UPDATE: The North Carolina House passed the state budget proposal, HB 263, on Thursday June 20, by a vote of 69-35.

The first budget draft of the short session was released on Monday night with a primary focus on funding education and state agency salaries. 

Budget negotiations between the House and Senate have failed to make progress in recent weeks, prompting the House to release its own initial draft.

Highlights of the short session budget adjustments include:

  • Starting teacher salary raised to $44,000
  • Restoration of master’s pay for teachers
  • 2% additional COLA bonus for State retirees
  • Additional 9% raise for correctional officers
  • Full funding for Opportunity Scholarships
  • Childcare funding handout: $135 million for childcare stabilization grants


Opportunity scholarships are fully funded in the budget adjustment. Funding previously covered tiers one and a portion of tiers two, three, and four. The adjustment would allot $480 million to fully fund the rest of tier two in addition to Education Savings Accounts. 

“The House budget fully funds Opportunity Scholarships for the thousands of North Carolina families who have applied to the scholarship program,” said Speaker Tim Moore, R-Cleveland. “Parents must be empowered to make the best education choices for their families regardless of income status, but school choice is not a zero-sum game. Therefore, the House budget also raises starting teacher pay to $44,000 and restores masters pay for teachers, ensuring every public school classroom has a qualified teacher who is compensated like the professional that he or she is.”

Starting teacher salaries would jump to $44,000, up from $39,000. The 2023 budget was expected to boost starting salaries to $41,000 this year, indicating a significant jump than previously scheduled. While the largest increase is among first-year teachers, every teacher will receive a minimum 1% bump every step along the schedule. The adjustment would cost the state about $103 million to execute. 

Approximately $180 million would be used to renovate Poe Hall at NC State. The building was closed last November after PCBs were found in the 1971 structure. The appropriations would go toward gutting the building. 

Roughly $8 million would fund a master’s pay program, which would boost pay for teachers with master’s degrees in their field of teaching. The House has attempted to add this provision in the past, but the Senate has not approved of it. 


Under the proposal, all state agency employees would see pay increases. State agency employee salaries would increase by an additional 1% from fiscal year 2023 to 2024, jumping from 3% initially planned to 4%. 

State employees certified in the Department of Adult Corrections (DAC) would see the largest pay raise with the budget adjustment amid staffing shortages. These include Correctional Officers, Probation and Parole Officers, and DPS Juvenile Justice positions, all of which were initially scheduled to receive a 4% raise. However, under the proposed 9% addition, their pay would rise by about 12% from fiscal year 2023 to 2024.


Federal childcare stabilization grants from COVID expire at the end of June, prompting calls for the state to pick up the tab as fears grow. The budget includes a stopgap that funds $135 million for childcare stabilization grants. 


Randolph County, home of Toyota’s manufacturing facilities, would receive $150 million from the Economic Development Reserve. The funds would go straight into the transportation budget to fund roads around Randolph County.

An additional $350 million, to come from the Medicaid Contingency Reserve, is proposed to fund the Medicaid shortfall. 

“At a time of economic uncertainty, this House budget restrains spending growth while also dealing with the most pressing needs of our state,” said North Carolina House Budget Chair Rep. Dean Arp, R-Union. “We utilized just two reserves—the Economic Development Reserve to fulfill our commitments to bring Toyota’s manufacturing jobs to this state, and the Medicaid Stabilization Reserve, which will address an unexpected one-time increase in Medicaid costs. The savings reserve is untouched and remains at record highs.”

The budget pulls from the $1.4 billion surplus and two reserve accounts. The House budget leaves close to $100 million in excess funds, which could be used in negotiations with the Senate. If the Senate chooses to negotiate, the budget proposal will likely undergo several rounds of changes, but Senate leadership remains skeptical of overspending. 

Senate Leader Phil Berger, R-Rockingham, told the Carolina Journal that the House is not only overspending, but also using funds from reserve accounts to fund non-essential projects, which he opposed.