Higher starting teacher pay, state employee raises, tax cuts in NC House budget
North Carolina’s first-year teachers could have the highest salaries in the Southeast, if the state House’s budget plan becomes law. House Republican budget writers also want to restore master’s degree pay for teachers, cut more taxes and cut thousands more vacant state employee jobs.
State lawmakers in the lower chamber released their full budget proposal Monday afternoon, which includes raises for teachers and state employees.
Raises for state employees, teachers, retirees
▪ State employees would receive raises of 2.5% in the coming year, according to the House speaker’s office. That includes UNC System employees and community college employees. No raises for the second year are planned, though the General Assembly usually passes a budget adjustment bill that includes additional raises in the second year of the two-year spending plan.
The proposed raises are larger than those in both the proposal by the Senate, which is, like the House, controlled by Republicans, as well as the pitch from Democratic Gov. Josh Stein.
At the same time, House Republicans proposed cutting 3,000 jobs, most of which are vacant — including previously announced cuts and more announced on Tuesday.
Part of that reduction in state jobs would be used to fund additional potential raises for state employees.
▪ Public school teachers would receive an average raise of 8.7% over two years, according to the speaker’s office. That includes increasing the starting teacher pay to $48,000 for the coming fiscal year and $50,000 the following year. That would mean in two years, the total starting pay for teachers, including supplements, would be $56,593.
The national average starting teacher pay is $46,526, according to the National Education Association.
The overall raises amount of 8.7% ranges from as much as 17.7% for starting teachers to 6.4% over two years for teachers with 10 years of experience to 2.1% for teachers with more than 25 years of experience. Raises include step increases.
▪ Public school personnel not paid on a teacher salary schedule would receive raises of 2.5% in the coming year.
The House budget also restores extra pay for teachers who have master’s degrees.
▪ Retired state employees would receive a 1% bonus as a cost of living adjustment in the first year and a 2% COLA bonus in the second year. The Senate budget had no bonuses or raises for retirees.
Standard income tax deduction increased
The House budget proposal increases the standard income tax deduction by $500 for taxpayers filing as single, or by $1,000 for couples filing jointly.
The bill also keeps planned individual income tax reductions, which would lower the rate to 3.99% next year.
Both the House and Senate would trigger further reductions in the rate based on the amount of revenue the state collects. However, the House’s revenue triggers would be higher than the Senate’s proposal, according to the speaker’s office.
House Republicans also want to restore the back-to-school sales tax holiday in 2026, and make tipped wages tax-free up to $5,000.
Projects canceled or not included
Cuts in the budget include a planned new building for the governor and Council of State, which would have been built in the state government complex in downtown Raleigh. The project was only at the planning stage. The House would not provide more money to build it.
Also not in the House budget is any new funding of the new UNC and Duke University joint children’s hospital, which was funded in the Senate’s plan. The House plan also reduces spending authorized previously on the hospital by nearly $100 million.
There are about $10 million in cuts for diversity, equity and inclusion programs across the budget.
As The News & Observer previously reported, $500 million would be clawed back from NC Innovation, a nonprofit created to turn UNC System ideas into businesses, and put in a reserve fund intended for Helene relief.
House Republicans will hold a news conference on Tuesday morning, and the budget bill will also have committee hearings on Tuesday morning. Votes are expected Wednesday and Thursday.
NC Arts Council appointments taken from governor
The House budget changes how the NC Arts Council is appointed. Currently, the governor appoints all 24 members of the council. In the House budget, the council would be reduced to nine people, with three appointed by the governor, three by the House speaker and three by the Senate president pro tempore.
The change follows what Republicans have done in previous budgets, shifting appointment power away from the governor and giving it to the legislature, which has resulted in multiple lawsuits. Previous shifts have involved regulatory boards.
This story was originally published May 19, 2025 at 3:46 PM with the headline "Higher starting teacher pay, state employee raises, tax cuts in NC House budget."
CORRECTION: House Republicans clarified that their plans to eliminate 3,000 jobs include their previously announced agency-specific cuts. Their description of the cuts quoted in an earlier version of this article was incorrect.
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