House unveils new NC budget. Here’s what’s inside:

The following is a summary of an article provided by Carolina Journal.

The North Carolina House unveiled a $66 billion budget proposal for the next two fiscal years, focusing on significant salary increases for teachers and state employees, funded partly by reallocating savings from government efficiency measures like defunding DEI programs and cutting vacant positions. Key points include:

• Pay Raises: State employees, community college staff, and UNC System personnel get a 2.5% raise, with retirees receiving a 1-2% cost-of-living bonus. Teachers see an 8.7% salary increase over two years, raising starting pay to $56,593, making North Carolina the top state in the Southeast for entry-level teacher pay. The plan restores master’s pay for teachers.

• Taxes: The House slows planned income tax cuts, raising revenue triggers (e.g., from $33 billion to $36.3 billion for FY 2026) compared to the Senate’s push for deeper cuts to 1.99%. It also exempts $5,000 in tipped wages from taxes and reinstates a back-to-school sales-tax holiday.

• NC Innovation Clawback: The House redirects $500 million from NC Innovation to the Hurricane Helene Disaster Recovery Fund, taking a stronger stance than the Senate’s partial reclamation.

• Savings Reserve: Allocates over $1.1 billion to restore the state’s savings reserve to $4.75 billion after Hurricane Helene aid.

• Other Provisions: Includes DMV privatization pilot, $50 million for school safety, and disaster recovery funding. Unlike the Senate, it omits funding for a new children’s hospital.

The House budget contrasts with the Senate’s $66 billion plan, particularly on teacher pay, tax cuts, and NC Innovation. Both chambers will negotiate to finalize a budget for Governor Josh Stein. Committees will review the House proposal Tuesday, with a floor vote expected by week’s end.