NC Governor Proposes Budget with Teacher Raises, Medicaid Expansion
Governor Josh Stein proposes record teacher raises and state employee bonuses as North Carolina lawmakers tackle budget crisis from 2025.
RALEIGH, NORTH CAROLINA — Governor Josh Stein unveiled his recommended budget for the 2026-2027 fiscal year on Tuesday, proposing significant pay increases for teachers and state employees as lawmakers return to address the state’s budget impasse from 2025.
North Carolina remains the only state that failed to pass a comprehensive budget last year, forcing legislators back to Raleigh for the 2026 session to resolve the funding crisis.
Major Teacher Pay Increases Proposed
Under Stein’s plan, North Carolina teachers would receive the highest starting salaries in the Southeast through an ambitious education funding package. The governor is requesting an 11% average raise for all educators, restoration of additional pay for teachers with master’s degrees, and elimination of the 10-year salary plateau that currently caps teacher advancement.
“If we’re going to continue to build on our long term economic success, we must start by investing in our public schools,” Stein said during a Tuesday morning press conference. “Our children are our future. Investing in them must be our greatest priority.”
The education package also includes pay increases for school-based administrators and a $1,000 bonus for teachers and local education employees. Those making less than $75,000 annually would receive an additional $500 bonus under the proposal.
State Employee and Retiree Benefits
Stein’s budget extends beyond education to address broader state workforce needs. He is requesting a 5% pay increase for all state employees, split as 2.5% increases for fiscal years 2025-26 and 2026-27.
State employees would also receive a $1,000 bonus, with an additional $500 for those earning less than $75,000. The proposal includes a 2.5% supplement for state retirees each year.
Political Challenges Ahead
Despite North Carolina’s strong performance in business development, economic growth, and job creation, Stein emphasized the state faces significant challenges. “We’re experiencing this success because of our people and because as a state, we have invested in them over decades, but we’re putting that winning formula at risk,” he told reporters.
The governor noted that North Carolina “has fallen behind in key metrics for public education, public safety and healthcare,” making his proposed investments essential for maintaining the state’s competitive position.
State lawmakers historically resist following gubernatorial budget recommendations, particularly when legislative leaders and the governor represent different political parties. However, governors can sometimes negotiate key priorities during final budget discussions.
The legislature must now work through Stein’s proposals while crafting their own budget priorities to end the funding stalemate that has persisted since 2025.
