Senate Leader Phil Berger (R-Rockingham) and House Speaker Destin Hall (R-Caldwell) held a press conference on Tuesday to announce the framework for a state budget deal that has been more than a year in the making. The House and Senate each passed budget proposals in March and April of 2025 but quickly ran into roadblocks centered around personal income tax rates that derailed negotiations.
Sen. Berger and Speaker Hall announced an agreement for average teacher raises of 8%, the largest increases in more than a decade. The deal also provides $1,000 bonuses for teachers with more than 16 years of experience, and $500 for those with fewer years of service.
On Wednesday, legislative leaders released a document detailing teacher raises based on level of experience. Early career teachers would see their pay increase by up to 17%, while teachers with more than 15 years of experience would get a 5.5% raise.
A raise of 3% for state employees is also part of the deal, with some receiving higher raises. In addition, employees making less than $65,000 a year would receive a bonus of $1,750, and a $1,000 bonus would be given for those making more than that threshold. State retirees will also receive a one-time 2.5% bonus. Although not stated at the press conference, it is anticipated that school employees other than teachers will receive the same pay increases and bonuses as noted for state employees.
The deal includes dropping the individual income tax rate to 3.49% in 2027, which is also what it would have been under the Senate’s prior plan for tax cuts. That rate would remain in place for three years.
Both the House and Senate agreed to pass bills putting a pair of tax-related amendments on November’s General Election ballot. The Senate agreed to pass the House’s amendment establishing a limit on how much city and county governments could raise property taxes each year. Additionally, both chambers agreed to a new amendment that would cap the state’s personal income tax at 3.5%.
The House and Senate Appropriations chairs and subcommittee chairs have begun working out the details to develop a comprehensive budget package. Those negotiations may take around a month, and unless additional snags occur, the full budget should be released by mid-June.
NCASA is grateful for the budget framework that includes meaningful raises for teachers and will continue our advocacy efforts to ensure the full budget package prevents any troubling line-item cuts to K-12 funding and will seek additional investments to support local public schools.
NCASA members are encouraged to utilize the Advocacy Center at www.ncasa.net for key budget talking points to share with your own House and Senate lawmakers as the talks continue.