Budget Receives Tentative Approval in NC Senate

2023 Appropriations Act strengthens school choice, cuts taxes, and improves rural infrastructure

Decade of success to continue upon enactment of two-year spending plan

Final vote scheduled for Friday

Raleigh, N.C. — Today, the “2023 Appropriations Act” passed its second reading in the North Carolina Senate. A final procedural vote will be held on Friday before the state budget goes to Gov. Roy Cooper for his consideration.

Senate Appropriations Chairs Sens. Brent Jackson (R-Sampson), Ralph Hise (R-Mitchell), and Michael Lee (R-New Hanover), released the following statement on the budget passing the Senate:

“It takes time, collaboration, and a lot of back-and-forth to produce a good budget, and that’s exactly what we have here. The budget provides the essential services North Carolinians need without encroaching on their freedoms. Our smart tax policy puts more money back into the pockets of hard-working families, and we’ve included infrastructure upgrades that reach every corner of the state. We look forward to this budget becoming law, and continuing the conservative governance that has helped make North Carolina a leader in the nation.”

Details of the budget are below. You can find the bill text and money report online at the General Assembly’s website.

Topline

• Appropriates a total of $29.8 billion in FY 2023–24 and $30.9 billion in FY 2024–25.
• Grows the Rainy Day fund balance by $125 million to just under $5 billion.

Taxes

• Cuts taxes by $1.2 billion for North Carolina families and businesses over the next two years.
• Accelerates the scheduled personal income tax cuts, dropping the rate to 4.5% in 2024 and down to 2.49% if certain revenue triggers are met.

Salaries

• Provides most state employees with a 7% pay raise across the biennium.
• Gives teachers an average pay raise of 7% over the biennium.
• Average teacher pay will increase to $60,671 by 2024–25, which is on par with the state median household income.
• Starting teacher pay will increase by 11% to $41,000 in FY 2024–25.
• The Advanced Teaching Roles program will be expanded and provided $10.9 million on a recurring basis for salary supplements for teachers serving in advanced roles.
• An additional recurring appropriation of $30 million will be provided for the teacher supplement assistance program allotment. The total available for the state-funded allotment will now be $200 million annually.
• Increases pay for beginning nursing faculty at community colleges and the UNC System by at least 10%.
• Boosts the Labor Market Adjustment Reserve so state agencies will receive 1.5% of their payroll to provide merit-based pay raises or bonuses.
• Most state law enforcement officers will receive between a 5.5% and 11% raise depending on their agency, rank, and current pay scale in the first year.
• Within the Department of Justice and Public Safety, juvenile justice employees will now be on a pay scale that aligns with the structure of the correctional officer salary schedule.
• To support recruitment and retention efforts at the State Highway Patrol, rank-and-file deputies will receive an 11% salary increase.
• Provides bus drivers a 6% pay increase in the first year of the biennium.
• Gives state retirees a 4% nonrecurring cost of living supplement in the first year of the biennium.

Capital/Infrastructure

• Provides $2 billion for more than 200 local water and wastewater projects across the state.
• Budgets an additional $700 million for highway maintenance programs, including contract resurfacing, general maintenance, and bridge construction and preservation.
• Appropriates $5 billion into the State Capital and Infrastructure Fund across the biennium, including $1.67 billion for new state agency and UNC capital projects.
• Notable projects include increasing total authorization for ECU Brody School of Medicine, advanced planning funds for a new business school at N.C. State University, and additional funds for the planning and construction of the Downtown Education Campus, which once completed will house the UNC System Office, the Community Colleges System Office, the Department of Public Instruction, and the Department of Commerce.
• Replenishes the state agency repair and renovation accounts by $200 million each year of the biennium.
• Appropriates over $530 million across the biennium for UNC System repairs and renovations.
• Completes the four-year community college capital commitment for a total of $400 million.

Education

• Appropriates $17.3 billion for education in FY 2023–24, a 6.1% increase, and $17.9 billion in FY 2024–25, a 9.5% increase.
• Expands the Opportunity Scholarship Program to all students, with the largest scholarships going to students with the greatest financial needs.
• Savings realized by the state from students enrolling in a private school after receiving an Opportunity Scholarship will be reinvested back into the public school system.
• Provides funds to North Carolina A&T to support its efforts to be recognized as a leading research institution and obtain an R1 Carnegie Classification.
• Provides an additional $1.2 million on a recurring basis for the Child Care Grant Program, which supports childcare services for students in the community college system.
• Codifies the Short-Term Workforce Development Grants Program to assist students in covering the cost of attendance for workforce and continuing education courses.
• Provides $2 million nonrecurring in each year of the biennium for aid to students who are on track to graduate from public universities but are at risk of dropping out because of financial issues.
• Includes $35 million in both years of the biennium for school safety grants, which can be used for school safety training, safety equipment in schools, and subsidizing the School Resource Officer Grants program.

Health Care

• Budgets $1.6 billion in nonrecurring federal funds awarded to North Carolina for expanding Medicaid.
• Provides $319 million for the construction of a new UNC Children’s Behavioral Health Hospital.
• Creates the “NC Care Initiative,” a partnership between ECU Health and UNC Health that creates an integrated health network and will feature the construction of three regional health clinics, a behavioral health facility in Greenville, and rightsizing existing parts of their health systems.
• Allocates over $320 million for Community College allied health and workforce training capital needs.
• Uses $40 million for targeted bonuses to employees working in state health facilities and $60 million to increase the wages of direct care workers who provide personal care services to individuals on the state’s Innovations Waiver.
• Provides the Carolina Pregnancy Care Fellowship $6.25 million of new funding in each year of the biennium to support grants to pregnancy centers for services, equipment, training, and instructional materials, for a total for $6.8 million per year.
• Includes $284 million for behavioral health outreach programs, and increases behavioral health provider rates on a recurring basis.
• Increases the autopsy fee paid to autopsy centers, includes $4 million over the biennium to increase the capacity of the Medical Examiner System, and $20 million over the biennium to fund a new county-operated autopsy center to serve the South Piedmont region.

Other Items

• Provides $2.7 million to help implement North Carolina’s voter ID law.
• Provides $50,000 recurring to continue the online application to track mail ballots through the postal stream. The system builds confidence in the integrity of North Carolina’s absentee ballot system.
• Includes $5.6 million to modernize and replace the Statewide Election Information Management System.
• Establishes policies prohibiting the Department of Environmental Quality from denying a permit application or issuing a permit on the condition that developers must first receive another environmental permit, except when required by state or federal law.
• Cuts red tape by reducing processing times for federal air and state stormwater permits issued by the DEQ and allowing most businesses to proceed with construction activities before obtaining an air permit.
• Increases the electric vehicle registration fee to $180 and creates a plug-in hybrid registration fee of $90.
• Creates 12 new positions within the DEQ to mitigate PFAS and other emerging compounds in our water supplies.
• Establishes an independent Office of State Fire Marshal within the Department of Insurance.
• Funds NC Innovation with $250 million in each year of the biennium.
• Allocates more than $107 million for megasites and selectsites across our state, including $10 million to support local governments to conduct their due diligence on new megasites and $97.8 million to support the Megasites Readiness Program.
• Appropriates $10 million to support selectsite readiness efforts.