Lawmakers to Release Compromise Budget

Budget reflects considerable concessions to Democrats

Legislative leaders optimistic compromise budget will become law

Raleigh, N.C. — Lawmakers today will introduce a compromise state budget that reflects considerable concessions to Democrats. It’s expected the legislature will vote on the compromise budget this week.

Senate Leader Phil Berger (R-Rockingham) said, “We have made significant progress over nearly two months of good-faith negotiations with the Governor, and I’m optimistic that the budget will have a strong bipartisan vote and that Gov. Cooper will sign it into law.”

Below are details on noteworthy provisions of the compromise budget:

Total Spend

• Net appropriation for FY 2021–22 is $25.9 billion and net appropriation for FY 2022–23 is $27.0 billion.
• The Rainy Day Fund balance will be $4.25 billion at the end of the biennium.

Salaries

• A 5% pay raise for most state employees and an average 5% pay raise for teachers over the biennium.
• Increase the minimum wage for all non-certified personnel and community college staff to $15 per hour beginning in 2022.
• A $2,800 bonus to most teachers using federal funds.
• Bonuses for all state employees using federal funds: $1,500 for state employees who make less than $75,000, and $1,000 for state employees who make more than $75,000. Law enforcement, correctional officers and staff, and 24-hour residential or treatment facility employees receive $1,500.
• $100 million in recurring funds for a new state-funded teacher salary supplement focused on low-wealth counties to help them compete with big, wealthy counties when recruiting teachers. (This supplement is not reflected in the average salary raise figure.)

Capital/Infrastructure

• $6 billion in cash to the State Capital and Infrastructure Fund over the biennium to fund infrastructure projects and pay down debt.
• Begins annual cash contributions to capital and infrastructure projects and debt service totaling $16.1 billion over 10 years.
• Provides $84 million to Elizabeth City State University for a residence hall, sky bridge, dining facility, and flight school.
• Provides $1 billion for broadband expansion.

Taxes

• Increases zero-tax bracket to $25,500.
• Cuts the personal income tax rate from 5.25% to 3.99% by 2027, starting with 4.99% in 2022.
• Increases child tax deduction by $500 per child.
• Eliminates state income tax on military pensions.

Education

• Additional $1.5 billion above the base budget over the biennium in recurring funds for K-12 education.
• $528 million transfer over the biennium from the N.C. Education Lottery to the Needs-Based Public School Capital Building Fund, $200 million to the Public School Capital Fund, and $80 million into a newly created repair and renovations fund. Over the course of the next 7 years, a projected $2.6 billion will be spent on school capital.
• Adds Fayetteville State University to the N.C. Promise program, which guarantees $500 in-state tuition per semester at participating schools.

Other Items

• Provides a 5% supplement for state retirees over the biennium.
• Appropriates remaining 2020 HAVA funds to enhance technology and improve cybersecurity.
• Revises Emergency Management Act to require a vote of the Council of State to extend a statewide emergency beyond 30 days (effective Jan. 1, 2023).
• Prohibits collusive settlements by the Attorney General.
• Provides $283 million to support deepening and expanding the Wilmington Harbor.