Senate Approves Final Budget that Delivers Dramatic Teacher Pay Raise and Middle Class Tax Cut


The North Carolina Senate gave approval to a $22.34 billion final state budget that invests in public education and other core priorities, cuts taxes on the middle class and bolsters the state’s savings – all while raising average teacher pay above $50,000 for the first time in state history.

The final budget responsibly controls the growth of government spending with a 2.8 percent overall increase and, among other highlights:

• Increases education funding by $512 million over the enacted 2016-17 budget.
• Delivers major tax relief to the middle class and small businesses by making the first $17,500 a family earns exempt from income tax over the next two years. This means a family making the N.C. median household income of $44,000 annually will see an additional tax cut of $110 next year alone.
• Continues the commitment made by Republican state leaders to dramatically raise teacher pay by including a plan to boost average teacher salaries to $50,186 next school year and to nearly $55,000 within three years.
• Provides more than $550 million in salary and benefit changes for state workers – including a 1.5 percent permanent pay increase and 0.5 percent one-time bonus for state employees, over $80 million for merit-based bonuses, and a 1.6 percent cost of living bonus for state retirees.
• Includes measures to help make college far more affordable and accessible to students across the state and to help strengthen and stabilize public universities with lower enrollment.
• Increases funding for the Strategic Transportation Investment (STI) law by over $32 million, which will allow new highway projects to be added over a ten-year period.