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Here's a breakdown of NC Republicans' $25.9B state budget plan
NC General Assembly

North Carolina GOP budget writers unveiled a new state spending proposal and accompanying "money report" Monday afternoon.

The budget plan would provide 5% raises to nearly all state employees, reduce taxes, and save billions in the rainy day fund. But it remains unclear if this budget will receive the approval of Governor Roy Cooper, or serve merely as the latest stop in a three-year budget impasse.

North Carolina is the last state in the country to pass a budget, and there's no certainty this one will cross the finish line.

As the unofficial budget week begins, here are some basics:

The proposed spending plan is $25.9 billion, which represents a little more than a 4% increase compared to current spending levels. It includes raises and bonuses for nearly all state employees. For this fiscal year, a salary increase of 2.5% would take place retroactive to July 1st. Another 2.5% raise is included for the 2022-23 fiscal year. Community college, UNC System, and rank and file state employees with an annual salary of $75,000 would also receive a $1,500 bonus. Workers making more than $75,000 would receive a $1,000 bonus.

Public school teachers would see increases in their step schedule under this proposed spending plan. These increases would also result in an average 5% increase over the next two years, according to legislative staff. In addition, K-12 staff would receive the same bonuses as state employees, as well as a $300 additional bonus. Also, public educators would receive a separate $1,000 retention bonus come January. This one-time lump sum would be for teachers still employed who have also completed a COVID-19 training. This bonus amounts to something of a retention bonus and would be paid with federal funds.

This budget also includes a one-time cost of living adjustments for retired state workers, and teachers. The amounts are 2% for this year and 3% for the next fiscal year.

State lawmakers make their latest pass at altering the tax code in this budget. The plan would phase out the corporate tax rate by 2029. Presently North Carolina has the lowest corporate rate (2.5%) of any state in the country with a corporate tax. This bill also eliminates taxes on military pension income.

The vast majority of North Carolinians would see a tax cut under this budget. The standard deduction – your zero-tax threshold – would increase for all filers. Meanwhile, the personal income tax rate would be cut (or reduced) in each of the next six years. Presently the personal income tax rate is 5.25%. In 2022 it would drop to 4.99%, and then eventually down to 3.99% after 2026.

Between the budget bill and the money report there are nearly 1400 pages to sift through, so rest assured reporters will be finding other morsels in the days ahead.

Here are few other provisions:

  • Another $2.5 billion will be slotted to the state’s rainy day fund, making that reserve approximately $4.25 billion by the end of the next fiscal year
  • $100 million in supplemental K-12 salary funds for low wealth counties
  • $150 million for testing and remediation of lead and asbestos from public schools and child care facilities
  • $38.1M to extend Medicaid benefits for mothers who are postpartum
  • The GOP budget plan also would fund the relocation of the UNC System offices from Chapel Hill to Raleigh's downtown state government complex. The proposal would provide $1.8 million in the first fiscal year of the two-year budget to study the move, and then more than $11 million in the biennial plan's second year for planning and design of the UNC System's new government complex facilities, a project ultimately authorized to cost $100 million.

WUNC's Mitch Northam contributed to this report.

Rusty Jacobs is WUNC's Voting and Election Integrity Reporter.
Jeff Tiberii is the co-host of WUNC's "Due South." Jeff joined WUNC in 2011. During his 20 years in public radio, he was Morning Edition Host at WFDD and WUNC’s Greensboro Bureau Chief and later, the Capitol Bureau Chief. Jeff has covered state and federal politics, produced the radio documentary “Right Turn,” launched a podcast, and was named North Carolina Radio Reporter of the Year four times.
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