RALEIGH, N.C. (WNCN) – North Carolina Republican legislative leaders are announcing a state budget deal Tuesday that includes larger raises for state employees than currently planned.

Senate Leader Phil Berger (R-Rockingham) and House Speaker Tim Moore (R-Cleveland) unveiled the compromise on Tuesday, a day after Moore announced a deal between the House and Senate.

The budget includes:

  • Most state employees would receive a 3.5 percent raise as opposed to 2.5 percent as currently planned (takes effect July 1). There are additional raises for certain positions, such as in law enforcement.
  • Teachers would receive a 4.2 percent on average as opposed to 2.5 percent as currently planned. There are also bonuses tied to student growth.
  • Non-certified school staff (cafeteria workers, bus drivers) would get either a 4 percent raise or have their pay boosted to $15 per hour (whichever is greater)
  • $1 billion for a newly created “State Inflationary Reserve” in anticipation of a possible recession. 
  • Increases the rainy day fund to $4.75 billion. 

The budget proposal does not expand Medicaid. The Senate already has passed a bill to do that.

The House is considering a different approach that would authorize Gov. Roy Cooper’s administration to negotiate an agreement with the federal government before the lawmakers would vote on it in December.

Gov. Roy Cooper (D) released the following statement leading up to the announcement from Republican leaders:

“I’m encouraged that both the House and Senate agree that North Carolina needs to expand Medicaid. It is imperative that an agreement is reached to get this done now. I will review the full budget when it is released.”

The budget agreed upon last year already drops the personal income tax rate incrementally until it reaches 3.99 percent in 2027.  

Republicans had floated the idea of dropping it even further and accelerating the timeline under which that would occur in light of the $6.2 billion surplus anticipated this year and next year. 

Sen. Berger (R-Rockingham) was asked about that a few times but didn’t give a clear answer as to why Republicans decided against that. 

“Those things are part of the understanding of the larger picture which is that the budget we have before us and we will vote on. And, some things made the cut and some things didn’t,” Berger said. 

Democrats opposed the idea. They’ve proposed sending a one-time $200 gas tax rebate to all adults with a valid NC driver’s license. Republicans did not include a tax rebate in their proposal either.

Furthermore, the State Employees Association of North Carolina released a statement just after 9:30 p.m. Tuesday asking Gov. Cooper to veto the budget and send it back to the General Assembly.

“It’s time to do better by state employees and retirees,” the statement said. “Employers in North Carolina and all around the country are responding to their staff shortages by increasing pay and benefits in order to be competitive in the market. The State of North Carolina has record staff vacancy rates but the legislature is choosing to hoard money rather than give state employees reason to stay.”

It also posed the question “Budgets are always about priorities. This budget shows state employees and retirees that they are not a priority. So why would they stay?”

The statement continued, “The General Assembly should have shown its employees that it values them and the services they provide to taxpayers. It should have remembered retirees (who have not gotten a COLA in years) in a meaningful way.”

Finally, the statement concluded with, “When times have been bad in North Carolina, state employees were told to wait until the good times and they would be appreciated.  The times have never been better, but the appreciation is not there.

This would be the time to say “thank you” to state employees. Thank you for coming to work every single day during COVID. Thank you for leaving your families at home in a Hurricane to put our roads back together. Thank you for taking care of people who society leaves behind. Thank you for making North Carolina a beautiful and efficient place where businesses choose to locate.

State employees will continue to go to work tomorrow no matter what the legislature and Governor do with this budget. We will protect citizens from harm, we will fix roads after storms, we will provide care for the most vulnerable in our population, we will make sure North Carolina continues to be the best that it can be. That’s what we do. But the sad truth is that economic realities are forcing even the most dedicated employees to leave.

It is shameful that state employees and retirees are not appreciated the way they appreciate their State and the North Carolinians they serve.”