RALEIGH, N.C. (WNCN) – With the nation’s inflation rate at a 40-year high, leaders in the General Assembly say they’re nearing an agreement on a proposal to raise pay for state workers and teachers as they aim to end the legislative session in the next few weeks. 

The inflation rate rose in May to 8.6 percent, according to a new report Friday by the Bureau of Labor Statistics. 

While state workers are already set to receive raises in the new fiscal year that begins July 1, Gov. Roy Cooper (D) and Republican legislative leaders agree they aren’t high enough. Not only is state government struggling to fill open positions, it’s dealing with significantly high turnover.  

The vacancy rate across state government was nearing 20 percent last month, and in 2021 the turnover rate for state employees in their first year on the job was 36 percent, according to the Office of State Budget and Management.  

“I think we’re really close on the pay raises,” said Republican House Speaker Tim Moore. “Whether it’s teachers, whether it’s local building inspectors, law enforcement, you name it, really the whole gamut there’s some issues. So, we know we’re going to have to do more on salaries. I mean, we’re just gonna have to.” 

Most state workers are slated to get a 2.5 percent pay raise. Gov. Cooper proposed doubling that to 5 percent and offering retention bonuses for employees. 

Ardis Watkins, executive director of the State Employees Association, said that wouldn’t be enough. With the state having a surplus of more than $6 billion this year and next year, she urged state leaders to provide more than that.  

Watkins noted while the vacancy rate has climbed across state government, it’s especially high in some prisons and healthcare facilities.  

“And, of course, you’ve got prisons and HHS institutions that are above 50 percent vacancy rates for staff. So, it’s a crisis,” she said. “If you get over 30 percent vacancy rate in a prison, you’ve got a very dire situation. And, you’re looking at that across the board.” 

Speaker Moore also noted state leaders are planning to budget additional money for construction projects they’d already approved last year because the cost to do them will be even more than anticipated. Moore said Republicans are setting aside about $250 million for those added costs. 

“That’s to just go in and stabilize the projects that we already funded. I mean, it’s that significant,” Moore said. 

Democrats have pushed for the state to use about $1.3 billion of the surplus to send out a $200 rebate check to every adult with a valid North Carolina drivers license, arguing it would help people dealing with rising gas prices. 

Republicans haven’t ruled out a tax rebate but say they would prefer to cut income taxes instead. Moore said they’re still negotiating a tax proposal along with other key provisions in the state budget before taking that plan to Gov. Roy Cooper (D) to see if he would support them.  

Cooper did not include tax cuts in his budget proposal last month but has since said he’s open to the rebate idea.  

Republican Senate leader Phil Berger said lawmakers are still “on track” to wrap up the legislative session by the end of the month.