(The Center Square) – Votes are planned Wednesday and Thursday in the Senate and the House of Representatives for North Carolina’s state budget, a spending plan one year late and emerging from respective Republican majorities at odds on priorities.
In the final analysis, the $34.4 billion outlay for fiscal year 2027 will expand Hurricane Helene relief with $700 million and add $450 million to the Savings Reserve in the General Fund – often called the rainy day fund – to lift its balance to more than $4.2 billion.
The state’s rapidly growing population of 11.2 million will get billions of dollars in tax cuts; have 8% average pay raises for teachers amid increases across the board for all state employees; and send more than $1 billion into funding the state’s Medicaid program.
Oversight to combat fraud in Medicaid is within the spending. The state auditor’s office is adding 25 positions.
At the 2010 midterms, Republicans won majorities in both chambers of the General Assembly for the first time in 140 years and started enacting legislation to change the budget deficit that ranged between $800 million and $1.2 billion. They also prioritized lowering individual and corporate income taxes.
In less than 15 years, the reserves turnaround was roughly $6 billion to a surplus of $5 billion prior to Hurricane Helene last fall. The individual income tax system with 2010 rates of 6%, 7% and 7.75%, with potential for a surtax on higher earners, is guaranteed to be down to 2.99% by 2032 with revenue triggers to eventually drop it to 2.49%.
“Our state’s fiscal health remains in great shape,” said Sen. Phil Berger, R-Rockingham, the president pro tempore of the chamber. “This is a responsible spending plan that takes aim at bureaucratic bloat without endangering core services. This keeps our promise to reduce the tax burden for all North Carolinians, while expanding access to incredible educational opportunities, keeping our communities safe, and solidifying North Carolina’s status as the best state in the nation.”
His counterpart in the House of Representatives, Caldwell County Republican speaker Destin Hall, agreed.
“This budget invests in the people of North Carolina. It 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. Every dollar reflects our commitment to build a North Carolina that is a better and more affordable place to live, work and raise a family.”
Sales tax exemptions on electricity for data centers are repealed.
The average raise for public school teachers is 8%, with a beginning annual teacher salary before local supplements increased to $48,000. State troopers are getting a 17.7% raise, and civilian personnel with the State Highway Patrol will get 11.5% raises.
Subsidized childcare affordability is enhanced with $100.8 million from federal block grants increasing provider reimbursement rates. Waiting lists for working families should be reduced, and a statewide reimbursement floor will be provided.
Affordable housing access is expanded in a $35 million investment.
Budget writers released $208.5 million for the North Carolina Children’s Hospital from ARPA Temporary Savings Reserve.
The state’s public university system is getting appropriation of $1.6 billion for capital projects.
The budget will fulfill a commitment to JetZero at Piedmont Triad International Airport, sending $133.9 million for improvements at the project site.
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