RALEIGH, N.C. (WNCN) — Lawmakers are working to finalize the state budget, and many are calling for higher pay for state employees.

It comes as the shortage of state employees is having an impact beyond just unfilled positions.

Taxpayers pay $500 million each year in turnover costs when state employees leave, according to the State Employees Association of North Carolina.

For 50 years, Deputy Commissioner of Agriculture David Smith has seen the problem unfold.

“In my five decades at state government, I have never seen it this bad,” he said. “Our vacancies are up, our applications are down. For some classifications, we cannot get a single candidate to apply.”

According to the Office of State Human Resources, 37 percent of new hires leave within a year.

As of Wednesday morning, about 1 in 4 state jobs remained vacant.

The State Employees Association of North Carolina is calling on lawmakers to invest in state employees to end the crisis.

“We’ve got issues that are going to lead to tragedy,” said Ardis Watkins, Executive Director of the State Employees Association of North Carolina. “When people are asked ‘why are you leaving,’ they’re all saying it’s the pay. Nobody’s saying ‘I just didn’t like the state government experience.’ They’re all saying it’s the pay.”

As lawmakers work to reach an agreement on the state budget, the association is asking for at least a five percent raise in 2023, a five percent rise in 2024 and a meaningful bonus.

They argue that the money is already being spent to replace and train employees.

“There is great sense to just shifting where you’re spending that money,” Watkins said. “Instead of $500 million-plus going out the door, invest it in people who help the people.”

“We as a state need to look at attracting and retaining good employees,” Smith said. “It’s an investment to the citizens of this state.”

Lawmakers hope to reach an agreement on the budget by mid-June.