North Carolina Gov. Josh Stein speaks to reporters as he unveils his two-year budget proposal in Raleigh on March 19, 2025. (Photo: Galen Bacharier/NC Newsline)
Gov. Josh Stein outlined his request for North Carolina’s two-year budget on Wednesday, asking lawmakers to fund pay raises for teachers and law enforcement, an expansion of child care and new affordable housing.
Stein’s budget proposal, the first of his term, outlines a plan to fund the state’s programs and services through 2027. But many of its specifics are likely to be pushed aside by the GOP-led General Assembly, who will negotiate their priorities on their own over the coming months.
The Democratic governor is asking legislators to increase teacher salaries by an average of 10%, boost state law enforcement pay and give state workers a raise. He wants to expand workforce and apprenticeships, including providing free community college for some students. And he’s outlining a range of potential investments in child care, affordable housing and education.
“To me, each of these commitments is delivering on the promise of North Carolina, that where you come from should never limit how far you can go,” Stein said at a news conference Wednesday.
“I’m grateful to the General Assembly for its consideration of the budget, and I look forward to working with them in the coming weeks so that we can do right by North Carolina’s children and North Carolina’s families.”
Last year, Stein’s predecessor Gov. Roy Cooper proposed a $34.5 billion one-year budget with similar mainstay line-items: a pause on Republican-led school vouchers, investment in child care, and pay raises for state workers and teachers.
Stein, while renewing a push for those priorities, is also couching his own request with a warning: that income tax cuts touted by Republicans could lead to a budget shortfall in the coming years.
“The truth is, we are in for some self-inflicted fiscal pain,” he said.
The budget’s second fiscal year will see more uncertainty, Stein’s budget director said, with less tax revenue expected. As a result, some proposed spending has only been outlined for the first year.
“We’ve not sat down to prepare a two-year budget where there’s less revenue in the second year than the first,” said Kristin Walker, the state budget director.
Wednesday’s ask will not be the governor’s last request for spending. In the coming weeks, he will outline a need for additional Hurricane Helene aid, with lawmakers set to send their latest relief package to his desk today.
“I have been encouraged by the conversations I’ve been having with leadership,” Stein said of the dynamic between him and Republican leaders. “I think these priorities make all the sense in the world, and I know they want to do right by the people of North Carolina.”
Taxes, costs of living and health care
Stein is asking legislative leaders to freeze a planned series of income tax cuts. He argues the cuts overwhelmingly benefit the wealthy, and will lead to a potential shortfall.
Republicans are unlikely to comply; they argue that the cuts drive growth in the long run and attract new business.
Instead, Stein wants a trio of tax cuts that he says will benefit working class people: one for families with young children, one for child care costs and one for working families. Other proposed line-items related to taxes and the costs of living include:
- Increasing subsidy rates for child care centers by an average of 13%, allowing them to increase worker salaries.
- Increasing pre-K provider subsidy rates by 20%.
- Loans to build affordable workforce housing, totaling $15 million annually, and using federal and private money ($35 million) for other affordable housing.
- Creating a tax holiday for back-to-school shopping.
In addition, some of Stein’s priorities on health care include:
- Expanding the state’s Healthy Opportunities program.
- An extra annual $20 million for access to OB/GYN care.
- Investing $14.3 million in primary and dental care at rural and community health clinics.
Education
Headlining Stein’s education requests are proposed raises for teachers: increasing the starting salary to $53,000 from its current $42,800, as well as boosting pay for experienced teachers and principals. Also in the governor’s budget request:
- Ending the GOP-led school voucher program for households making over $115,000 annually. For those making under that amount, their children can keep their vouchers for their time in school. No new vouchers would be distributed.
- Making community college free for students pursuing “high demand” sectors of work.
- Free school breakfasts for all students.
- Creating 1,000 new slots in pre-K, and funding summer learning programs.
- New hires for nurses, counselors, social workers and resource officers, as well as grants for school safety.
- A $4 billion bond to repair public school facilities.
- A $300 tax-deductible stipend for teachers to buy school supplies.
“If the General Assembly has any hesitation, it’s easy,” Stein said, as he outlined his request for the bond. “Let the voters decide. Let’s put it on the ballot.”
Public safety and law enforcement
Stein, the former attorney general, wants to increase wages by 6.5% for correctional officers and youth counselors; other law enforcement workers would be in line for a 3% raise. And new graduates and transfers could receive bonuses.
Here’s what else he’s proposing for law enforcement:
- Creating a “fentanyl control unit,” tapping police and prosecutors to focus on the drug.
- Creating a “cold case” unit for sexual assault cases.
- Buying more body cameras, gun locks and gun safes.
State government services
The first year of Stein’s budget would see a 2% pay raise for state employees, as well as a $1,000 bonus. It would also give a cost of living increase for retirees, and improve benefits. Among Stein’s other proposals to improve state government services:
- Creating an ‘Impact Center’ to better track state spending like contracts.
- Funding new DMV offices, expanding existing ones and hiring new examiners.
- Upgrade state IT, HR and banking systems.
- Funding storm and flood mitigation projects in eastern North Carolina.
This is a developing story — check back for updates.