Senate Leader Phil Berger (R-Rockingham) and House Speaker Tim Moore (R-Cleveland) held a joint press conference Monday to announce details of the roughly $23 billion budget and tax relief agreement reached between the state House and Senate.
As a result of responsible budgeting decisions, millions of middle-class families and job-creating small businesses will keep more of their earnings under this plan. The 2017 state budget delivers $530 million in tax relief, with 99 percent of taxpayers either paying less or paying no state personal income taxes at all.
Under Republican legislative leadership, the state has seen hundreds of millions of dollars in budget surpluses – and billions in savings reserves – through tax relief and balanced budgeting that helped spur economic growth. Under previous leadership, North Carolina faced teacher pay cuts and furloughs, as well as historic budget deficits, despite Democrats raising sales tax rates in 2003, 2005, 2007 and 2009.
The 2017 compromise budget increases spending by three percent over last year’s budget and focuses that increase in key areas, like providing nearly $700 million more for public education. The budget continues implementing a plan announced last year to dramatically increase teacher pay – providing teachers an average 3.3 percent raise this year and 9.6 percent raise over two years, while also ensuring they earn far more over the course of their careers.
Along with substantially increasing school principal pay, it also directs more than $180 million in the first year alone toward compensation increases to state employees, providing them a $1,000 across-the-board raise. And it provides a permanent cost-of-living adjustment to state retirees.
It provides $100 million in disaster relief assistance to victims of Hurricane Matthew and adds $363 million to the state’s rainy day fund – bringing the savings reserve to its highest total ever.
And it includes provisions to fund public school construction in economically struggling, rural counties, add thousands of slots to the pre-K program, offer opioid and substance abuse treatment statewide and create a program for local communities to improve public infrastructure to help attract major industrial employers.
“I commend my Senate and House colleagues for their commitment to delivering substantial tax relief to the middle class, continuing our multiple-year effort to dramatically increase teacher pay and improve education outcomes, and helping rebuild communities devastated by Hurricane Matthew – while saving for a rainy day,” said Berger. “Gov. Roy Cooper should support this plan that achieves what he has said are important priorities for our state.”
“Gov. Cooper will sign this budget if he cares about increasing the zero-tax bracket for low-income North Carolinians, keeping a long-term commitment to increasing teacher pay, providing disaster relief to hurricane-hit regions and protecting the state from future emergencies through smart savings and responsible spending,” said Moore.
Additional key provisions of the budget include:
Salaries and Benefits
- Keeps the plan to dramatically increase average teacher pay from last year’s budget, investing more than $100 million in the first year alone.
- This is in addition to the substantial teacher pay raises legislators passed in 2014, 2015 and 2016.
- Incorporates a new plan to let highly-qualified new teachers begin at a higher pay grade on the salary schedule, providing financial incentive to those who accept positions in low-performing schools, are licensed in special education or STEM classes or meet other criteria.
- Includes roughly $25 million to expand a performance-based bonus program to top-performing 4th and 5th grade reading teachers and 4th-8th grade math teachers, based on EVAAS growth scores.
- Allocates $10 million over two years for a bonus program for veteran teachers with more than 25 years of experience.
- Provides more than $35 million to substantially increase principal and assistant principal pay, including funds for performance bonuses for principals.
- Includes $10 million in additional compensation for community college employees.
- Provides a $1,000 salary increase to state employees.
- Offers experienced-based step increases to teachers, State Highway Patrol troopers, clerks and magistrates.
- Provides $10 million in the biennium toward hard-to-hire positions across state government, such as health care technicians and nurses.
- Designates roughly $4 million to allow Gov. Cooper to increase the base salary ranges for many state workers.