NC Senate releases its Budget

The North Carolina Senate released their budget on Monday, April 14, and there are significant contrasts between their budget and Governor Stein’s budget recommendations. The plans differ in their funding priorities, inclusion of substantive policy changes, and in their tax plans.

The Senate budget does NOT include restoring Master’s level pay for school social workers. NASW-NC will continue to advocate for Master’s level pay for school social workers in the House and final 2025-2027 North Carolina Budget. This includes advocating for passage of HB 523 - School Social Workers/Master’s Pay.

Below are a few items of interest out of the (458) page bill:

NCDHHS Cuts Include (but are not limited to):

• Including Medicaid Work requirements
• No DPS wage increases
• No waiver slots
• No opioid abatement dollars
• No EIPD
• Terminate unused positions - 290 were terminated from MHDDSUS
• $30 million dollars in Single stream dollars were cut (This was surprising to Division and will directly impact people receiving IDD & MH services)
• 3-way dollars, DHHS, MCOS, Hospitals - 40% to BHUCs and respites, just enough to pay for beds and not BUHUCs and peer respites, justice - $45million in cuts

Tax Cuts:

• The Senate budget cuts personal income taxes from 3.99% to 3.49% in 2027 and 3.49% to 2.99% in 2028. If certain revenue targets are hit, the income tax could drop as low as 1.99%.

  • While these taxes are going down, the budget calls to increase taxes for sports betting operators.

• Nonpartisan budget analysts have found that these proposed tax cuts could lead the state to a budget deficit as soon as 2026.

Pay Raises Across the State:

• The Senate budget does NOT include restoring Master’s level pay for school social workers.

• Teachers will receive an average raise of 2.3% in the first year of the biennium, and 3.3% across both years.

  • The average teacher pay, with supplements, will be $62,407.

• Nearly all state employees will get a raise of 1.25% and a $3,000 bonus over the next two years.

  • Corrections officers, Wildlife officers, and Natural and Cultural Resources officers will receive a 6.5% increase.

• UNC System employees will receive a 1.25% raise in pay.

• The Governor and Council of State will receive a 1.25% pay increase.

Spending Cuts:

• The budget will eliminate 800 vacant positions across the state government.

  • There are 14,000 vacant positions across the state government.

• A $5 million cut from the Department of Public Safety. 

• A $4 million cut from Public Defense Services.

• $1.5 million cut from UNC-Chapel Hill.

• $50 million from the state community college system.

• The budget also orders the UNC System to find $33 million in cuts across the campuses.

General Expenditures:

• The Senate budget seeks to store $1.1 billion in the state’s “rainy day fund.”

• The budget allocates $700 million to be spent on Hurricane Helene relief efforts.

• $638 million toward the creation of a new children’s hospital led by Duke and UNC.

• Millions appropriated for teacher sign-on bonuses, teacher mentors, and a program to boost reading scores. 

Democratic leader Senator Sydney Batch said that the Senate budget “fails to fund public safety, offers pathetic pay raises for public servants, and hoards billions of dollars while families struggle.”

While the Senate budget traverses through its approval process, we are still awaiting the House budget. When both of these are presented, the Senate and House will begin their negotiation process to put forth a finalized budget. Once this process occurs, the Governor will decide to veto or sign the budget, and he may have more leverage in negotiations given that the Republican supermajority in the House has been broken.

You can follow NCGA 2025-2027 Budget updates by signing up for our Advocacy Update here.  

You can read the NC Senate's Budget Proposal SB 257: 2025 Appropriations Act here.