After a year of waiting, on June 30th, the final day of the fiscal year, lawmakers had just one day to read and respond to a budget drafted by legislative leadership behind closed doors.
In two days, July 2nd, legislative leaders pushed the bill through both the House and Senate and sent it to Governor Stein who has 10 days to sign, veto, or let the bill become law without his signature.
The 600+ page Senate Bill 257- 2026 Appropriations Act contains plenty of policy items as well as budget items that we’ll be sharing more about in upcoming weeks. Here are some highlights:
Teachers receive an average of 8% pay increase, but the increases fall primarily at the early years of the pay scale. Beginning teachers get a 17% bump and veteran teachers receive approximately 5%.
State salaries for beginning teachers increase from $41,000/year to $48,000/year for 2026-27, bringing North Carolina in line with surrounding states and just $500/year below South Carolina’s 2025-26 starting salary. The pay raises are not retroactive to make up for last year’s salary freeze.
School principals and non-certified staff will also receive a 3% raise, and assistant principals, who are paid based on the teacher salary schedule, will receive an average 6.3% salary increase
All other school employees will receive an average 3% raise. Noncertified and central office staff will also earn a one-time bonus. Those earning less than $65,000 will receive $1,750, while staff earning more than $65,000 will receive $1,000. It is important to note that bonuses are taxed at a higher rate (~30%) than salaries.
Retirees (teachers and state employees) will also receive a one-time bonus of 2.5%, which falls far short of recent cost increases.
The budget allocates $30 million more in salary supplements to pay teachers for Advanced Teaching Roles and to add more schools to the program.
Scheduled income tax cuts remain in place, which drops our current 3.99% to 3.49% in 2027. Earlier in June, lawmakers added a proposed constitutional amendment that will prevent future lawmakers from raising individual income tax cuts above 3.5%.
The 2023 Appropriations Act required the state to calculate how much public schools lost in funding from students moving from public school to private school through the Opportunity Scholarship voucher program and to reinvest the lost dollars in public schools. Earlier this year, DPI reported that the state owed public schools slightly more than $35 million for the past two years.
The 2026 Appropriations Act allocates the $35 million to three areas: one-time bonuses of $1,750 for school nutrition and custodial staff, middle school literacy professional development, and the purchase of a K-8 math curriculum which the NC Collaboratory will have to adapt to make it align with the NC Standard Course of Study.
In the past two years, private schools have received more than $617 million in voucher funding from the state. Approximately 90% ($555 million) paid the tuition for students who had never attended public school.
POLICY PROVISIONS INCLUDED IN THE BUDGET: Many of these provisions were from bills that did not advance in the session. This practice allows leadership to bypass the traditional approval process and institute policies that were not resolved by both the House and Senate. For example, this budget changes public record laws and repeals healthcare certificate-of-needs rules and more, all advanced through the budget process.
Public schools will be required to allow students to miss class for religious instruction. Currently, the law allows students two excused absences per year for religious observances. The religious instruction must take place off school property and must not exceed more than four hours per week.
The NC Dept. of Public Instruction is to develop a model AI policy that all local schools districts, charter schools, and laboratory schools must adopt. Educators will be required to complete AI training by June 30, 2028.
Public schools will be required to serve the same meal to all students regardless of whether they have unpaid meal debt. Currently, some districts serve an alternative meal to students who have meal debt. Although this provision will be good for student health, it does not come with funding, so it will further strain district budgets. Note that charter schools and private schools are not required to provide school lunches.
The budget also makes it easier for teachers in other states to get a teaching license in NC and expands elementary K-6 licenses to grades 7 and 8.
Students who score at the highest level on end-of-grade reading tests will be automatically enrolled in the most advanced ELA class available at the next grade level (unless a parent intervenes). This policy is already in place for math courses.
A chronic absenteeism pilot program will be led by NC DPI to test attendance intervention systems in several school districts.
A new statewide process for challenging instructional materials, which includes library book challenges, must be filed by local parents, guardians, teachers, or residents within the school’s attendance zone. This provision explicitly eliminates the ability for national advocacy groups to challenge materials and requires that the new required “Community Media Advisory Committee” have 9 educators and 3 parents. More details on the committee and process found here and here.
Suicide and Crisis Lifeline and the Statewide Peer Warmline funds are increased to support prominently displaying both the 988 and NC Peer Warmline phone numbers (855-733-7762) across all levels of education, including public schools, charter schools, community colleges, and universities.