North Carolina lawmakers release full state budget proposal

North Carolina lawmakers release full state budget proposal

North Carolina Republican lawmakers, who lead both chambers of the state's General Assembly, have released a long-awaited state spending bill with hopes of voting on it this week.

Why it matters: The state has gone more than a year without a budget, as the N.C. House and N.C. Senate remained at odds over priorities, leaving things like raises for teachers and state employees in limbo.

Driving the news: The budget bill, which is more than 600 pages long, was released Tuesday morning. It is the result of months of negotiations between outgoing state Sen. leader Phil Berger and House Speaker Destin Hall.

  • Hall said in a statement that the budget "delivers historic raises, keeps taxes low, strengthens public safety, and protects taxpayer dollars by making targeted investments to crack down on waste, fraud, and abuse."
  • "This is a responsible spending plan that takes aim at bureaucratic bloat without endangering core services," Berger added.

    • Zoom in: Top of the line spending agreements include:

  • A repeal of previously scheduled tax cuts that became a sticking point in negotiations. Income taxes — currently 3.99% — would drop to 3.49% in 2027 and hold there for three years before dropping further to eventually reach 2.49%.
  • Teachers would get 8% raises on average, and a bonus of either $1,000 or $500, depending on their years of service.
  • Other state employees would get a raise of around 3% on average and a bonus of either $1,750 or $1,000, depending on whether they make more or less than $65,000 per year.
  • State law enforcement agents, like State Highway Patrol and state prisons officers, would all get significant raises as part of an effort to fill vacant roles.
  • The N.C. Children's Hospital would get $208.5 million and a provision that would provide antitrust immunity to UNC Health and Duke Health in how they run the children's hospital.
  • NCInnovation, a controversial nonprofit started with $500 million in state funds, is not mentioned in the budget. There had been discussions of clawing back some taxpayer money from it.
  • More than $700 million is being put toward Hurricane Helene relief funds.
  • The tax rate on sports gambling is being raised from 18% to 23%, and, for the first time, UNC and N.C. State's athletic departments would receive a cut of the taxes on gambling.
  • A sales tax exemption on electricity used by data centers would be repealed under the budget, as part of a growing examination of data center operations in the state.

    • What they're saying: Ardis Watkins, executive director of the association representing state employees criticized the legislation.

  • "State employees got no raise last year, while their healthcare costs went up dramatically.  This year, most will only get 3% — which doesn't keep pace with inflation for this year much less makes up for last year," Watkins said in a statement. "If N.C. is being run like a business, it is a business in terrible financial shape."

    • What's next: Lawmakers are combing through the bill ahead of votes in both chambers Wednesday and Thursday.