Governor Stein Announces Budget to Keep North Carolina Strong

Today Governor Josh Stein announced his recommended budget for Fiscal Year 2026-2027 to keep North Carolina strong. The Governor's budget raises starting teacher pay to the highest in the Southeast and provides meaningful tax relief to working families while ensuring North Carolina can continue to invest in critical needs, including public safety, public education, child care, workforce development, and health care. This budget complements the Governor's targeted budgets to address critical needs and support ongoing Hurricane Helene recovery efforts, addressing immediate challenges while planning for long-term success.

"North Carolina's people are our greatest asset, and when they succeed, we succeed," said Governor Josh Stein. "We must make fiscally responsible decisions now to keep our schools strong, our communities safe, and our economy working for every person. This budget is a balanced, forward-looking plan to secure our future, lower costs, and ensure that every North Carolinian has a shot at real prosperity."

Improving Public Education, Early Education, and Child Care

A strong economy starts with strong public schools. But North Carolina lags behind in teacher pay and education investment, and too many families lack access to affordable child care and early education. North Carolina ranks second-to-last in the nation in per-pupil investment and ranks lower than all of its neighboring states on starting teacher pay. Governor Stein's budget invests nearly $2.3 billion to support educators, improve student outcomes, and expand child care access.

"If we're going to continue to build our economic success, there's one area where we cannot afford to fall behind: our public schools," said Governor Josh Stein. "Our children are our future, and investing in them and the educators that help them learn will pay off for generations to come."

The budget raises starting teacher salaries to the highest in the Southeast, significantly raises pay for all teachers, restores master's pay for veteran teachers, and improves student outcomes through the Science of Reading and Advanced Teaching Roles programs. It prioritizes student well-being through offering school breakfast at no cost, making much-needed building repairs, better supporting students with special needs, and increasing the numbers of school health personnel like counselors, psychologists, social workers, and nurses.

The Governor's budget expands access to affordable child care by increasing child care subsidy rates, establishing a statewide subsidy reimbursement rate floor, and investing in NC Pre-K. These investments would help stabilize child care programs, pay early educators competitive wages, and keep tuition affordable for families.

Putting Money in Families' Pockets

Too many families are struggling with rising costs. Governor Stein's budget provides nearly $380 million in targeted, meaningful tax relief while maintaining the resources needed to fund essential services.

"Between investing in North Carolina or giving money to corporate shareholders, I choose North Carolina's kids, families, and future every time," said Governor Stein. "These investments and tax cuts are what it looks like to be truly pro-family."

Governor Stein's budget supports working families through targeted tax cuts that allow North Carolinians to keep more of what they earn and better afford monthly expenses, including child care costs, and the budget increases personal income tax deductions. The budget protects the state's fiscal stability by preserving current individual and corporate income tax rates, keeping North Carolina's tax burden among the lowest in the country.

Keeping North Carolinians Safe and Healthy

Governor Stein believes everyone deserves to feel safe in their community and have access to quality health care. Staffing shortages, rising behavioral health needs, and public safety challenges have increasingly kept North Carolinians from this reality. Governor Stein's budget includes more than $970 million in targeted investments to support law enforcement, address root causes of crime, and keep people healthy. The budget also fully funds the Medicaid rebase.

"Everyone deserves to live in safety, to go about their daily lives without fear," said Governor Stein. "We must support law enforcement to enforce the law and make investments that can prevent crimes from occurring in the first place. And we must fully fund Medicaid so that millions of North Carolinians can stay healthy."

To keep North Carolinians safe, Governor Stein's budget provides all law enforcement, correctional officers, nurses, and health technicians with a 5% pay raise - on top of the 10% raise recommended in the Critical Needs Budget - and awards bonuses to Basic Law Enforcement Training (BLET) graduates and out-of-state transfers. To meet the growing behavioral health needs of children and adults in our state, his budget invests in the behavioral health workforce and increases the numbers of psychologists and social workers in schools. The budget addresses the intersection of behavioral health and public safety by expanding new co-responder teams to pair clinicians and law enforcement during responses to behavioral health crises, providing funds to open two additional units at state psychiatric hospitals, establishing a juvenile justice residential crisis unit, and supporting the physical and behavioral health needs of people reentering communities following incarceration.

To keep North Carolinians healthy, the budget fully funds Medicaid, protecting the program which provides lifesaving health care coverage for more than 3 million North Carolinians, in addition to investing in clean water and wastewater systems. To connect people to treatment and hold drug traffickers accountable, the budget proposes expanding the use of medication to treat opioid use disorder in correctional institutions and creating a Fentanyl Control Unit to stop the flow of narcotics in North Carolina. To keep students safe and healthy, this budget would increase school security and fund nutrition programs, including offering school breakfast at no cost, unlocking federal SUN Bucks summer nutrition benefits, and supporting counties as they respond to new SNAP requirements brought on by HR 1.

Building a Strong Economy and Workforce

Since taking office, Governor Stein has announced more than 40,000 new, good-paying jobs and more than $27 billion in capital investment across the state. In the face of a rapidly growing and ever-changing economy, the Governor is focused on investing in North Carolinians to ensure they have the skills to succeed. That's why his budget would invest more than $448 million to expand opportunities and critical supports like child care for students, jobseekers, and employers alike.

"Economic development is a team sport, and Team North Carolina is the best in the business," said Governor Stein. "We've got to not only grow the economy but also make sure that it works for more people. Expanding pathways to good jobs will connect people with the knowledge and skills they need to succeed in an ever-changing economy. We want more opportunity for more people."

To expand access to valued credentials and pathways to good jobs, the Governor's budget invests in Propel NC and supports free community college tuition for students pursuing non-degree, short-term workforce credentials in high-demand fields. To expand work-based learning, the Governor's budget funds youth apprenticeship programs through NC Career Launch, supports apprenticeships in state government through the Office of State Human Resources, and provides work-based learning grants to small businesses through the Department of Commerce. Recognizing critical needs in our health care workforce, the budget supports the NC Area Health Education Center to create new training sites, as well as the NC Independent Colleges and Universities to educate more health care professionals. To support jobseekers, Governor Stein's budget expands the scale and duration of unemployment benefits. To strengthen opportunity in rural North Carolina, the Governor's budget promotes North Carolina's agricultural products and invests in rural infrastructure projects to strengthen regional economic capacity.

Modernizing Government Service

To meet the needs of a growing state, government must work more efficiently and effectively. This budget invests nearly $338 million in service delivery, technology, and the state workforce to ensure residents can rely on their government to work for them.

"With goals this important - building an economy that works for everyone, strengthening our public schools and workforce, supporting families, and keeping people safe and healthy - we cannot afford to waste a penny," said Governor Stein. "We need people to be able to feel how their government is working for them and maximize the value of every taxpayer dollar."

Budget investments include expanding Division of Motor Vehicles services and hours, upgrading digital services and cybersecurity, creating a Transition Services Division within the Department of Military and Veterans Affairs to help assist servicemembers transitioning to veteran status, and giving state employees a real pay raise to help recruit and retain the best.

Click here to read Governor Stein's recommended budget.

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