doesn’t include other big-ticket items, such as a mechanism to fund a Major League Baseball stadium in support of a possible expansion bid in Raleigh.
The budget also:
This is the first comprehensive budget Stein, who served as attorney general from 2016 through 2024, has signed since becoming governor last year. Stein’s predecessor, Democrat Roy Cooper, vetoed Republican-authored spending plans in 2017 and 2019.
State lawmakers were expected to approve a comprehensive state spending plan last summer but failed to do so as Republican legislative leaders — House Speaker Destin Hall and Senate leader Phil Berger — bickered over tax rates and capital spending.
Berger, R-Rockingham, in a statement Tuesday took credit for enacting fiscal policies in recent years that “resulted in an incredible decade of success and economic growth,” adding: “Senate Republicans fought to secure a budget that would continue those efforts, and the budget Gov. Stein signed does just that. It continues to slash tax rates for all North Carolinians and prioritize the needs of our citizens, not bureaucrats.”
The negotiations featured chamber leaders at opposite ends of their careers. Hall, 39, became House speaker last year following the departure of U.S. Rep. Tim Moore, who led the chamber for 10 years before winning a congressional seat in 2024. Berger, 73, has served as Senate leader for 15 years but lost his district’s GOP primary election to Rockingham County Sheriff Sam Page. Democrats speculated that Berger’s reelection campaign distracted him from budget negotiations — a claim Berger has denied.
House Speaker Destin Hall, R-Caldwell, on Tuesday referred to the plan signed by Stein as “the best budget in decades.”
It delivers “historic raises for teachers and law enforcement, as well as tax relief for the working men and women of our state,” Hall said in a statement. “There is something in this budget for every North Carolinian, and the meaningful investments we’ve made will deliver real results that strengthen our communities, put more money back in people’s pockets, and improve lives across our state.”
