The North Carolina Republican-led Senate unveiled its 2025-27 budget proposal on Monday night, calling for pay raises for teachers and most state employees and additional funds for Hurricane Helene recovery, among other things.
Most state employees would receive an across-the-board raise of 1.25% in FY 2025-26, along with a $3,000 raise over the biennium. Teachers would receive an average 2.3% pay increase in Fiscal Year (FY) 2025-26 and an average increase of 3.3% over the biennium, Senate leaders said, plus the same $3,000 bonus.
“Under this proposal, it”s estimated that average teacher pay will be at $62,407,” Senate President Pro Tempore Phil Berger, R-Rockingham, said at a Monday press conference. “On average, teachers will receive an additional compensation, with the step increases and the pay raise and the bonus, of 8.9% over the biennium.”
The Senate budget appropriates $32.6 billion in 2025-26 and $33.3 billion in 2026-27, with $18.6 billion and $18.9 billion going toward education each year — making up about 57% of each spending plan.
The budget’s net appropriation for K-12 education items is $12.1 billion the first year of the biennium and $12.4 billion in the second. For context, the budgeted net appropriation for K-12 education in 2015 was $8.5 billion. The Senate’s budget also includes approximately $4.8 billion to the UNC System and $1.8 billion to the N.C. Community College System (NCCCS) for both years of the biennium.
“Our K-12 public schools, UNC System campuses, and community colleges are incredible assets to our state, and our budget recognizes that by increasing pay, supporting student outcomes, and improving workforce development offerings,” Sen. Michael Lee, R-New Hanover, said in a Senate press release.
On Monday, Berger said this year’s proposal eliminates “obsolete programs” and “bloated portions of the bureaucracy” in order to find funds for new allocations. He also said that “this is one of the fastest timelines that we’ve seen for pulling a budget together.” On odd-numbered years, the General Assembly meets for its long session, when it works to pass a new budget for the next two years.
Typically, the governor releases a proposal in March, with the Senate and House alternating between which chamber releases a proposal first in April, and second in May. Then, the chambers must work together to try to pass a budget before the new fiscal year starts on July 1.
“State budgets are multi-billion dollar puzzles that we have to put together carefully,” Berger said. “… This budget spends almost a billion dollars more than the current fiscal year and the next budget, then another almost a billion dollars. So while we’re talking about efficiency and reductions in many respects, the overall spend grows and will continue to grow because we’re a growing state.”
In addition to education items, the Senate budget also includes future personal income tax cuts, replenishment for the Rainy Day Fund, and support to build the state’s first and only freestanding children’s hospital.
You can read the full budget money report and bill text on the General Assembly’s website.
More on educator raises
Under the proposal, teachers would receive an average 2.3% pay increase in Fiscal Year (FY) 2025-26, along with a $1,500 bonus. Here’s a look at the proposed salary schedule:
In comparison to the FY 2024-25 salary schedule approved in 2023, beginning teachers would make about $50 more per month, while teachers with 25 or more years of experience would make $70 more.
The proposal allocates nearly $120 million each year of the biennium to implement the new schedule, along with funds for the $3,000 bonus over two years.
Assistant principals will also receive the bonus and are paid on the same salary schedule as teachers, plus 19%. An assistant principal is placed on the salary step “that reflects the total number of years of experience as a certified employee of the public schools,” the budget says.
Principals and non-certified personnel will also receive the $3,000 bonus over the biennium, along with a 1.25% raise. Here’s a look at the principal salary schedule:
Principals are also eligible for bonuses based on growth. You can read more about those bonuses starting on page 121 of the bill text.
The Senate’s proposal would also increase state funds to the State Health Plan, which provides health care coverage to nearly 750,000 teachers, charter school employees, community college employees, other state employees, retirees, and dependents.
The plan is currently facing a large deficit, leading the State Health Plan’s Board of Trustees to consider raising pricing and changing benefits for plan members.
The budget would allocate $131.3 million over the biennium to the plan for district and Department of Public Instruction (DPI) employees.
“We are grateful to the Senate for their generous investment in the State Health Plan, fully funding the pension plan and helping with critical infrastructure needs of our department,” state Treasurer Brad Briner said in a press release. “This budget provides a historic investment in the State Health Plan which will be vitally important as the Department continues to work to make the plan solvent for our hard-working state employees.”
Finally, the proposal would also increase the state match for the signing bonus program for small and low-wealth counties.
Other investments related to teacher and educator pay include:
- $60 million over the biennium for the Teacher Supplement Assistance Allotment, putting the revised net appropriation at $230 million. The maximum supplement a teacher can receive is $5,000.
- $16.2 million in the first year and $20.1 million in the second year for salary supplements of up to $10,000 for teachers serving in advanced roles in districts participating in the Advanced Teaching Roles Program.
- An increase in grant funding for Advanced Teaching Roles to $6.5 million, “supporting its continued growth and implementation across the state.”
- The budget “reimagines our Teacher Apprenticeship Program by moving it under ApprenticeshipNC at the Community College System,” the Senate release says. The revised program would allow districts participating in the Advanced Teaching Roles to employ apprentices under the supervision of a mentor teacher. You can read more on page 104 of the bill text.
Hurricane Helene aid
The General Assembly has allocated more than $1.4 billion toward Hurricane Helene recovery, the release said. The budget puts another $700 million into the Helene reserve.
“Our state has faced significant challenges over the last year, in part because of the devastating impact of Hurricane Helene; this budget reaffirms our commitment to Western North Carolina and continued economic growth,” Berger said in the release.
The budget bill only allocates $25.5 million of the new Helene recovery funds. However, it shifts $633 million in transportation funds to prioritize the reconstruction of roads and bridges in Western North Carolina. The proposal also directs state agency grant programs, representing about $750 million, to prioritize 16 counties the U.S. Department of Housing and Urban Development identified as the areas most impacted by Helene.
“We remain hopeful that the federal government will provide increased and expedited reimbursements, but we must prepare to fend for ourselves,” Sen. Ralph Hise, R-Alleghany, said.
Hise said the General Assembly will discuss future relief aid after Democratic Gov. Josh Stein makes his recommendation later this spring.
Here’s a look at aid for schools included under the grant programs:
- $39.6 million in capital recovery funds for the repair and renovation of facilities in counties with a federal disaster declaration due to Hurricane Helene for local school administrative units and lab schools. These funds are for unmet needs not covered by insurance or available federal aid.
- $2.5 million to the NCCCS to aid colleges that experienced enrollment losses after Hurricane Helene.
- $8 million to the UNC System to allocate to Appalachian State University, UNC-Asheville, Western Carolina, and the North Carolina Arboretum to improve emergency response capabilities.
Finally, there is funding to replenish the Rainy Day fund to $4.75 billion, putting it back to what it was prior to Hurricane Helene.
School choice and charters
The Senate budget proposal does not allocate any additional funds to the Opportunity Scholarship Grant Program, but it does protect the funding allocated toward private school vouchers in previous sessions.
After the Republican-led General Assembly removed income eligibility requirements for the program in 2023, there were 70,000 new applications for the 2024-25 school year. After 15,805 new students were offered vouchers, nearly 55,000 students remained on the waitlist at the beginning of the school year.
The General Assembly did not pass a 2024 full budget last short session. However, it did pass a “mini budget,” which included, among other things, an additional $463.5 million toward private school vouchers for this fiscal year.
The new money for vouchers — the largest share of the mini budget’s funding — effectively cleared the waitlist for the Opportunity Scholarship Grant Program, retroactive to the beginning of the 2024-25 school year. The bill also included $24.7 million in recurring funds to clear the Education Student Accounts (ESA+) waitlist for students with disabilities.
On Monday, when asked by a reporter if he thought there was enough money in the budget for Helene recovery given the funding for vouchers, Berger replied: “Yes, absolutely.”
While the budget does not include additional funds for Opportunity Scholarships, it does include new provisions like verifying residency requirements and clarifying application dates. You can read more starting on page 147 of the bill text.
Republicans have also recently expanded school choice through charter schools, which are public schools with more flexibility than traditional public schools.
In 2023, the Charter School Review Board (CSRB) was created with the goal of expediting the charter school application process. Under that legislation, the CSRB has sole authority to review, approve, deny, and renew charter applications.
A regulatory bill passed last November removed power from Democratic Superintendent Mo Green to appeal final decisions by the CSRB related to grants, renewals, renovations, or amendments of charters. Now, only applicants or charter schools can appeal a final decision by the CSRB.
The Senate’s proposal would grant additional power to the CSRB, including:
- Requiring CSRB approval of all rules and policies related to charter schools, prior to SBE approval.
- Shifting authority from the state superintendent to the CSRB for establishing standardized procedures around the transfer of local funds from districts to charters.
- Allowing the CSRB to require school improvement plans from low-performing or continually low-performing charter schools, and exempting other charter schools from state requirements regarding school improvement plans.
- Requiring the Office of the Charter School (OCS) director to report to the CSRB rather than the state superintendent.
The budget also allocates $82,100 each year of the biennium to the CSRB for “meeting expenses, non-employee travel and subsistence reimbursement, and legal services.”
Under the budget, parameters for remote charter academies would also shift, with academies enrolling 250 students or more able to receive their own charter on an expedited timeline. Charter schools operating in person and remote academies would receive separate performance grades for each school model.
Finally, the budget would allow charters to “relocate the charter school within a 10-mile radius inside the same local school administrative unit identified in the charter.”
Literacy, learning, and cellphones
The Senate budget includes several provisions that would expand targeted literacy investments past third grade.
It allocates $3.8 million over the biennium to expand the Dynamic Indicators of Basic Literacy Skills (DIBELS) reading diagnostic to fourth and fifth grade.
There is also $1.8 million “for professional development in the science of reading for low-performing schools. All grades 6-8 teachers teaching English Language Arts and exceptional children should receive training. Funds may be used for initial program implementation support and to provide stipends for each teacher who completes the training.”
“This budget builds on the General Assembly’s successful early literacy initiatives by extending key supports to students in grades 4 and 5, mirroring those already in place for K-3 students,” the Senate release says.
The budget would also require school districts to create policies for automatic enrollment in English Language Arts starting in the 2025-26 school year.
In 2018, the General Assembly passed a law directing schools to create a policy for automatic math enrollment, requiring students who score at the highest level on the End-of-Grade math test (grades 3-8) to be automatically placed in an advanced math class the following year.
“No student who qualifies for advanced learning opportunities or advanced courses under this section shall be removed from the advanced learning opportunity or advanced course provided to the student unless a parent or guardian of the student provides written consent for the student to be excluded or removed after being adequately informed that the student’s placement was determined by the student’s achievement on the previous end-of-grade or end-of-course test,” the budget says.
The proposal also establishes the Extended Learning and Integrated Student Supports Grant Program “to fund high-quality, independently validated extended learning and integrated student support service programs for at-risk student that raise standards for student academic outcomes.”
The budget directs DPI to use up to $7 million from the At-Risk Student Services Alternative School Allotment each year to fund the program.
Finally, the budget would require local governing boards to establish a wireless communication policy.
“At a minimum, except as permitted in subsection (c) of this section, the policy shall prohibit students from using, displaying, or having a wireless communication device turned on during instructional time,” the budget says.
Here’s a look at the exceptions allowed:
Under the budget, school districts would be required to “establish the consequences for violations of the wireless communication policy, which may include confiscation of the wireless communication device and disciplinary measures.” Read more starting on page 100 of the bill text.
Already this session, lawmakers in the House and Senate have advanced two versions of a bill that would restrict student use of cellphones in North Carolina public schools. Read more below.
Student health and safety
“School safety remains a priority for the General Assembly,” the Senate press release says.
There is $35 million in both years of the biennium for school safety grants, which can be used for resources for students in crisis, school safety training, safety equipment, and subsidizing the School Resource Officer Grants program.
There is also an additional $13.9 million each year toward the State Health Personnel Allotment, which funds the salaries of positions like school nurses, psychologists, counselors, and social workers. The new funding represents approximately 160 new positions, according to the budget.
The revised net appropriation for the School Health Personnel allotment is $233.5 million in each year of the biennium.
Regarding student nutrition, the budget maintains coverage of copays for reduced-price school meals under the federal National School Lunch and School Breakfast programs.
The budget also prohibits the use of alternate school meals based on student pay status.
“Governing bodies of public school units shall offer the same meal selections to all students regardless of student pay status for the nutrition program,” the budget says. “For purposes of this section, pay status includes students receiving free or reduced-price lunch or students that have unpaid meal debt. This policy does not require a governing body to provide a student any optional meal items that result in additional charges to the student.”
The 2023 budget directed DPI to establish the CEP Meal Program Incentive for FY 2023-25 to expand public school participation in the federal Community Eligibility Provision (CEP) program, meant to increase the number of students with access to healthy and free meals at schools.
The budget clarifies that “in each year where funds are made available for the purpose, the CEP program shall be run subject to the provisions of this section.”
The proposal would also make a pilot grant program for schools to purchase feminine hygiene products permanent “in each year in which funds are made available for the purpose.”
DPI will contract with the Diaper Bank of North Carolina to buy the products, the budget says.
Finally, the budget also includes $6 million to the NC Collaboratory to research PFAS — widely used, long-lasting chemicals, whose exposure may be linked to harmful health effects in humans and animals.
School funding
The budget includes $35.4 million each year of the biennium for Average Daily Membership (ADM) adjustment “for an allotted ADM of 1,526,117 students in FY 2025-26. This revision includes adjustments to multiple position, dollar, and categorical allotments.”
There is also $26.3 million each year for non-ADM adjustments “such as changes in annual leave payout, worker’s compensation, and student transportation.”
Here’s a look at other funding-related provisions:
- $45 million in 2025-26 for school business system modernization to complete Enterprise Resource Planning (ERP) transitions at public school units. Those transitions are meant to provide “integrated payroll and human resources information, an integrated State-level licensure system, and reporting of financial information for increased transparency and analytics.”
- Increases funding for the Uniform Education Reporting System (UERS), “which supports multiple software platforms provided to PSUs, including a student information system. The revised net appropriation for UERS is $11.5 million in FY 2025-26 and $24.2 million in FY 2026-27.”
- $1.1 million in supplemental funds each year to new Cooperative Innovative High Schools (CIHS) schools, including Dare Early College High School, Rockingham County CTE Innovation High School, Hawthorne Academy of Health Sciences, Martin Innovative Early College of Health Sciences, and Moore County Cooperative Innovative High School. The revised net appropriation for this program is $33.6 million in each year of the biennium.
- $20.6 million each year for special population headcount adjustment “for the Exceptional Children (EC) preschool and school-age allotments, as well as the Limited English Proficient (LEP) allotment, to reflect actual student headcount.”
- $12.8 million each year for the Low-Wealth Counties Supplemental Funding allotment “resulting from changes in local factors such as per-capita income and the number of students living in poverty. The allotment formula is unchanged from the prior year. The revised net appropriation for this purpose is $342.3 million in FY 2025-26.”
- $850,000 each year to provide supplemental funding for school districts containing a laboratory school. Per the budget: “These funds are intended to offset costs the district may incur in providing transportation, nutrition, and other services to the laboratory school. DPI shall distribute the funds between the eligible districts on the basis of the allotted ADM of students in laboratory schools within each district.”
The budget also includes capital funds for public schools:
K-12 budget reductions
On Monday, Berger said committee chairs aimed to reduce what he called “obsolete programs” and “bloat” in state agencies.
The budget would eliminate hundreds of vacant positions across government agencies, most of which have been vacant for six months or more, including four vacant education programming positions at DPI.
Here’s a look at some of the notable funds being eliminated from K-12 spending:
- Eliminates funds for DPI’s contract with Learning.com, which provides online digital literacy resources for students and teachers. This results in a $4 million reduction each year.
- Eliminates funding for DPI to contract with the NC Association of School Business Officers “to provide technical assistance to PSUs with regard to maximizing the benefit of their fiscal resources.” This contract costs $2.2 million each year.
- Eliminates funds for Plasma Games, Inc., which amounts to approximately $1.8 million each year. The contract was meant to provide science, technology, engineering, and mathematics (STEM) materials and career and technical education (CTE) classes, but since the General Assembly funded it in 2020, student participation has remained low.
- Repeals TeachNC, an online platform used to recruit teacher candidates and teachers. This would put $980,000 each year back into the general fund.
- Eliminates funding for the Coding and Mobile Application grant program, or $800,000 per year.
- Eliminates funds for the Advanced Placement Partnership, $1.5 million per year, which is a partnership between DPI and the College Board.
There are also several reductions in spending.
First, the budget reduces the amount allocated to offset the copays for students eligible for reduced-price school meals by $6 million over the biennium, putting the revised net appropriation for this purpose at $2 million each year of the biennium.
“Copays for students eligible for reduced-price meals will still have their copays covered by State funds,” the budget says.
The budget would also reduce state funding for Advanced Placement (AP) tests fees by $14 million each year of the biennium, putting the net appropriation at $4.7 million each year.
There are similar reductions for International Baccalaureate (IB) test fees, bringing the net appropriation to $500,000 each year.
“The remaining funds will be used to cover test fees for economically disadvantaged students,” the budget says.
The proposal would also reduce funds for the Central Office allotment by 5%, or $5.5 million per year. The revised net appropriation for the Central Office allotment is $105 million in each year of the biennium.
Finally, the proposal also reduces superintendent’s purchased services by $4 million over the biennium. These funds “support DPI’s executive and administrative functions,” the budget says. The revised net appropriation is $2.8 million in each year of the biennium.
You can look at all the reductions in and eliminations of funding starting on page 50 of the money report.
AI, book challenges, and more
The budget establishes an Artificial Intelligence (AI) Academic Support grant program, allocating $15 million over the biennium for public school units to contract with Khan Academy, Inc. for their Khanmigo platform in grades six through 12.
“Khanmigo is an AI-powered tutoring application that supports students and provides tools for teachers,” the budget says. “This item also provides funds for Khanmigo in schools operated by the Division of Juvenile Justice.”
The budget also includes $500,000 for Wake County Public School System to use at East Wake High School and Knightdale High School “to work with Khan Academy, Inc. to create a gateway college math course to be offered at the high-school level using the AI student tutoring program Khanmigo.”
The budget also lays out a process for local challenges to supplementary and instructional materials, starting on page 73 of the bill text:
There is $6.45 million to expand the SparkNC Program, which “is a partnership between SparkNC and PSUs that offers CTE-related school-based labs and infrastructure, resulting in microcredentials that are aligned with high-tech career pathways.”
$500,000 of the allocated funds in FY 2026-27 should go toward implementing a middle-school program, the budget says.
The budget also lays out requirements regarding technology purchasing decisions by local school districts.
Under the budget, the State Board of Education would be required to adopt rules for all public school units to evaluate the following when acquiring technology, hardware, and software:
- The long-term cost of ownership, including costs of repairing the technology, computer hardware, or software.
- Any flexibility for innovation during the life of the technology, computer hardware, or software.
- Any anticipated resale or salvage value at the end of the target life cycle for the technology, computer hardware, or software based on the average resale or salvage value of similar technology, computer hardware, or software as a percentage of the initial cost of purchase.
In addition, each school district would be required to submit information regarding their “break/fix” rate.
Break/fix rate: The percentage obtained by dividing the number of school technology devices reported as malfunctioning or needing repair due to physical damage, hardware failure, or other breakage incidents prior to the stated life cycle period, not covered by insurance or a policy plan period, by the total number of school technology devices in operation during that period.
Excerpt from Senate budget proposal
School districts would have to report on the following information to the State Board of Education by Aug. 15 annually:
- The break/fix rate of the school technology devices in the public school unit for the previous school year.
- The total number of school technology devices currently in operation in the public school unit.
- The total number of school technology devices in the public school unit requiring repair that (i) underwent repair or (ii) were no longer in service during the previous school year.
- The total amount of funds spent to repair or replace school technology devices during the previous school year.
That report would be due to the General Assembly by November 15 each year.
“This report shall include a summary of the data reported by each governing body and recommendations to reduce break/fix rates in the future,” the budget says.
Competency-based education
The budget also includes multiple provisions regarding “competency-based education.”
First, there is $5.3 million for DPI to create a grant program “for competency-based education models that focus on mastery of learning.” Under that grant, each participating school will receive a grant of $330,000, with $95,000 to go toward training on the implementation of competency-based education in the school each school year.
There is also $4 million over biennium to Mooresville Graded School District to “establish the Competency-Based High School/Healthcare and High-Tech Pathways program.”
“Funds will be used to contract with a third-party expert in competency-based education to design stackable credentials, hire a staff member to oversee the program, and partner with a third party to develop standards-aligned proficiency scales for content areas in grades 9 through 12,” the budget says.
The Senate proposal would also establish a Competency-Based Education and High School Redesign Strategic Network, to include the Mooresville Graded School District, Wake County Public Schools, SparkNC, and Mitchell, Wake Tech, Fayetteville Tech, and Wilkes community colleges.
“The Network shall provide a means for each entity to share what it has learned and developed regarding CBE and high school redesign,” the budget says. “The goals of the Network shall be to advance the goals of developing a CBE approach to education across the State.”
Finally, the budget would also create the Community College Seamless Skills Initiative, to “create a competency-based education (CBE) model that seamlessly connects high school and community college.”
According to the budget, this alignment would allow high schoolers to “explore career pathways, earn dual credit, and fulfill computer science requirements while gaining credentials of value in high-demand technology employment sectors through college credit.”
Fayetteville Technical and Wilkes community colleges would partner to implement the initiative, the budget says.
EdNC will publish a budget analysis for community colleges and early care and learning soon. Stay tuned.
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