Republican-Led General Assembly Passes Budget, Addressing Affordability and Public Safety Concerns

Jul 2

This week, as Short Session begins to close, the Republican-controlled North Carolina House and Senate Leadership announced and help pass an updated budget for the State of North Carolina. During the Long Session last year, the House and Senate did not reach agreement, and North Carolina used the budget from the previous year to meet the needs of the state.

The budget passed the North Carolina Senate in a 36-13 bipartisan vote and 92-23 on the second reading in the House, with the third reading scheduled for today. Once the House passes the budget, Governor Stein will either sign, allow it to become law without his signature, or veto the budget. Given the broad bipartisan support in both chambers, it is unlikely that he will veto.

“Our state’s fiscal health remains in great shape. This is a responsible spending plan that takes aim at bureaucratic bloat without endangering core services,” said Senate Leader Phil Berger. “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.”

Top Line Information

A $34-billion spending plan that provides guaranteed tax relief for all North Carolinians and increases salaries for state employees and law enforcement officers.

Expands Hurricane Helene relief efforts to ensure our mountain communities can continue to rebuild.

Sets aside more than $450 million for our state’s Rainy Day Fund, bringing the total up to just over $4.2 billion

Releases $208.5 million for the N.C. Children’s Hospital from the ARPA Temporary Savings Reserve

Appropriates $1.6 billion for capital projects throughout the state for state agencies and UNC System campuses, including $200 million for state agency repairs and renovations and $200 million for UNC repairs and renovations

Secures funding for the Propel NC workforce-driven funding model to ensure that North Carolina’s community colleges are prepared to meet the needs of all students and job creators

Provides critical funding to maintain North Carolina’s participation in SNAP. The Federal government changed how SNAP administrative costs are shared, and this funding covers the state’s requirement to ensure continued food assistance for eligible North Carolinians.

Funds the state’s Medicaid program with an appropriation of over $1 billion

Funds new Driver License Examiner positions to provide extended weekday and Saturday hours at high-volume driver license offices

House Speaker Destin Hall said, “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.”

Detailed Breakdown Of The Budget:

Salary Increases

An average 8% raise for teachers and bonuses based on years of service

Boosts the base salary for beginning teachers to $48,000 before local supplements

Assistant principals, who are paid based on the teacher salary schedule, will receive an average 6.3% salary increase

Across-the-board 3% increase for all state employees and a bonus based on their salary

School principals and noncertified staff will also receive this 3% raise

Average 20.3% raise, including step increases, for State Bureau of Investigation and Alcohol Law Enforcement officers and SBI civilian personnel will receive an average of 27.5%

Average 17.7% raise, with step increases, for State Highway Patrol officers and up to 11.5% for State Highway Patrol civilian personnel

Correctional officers will receive an average 15.4% salary increase, with step increases.

Probation and Parole officers will receive an average 10.1% salary increase, including steps

13% raise for other law enforcement officers across state government — including State Capitol Police

Funding for a one-time bonus of $1,750 for local law enforcement officers across the state

Tax Package

Removes upcoming revenue triggers and locks in a schedule of set Personal Income Tax rate deductions, guaranteeing a rate of 2.99% by 2032, with additional quarter-percent rate reductions based on revenue triggers, with the goal of hitting a 2.49% rate

Closes the loophole on large hospitals and their affiliates to be treated as a single entity for the purpose of sales tax reimbursements, saving taxpayers millions

Repeals the sales tax exemption on electricity for data centers

Education

Invests in proven strategies that work for students by providing an additional $30 million for Advanced Teaching Roles salary supplements, and providing an additional $2 million to allow more schools and districts to participate

Provides funding to ensure students have the foundational mathematics skills to be successful, including $6 million for low-performing schools to have a universal screener, $5 million to pilot and study mathematics tools, $4 million for mathematics training for middle school teachers, and $10 million to develop a standard math curriculum across the state in grades K-8

Enhances our state’s literacy instruction by funding $13.8 million for middle school literacy professional development and expanding the early literacy screener to grades 4 and 5

Reinvests savings from students enrolling in a private school using the Opportunity Scholarship program from the 2024-25 and 2025-26 school years. The $35.8 million in savings is reinvested in public schools through the funding of mathematics curriculum, literacy professional development, and bonuses for school nutrition and custodial staff

Expands training programs for students with intellectual and developmental disabilities(IDD) to 10 more community college campuses

Provides $6 million to assist community colleges in starting high-cost workforce programs to meet the workforce demand

Funds enrollment growth across UNC System campuses

Expands the Cheatham-White Scholarship program to Winston-Salem State University and increases the number of scholarships at North Carolina Central University and North Carolina Agricultural and Technical State University

To meet the growing needs of our healthcare workforce, this budget provides $20 million to support the development and expansion of related programs at UNC System schools

Allocates $10.6 million to NC A&T to help it achieve R1 status

Provides funding to clear the Personal Education Student Accounts for Children with Disabilities program waitlist, bringing the total appropriation to $94 million

Health & Human Services

Supplies funding to improve county SNAP operations, including needed IT enhancements and positions at DHHS to support counties, to reduce payment error rates and avoid federal penalties that will go into effect next year

Provides $5 million in state matching funds for SUN Bucks, which will draw down $60 million in federal funding to provide summer food assistance to eligible children while school is out

Increases Medicaid reimbursement rates to strengthen the Direct Care workforce serving individuals on the Innovations Waiver and those receiving Medicaid Personal Care Services

Increases funding for Medicaid program integrity to strengthen oversight, prevent fraud, and ensure taxpayer dollars are well spent

Provides 12 new positions at Medicaid’s Office of Compliance and Program Integrity

Provides funds for the Department to partner with our state’s Government Data Analytics Center to enhance technology for fraud, waste, and abuse prevention and to support recovery efforts

Appropriates $12.7 million to update the Medicaid Enterprise System to begin replacement of its legacy system. This will improve data analytics to help identify outlier claims and improve provider data management tools to prevent bad actors from enrolling

Strengthens oversight of certain high-growth Medicaid services by requiring health plans to establish closed networks for Peer Support, Research-Based Behavioral Health Treatment (RB-BHT), and Community Support Services

Appropriates nearly $80 million in opioid abatement projects to aid in the prevention and treatment of opioid use disorder

Provides $9.1 million to food banks located across North Carolina to help local organizations provide food assistance to families in need

Provides funds to establish a Child Welfare Escalation Team, which will support county DSS offices and provide additional reviews of abuse and neglect reports involving children in high-risk homes, while also expanding training for child protective services employees and social workers to better identify and respond to abuse and neglect

Repeals the state’s archaic certificate of need laws for inpatient rehabilitation services, facilities, and beds. This will increase competition, expand consumer choice, and help lower healthcare costs for patients, employers, and taxpayers

Provides funding to increase the fee paid to Medical Examiners for each investigation from $200 to $400

Provides an additional $100.8 million from federal block grants to increase childcare subsidy rates to the recommended level from the most recent 2023 Market Rate Study and establishes a statewide rate floor

 Agriculture and Natural Resources

Increases funding for Farmland Preservation by $48.9 million, including a $2 million increase in recurring funds

Provides $2 million nonrecurring for the Agriculture Cost Share Program, bringing the total funds to $6 million

Requires Department of Environmental Quality participation in FAST-41 permitting for participating natural gas generation and pipeline projects

Creates a $12.5 million emergency loan reserve for operators of distressed private water and wastewater systems

Eliminates vehicle emissions inspections statewide following EPA approval

Expands dam safety support for inundation mapping and overtopping studies

Creates and funds an AI-assisted environmental permit review pilot program

Provides $4.5 million for Flood Resiliency Blueprint grants and $850,000 for up to six time-limited positions to continue implementation of the Blueprint

Funds PFAS and emerging contaminant research through the N.C. Collaboratory

Requires PFAS studies of industrial dischargers, significant industrial users, wastewater systems, and biosolids

Provides $45 million for the Emerging Contaminant Mitigation Fund to help public water and wastewater systems address sampling, treatment, remediation, and technical assistance needs

Provides $15 million for PFAS research and remediation related to fire stations, including temporary water supplies and filtration.

Increases ongoing funding to the Bernard Allen Drinking Water Fund by $200,000 and provides a one-time allocation of $10 million for emergency drinking water addressing PFAS and groundwater contamination

Provides $15 million nonrecurring for Complete the Trails and Great Trails grants

Allocates $6.2 million recurring and $1.3 million nonrecurring for 54 new positions and operating costs for the new Asia exhibit at the North Carolina Zoo

Commerce and Economic Development

Provides $25 million for additional select sites and allows EDPNC to utilize a national site selection firm

Allocates $46.3 million in block grant funds for infrastructure, economic development, neighborhood revitalization, rural community development, and administration

Fulfills our commitment to fund the JetZero economic development project at PTI Airport by providing $133.9 million for improvements at the project site

Provides $12 million to Wilson Community College to support the expansion of existing construction of a workforce training center

Disaster Recovery & Resilience

Appropriates more than $700 million for Hurricane Helene relief. Funds will be used to cover ongoing matching needs for FEMA reimbursements, grants to support local government capital needs, fire stations, and rescue squads, cash-flow loans to local governments, construction of privately owned roads and bridges, wildfire preparedness, dam repairs, and efforts to boost tourism to the region.

$450 million to cover the state and local share of costs for federal disaster recovery programs such as the Federal Emergency Management Agency’s (FEMA) Public Assistance Program, the Hazard Mitigation Grant Program, and direct federal assistance from the U.S. Army Corps of Engineers

$65 million for FEMA-ineligible local government disaster recovery capital projects, including up to $30 million for volunteer fire departments

$43 million to non-profit organizations for housing and private road/bridge recovery projects.

$40 million to the Division of Community Revitalization at the Department of Commerce for the Temporary Relocation Assistance program to facilitate and expedite housing recovery projects

$22 million for state-supported private road/bridge recovery projects

Justice and Public Safety

Increases the contract rate for Guardian ad Litems

Creates additional magistrates and deputy clerks of courts across the state

Provides $2.9 million for additional Assistant District Attorneys across the state and $600,000 for additional ADAs to serve as Special Assistant United State Attorneys

Increases private assigned counsel funding to support program operations and rate increases

Funds the use of tracking software in state prisons to document and manage staff interactions

Allocates funds to put cameras in about 660 state-owned vehicles to improve security during offender transports

Appropriates $3.5 million to purchase new body scanners in close custody prison facilities

Supports 10 time-limited capital criminal appeal attorneys to meet the needs of Iryna’s Law

Provides $1.5 million to the Association of Chiefs of Police to provide local law enforcement agencies with funding to support employee performance and wellness management systems

Provides funding for the Sheriffs’ Association to complete an RFP for a statewide system to support telehealth IVC evaluations

Funds 24 positions to support investigations and enforcement related to drug crimes, vapor products laws, and other areas of SBI jurisdiction

Provides $30 million for school safety grants

Includes funding to establish a critical incident mapping program for public schools

Provides $300,000 nonrecurring for Behavioral Threat Assessment Management to assist with early detection and prevention of school-based safety threats

Appropriates $200,000 nonrecurring to purchase specialized safety equipment for the State Highway Patrol

Provides funding for body-worn and car cameras for the State Highway Patrol

General Government

Allocates funding for 25 positions at the Office of the State Auditor, as well as new regional office leases in Charlotte and Asheville

Supports the Office of State Budget and Management with funds for seven positions on the Grants Management Team

Provides funds for two additional accountant positions in the State Controller’s office to assist in the Annual Comprehensive Financial Report

Includes about $10.4 million to begin the replacement of the State HR Payroll system

Provides funding for 14 positions at the State Board of Elections

Includes $15 million to upgrade the State Election Information Management System (SEIMS)

Supports the State Veterans Cemetery by funding new maintenance positions

Authorizes $40 million for the replacement of the Fayetteville Veterans Home

Provides funds for eight positions in the Secretary of State’s office to support business registration and filing process

Transportation

 Increases funding to the General Maintenance Reserve by $28.7 million to improve road maintenance statewide

Provides $14 million in one-time funding to the SPOT safety program to support small improvement projects designed to increase safety

Funds wildlife highway crossings at $10.2 million annually to plan and construct highway crossings that will improve safety and wildlife connectivity

Provides funds for 30 additional positions in the Division of Motor Vehicles to provide compliance and oversight support

Additional funding for Driver License Examiner salaries, increasing base starting pay from $44,210 to $51,980

Provides funds to support staffing and operational expenses for new Driver License Offices in Wake Forest or Rolesville, and Tabor City

Provides nearly $24 million for capital improvements and maintenance at Manns Harbor Shipyard and Ferry Terminals

Funds $4 million for vessel maintenance and repairs at out-of-state shipyards to meet U.S. Coast Guard dry dock requirements

Provides $3.8 million to account for fuel cost overruns in order to avoid route consolidation

Provides initial funding to relocate maintenance yards in Wake and Jones counties

Increases total appropriation to the State Transportation Improvement Program by $122 million to fund new road projects and improvements to existing roads