Governor’s Budget Recommendations
Gov. Josh Stein this week unveiled his state budget recommendations for the next two fiscal years. Entitled “North Carolina Strong,” it details a number of themes: improving public education, putting money in working families’ pockets, maintaining the state’s fiscal soundness, building a strong workforce, keeping North Carolinians safe, increasing access to health care, and promoting operation excellence.
Highlights of Stein’s recommendations include:
- Appropriating $33.6 billion to the General Fund for FY 2026 and $34.3 billion for FY 2027
- Increasing education spending including funding enrollment growth at K-12 schools, community colleges, and UNC campuses
- Raising starting salaries for K-12 teachers to the highest in the Southeast and providing a 10.6% average increase to existing teachers over the biennium
- Recommending a $4 billion bond to address school capital and construction needs
- Maintaining the current state income tax rate of 4.25% for individuals and 2.25% for corporations instead of implementing scheduled reductions in both taxes
- Establishing a working families tax credit, providing a refundable child and dependent care credit, and converting the existing child tax deduction to a refundable child tax credit
- Providing $40.3 million each year to the community colleges for the Propel NC effort, which focuses on workforce development for in-demand, high-wage jobs
- Funding additional school resource officers in elementary and middle schools and raising pay for correctional officers and youth counselors
- Establishing the IMPACT Center (innovation and modernization for performance, accountability, and cost-effective transformation) with $20 million to support efficiency in state government
Click here for the State Budget Officer’s presentation on March 20 to the General Assembly.
Click here for details about the Governor’s budget recommendations.
The Senate will produce the first version of the budget bill, which could be considered in late April or early May. Legislators will seek to adopt a budget and present it to the Governor by June 30, the end of the current fiscal year.
Helene Recovery Bill
Gov. Stein this week signed into law H 47, the Disaster Recovery Act of 2025—Part I—after legislators agreed on a consensus bill. The Governor previously recommended a Helene package totaling about $1 billion. A number of his recommendations are included in H 47.
The bill allocates $524 million for Hurricane Helene relief efforts in Western North Carolina, bringing total relief funding from the General Assembly across all four legislative relief packages to more than $1.4 billion. It also includes $217 million to complete rebuilding homes in Eastern North Carolina from past storms and $100 million in statewide relief for farmers in addition to Helene-specific agriculture funding. Both the Governor and legislative leaders indicated that additional Helene funding bills will be considered later in this legislative session.
Key funding provisions in the bill include:
- $200 million for Helene-specific crop-loss and farm restoration
- $120 million for rebuilding and repairing homes
- $100 million for repairing private roads and bridges
- $55 million for small business infrastructure grants
- $20 million for debris removal
- $10 million to support volunteer organizations
- $10 million for volunteer fire departments
- $9 million for learning recovery for students in Helene-affected counties
- $4 million for travel and tourism marketing
- $217 million to close out home rebuilding operations in Eastern NC
- $100 million to assist farmers with non-Helene-related crop loss
The bill also includes regulatory relief to assist with Western North Carolina rebuilding and oversight and accountability provisions for storm recovery in both Western and Eastern parts of the state.
Information about bills and work of the General Assembly can be found at its website: www.ncleg.gov.
