NC budget with year-delayed raises is now law. Gov. Stein signs spending plan
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- Gov. Josh Stein signed North Carolina’s delayed state budget into law in 2026.
- Teachers will receive an average 8% raise, with highest increases for starting teachers.
- Most state, UNC and community college employees will receive 3% across-the-board raises.
North Carolina — a year late — now has a state budget, as Democratic Gov. Josh Stein signed the legislation into law on Tuesday.
The new law drafted by Republican lawmakers means that thousands of teachers and state employees will get across-the-board raises they’ve been waiting on for a year, as the Old North State was the last in the country to pass a new budget.
“This budget bill gets a lot of things right,” Stein said, highlighting how it delivers the “largest starting teacher pay raise in nearly 50 years,” fully funds Medicaid, gives double-digit pay raises to state law enforcement officers and appropriates $700 million to help residents of Western North Carolina continue their recovery from Helene.
“These are real wins worthy of celebration and worthy of my signature. So, after careful deliberation, this morning I will sign the state budget into law,” he said.
But, “I won’t sweep this budget’s flaws under the rug,” Stein said during a signing ceremony at the Executive Mansion, flanked by law enforcement officers, healthcare professionals, teachers and other state officials and employees.
Stein said the raises for many state employees are not enough to keep up with inflation and that the state has faced years of “underinvestment in state and public services,” meaning many of the raises don’t take the state out of the bottom rankings on several metrics.
He criticized several provisions in the budget, such as cuts to vacant job positions. He noted the budget eliminates the Office of Health Equity, within the state’s health and human services department, which works to improve health access and eliminate health disparities, and the Office for Historically Underutilized Businesses in the Department of Administration, which helps connect people to jobs.
It also is “fully of unconstitutional and petty provisions that strip power from the executive branch, politicize state government and undermine its efficiency,” Stein said. The budget includes several policy changes that take appointment power from the governor and give it to some Republican members of the Council of State.
Asked whether he is considering suing, Stein told reporters after the bill signing that “we will review our options.”
Negotiations between Republicans produced budget
Despite these provisions, Stein said lawmakers accepted several of his “big-ticket budget recommendations, and having just celebrated America 250 this weekend, we remember that our democracy has always run on compromise for the common good.”
The bill, which emerged from drawn-out negotiations between Republican House Speaker Destin Hall and Republican Senate leader Phil Berger, gained support from half of House Democrats and several Senate Democrats.
It seemed likely Stein would sign the bill, in part because of the number of Democrats who already voted for it. Republicans have a veto-proof supermajority in the Senate, but need some help from Democrats or independents in the House to override a veto by a three-fifths majority. Final budget votes were 88-21 in the House and 35-10 in the Senate.
Asked by The N&O, when it first crossed his desk, about Democrats who voted in favor of the budget, Stein said he thinks “that’s a sign that there’s some good things in the bill and there’s some bad things in the bill.”
Teachers will get an average raise of 8%, with the highest raises for starting teachers.
Law enforcement raises range from 10.1% to 27.5%.
Most state employees, UNC System and community college employees will receive 3% raises across the board.
The House and Senate each passed its own budget bill in 2025, but top Republican negotiators failed to reach a final deal for a year. The main debate was over the amount of raises and tax cuts.
Republican leaders
Berger said in a news release after the budget was signed that the spending plan builds on more than a decade of GOP-led fiscal policy focused on tax cuts, restrained government spending and economic growth.
Berger said he was “glad Gov. Stein recognizes how vital this budget is for the people of North Carolina.”
Hall said in a news release that “today, the best budget in decades becomes law, delivering historic raises for teachers and law enforcement, as well as tax relief for the working men and women of our state. 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.”
Stein told reporters after the budget signing that “when you have a massive bill, $35 billion budget, there’s a lot of give and take, there’s a lot of compromise.”
Stein said he had spoken with Hall on Tuesday to tell him he would be signing the budget and appreciated several provisions in it, but noted there were also things he did not like and areas where they would continue to work. Stein said Hall told him, “’Look, in this budget there are things that I don’t like. In this budget, there are things that the president pro tempore doesn’t like.’ That’s what happens in a democracy.”
Republican committee chairs “did a good job” engaging and working with his Cabinet secretaries on provisions in the budget, Stein said.
Americans for Prosperity, a conservative advocacy group, said in a news release that “this budget proves that low taxes and responsible spending can go hand-in-hand. North Carolinians deserve nothing less, and today’s signature means that relief is now on the way.”
The group said the budget “cements the legacy Senator Berger has built over his years leading the Senate, while clearly outlining the vision Speaker Hall has for the future of our state.”
Berger lost his primary in March and will leave the legislature and his leadership role at the end of the year, opening the door to new dynamics as lawmakers prepare to restart the budget process next year, with a new spending plan due in July.
This story was originally published July 7, 2026 at 10:37 AM with the headline "NC budget with year-delayed raises is now law. Gov. Stein signs spending plan."
