RALEIGH — N.C. Gov. Josh Stein signed the 2026 Appropriations Act on July 7, ending a contentious battle within the state’s General Assembly over the state’s first full state budget in two years.
Included in the budget are earmarked spending initiatives for Hurricane Helene relief monies to Western North Carolina communities and teacher raises.
Along with an across-the-board 3% salary increase for state employees, the spending measure also accelerates personal income tax reductions, with a 2.99% tax rate locked in by 2033.
“North Carolinians expect their elected officials to come together across our differences to deliver for people,” said Stein in a prepared media statement. “This budget delivers the largest starting teacher pay raise in nearly 50 years, and overall teacher pay raise in 15 years, fully funds Medicaid for the year, and provides historic salary increases to public safety officers who sacrifice to keep our communities and prisons safe.”
Other Highlights
Teachers will also see their biggest pay raise since 2006. North Carolina teachers could see an average raise of 8%. Teachers with over 16 years of experience receive a $1,000 bonus, and those with fewer years receive a $500 bonus.
Every local law enforcement officer in the state will also get a $1,750 bonus.
Stein also said the budget reaffirms the state’s commitment to western North Carolina’s full recovery and eliminates tax exemptions for data centers’ electricity use. The budget also makes meaningful investments in community colleges, the DMV, child care, cybersecurity, a new veterans’ home, clean drinking water and summer food programs for kids, according to the governor’s press release.
Regional tourism officials have applauded state lawmakers’ prioritizing local Helene recovery.
“We are excited to see the North Carolina General Assembly has now allocated over $3 billion in Helene relief after successfully passing the FY26-27 budget, and features over $700 million in additional dollars for storm recovery,” said Boone Area Chamber of Commerce President and CEO David Jackson. “Most of these funds will be used to match additional Federal allocations that will aid various essential recovery projects and programs across the region.”
However, the budget doesn’t come without flaws, said the governor.
“The legislature slashed more than 1,000 state government positions, making it harder for us to keep people safe and healthy,” Stein said in the news release. “It also includes a number of unconstitutional and wrong-headed provisions like those shifting power from the executive branch or those that are hostile to local governments, especially Charlotte.”
Still, Stein said that ending the legislative standoff emphasizes bipartisanship.
“Going forward, there is more work to do. We must continue to invest even more in public safety, public education, and other public services to be competitive with other states and to serve our people well,” said the governor. “But as today’s budget proves, we can work together to get things done. I am eager to keep at it with the General Assembly to keep building on our momentum to create a North Carolina that’s safer, stronger, and more prosperous with opportunity for every person.”
Beyond tourism and Helene
High Country municipalities and county governments have discussed this year’s state budget and HR 1 federal legislation, or the “One Big Beautiful Bill Act,” during public conversations leading up to the passing of the local fiscal year budgets for 2026-27 and the state budget.
In Ashe County, commissioners listened to local grievances regarding accountability and transparency, and about how potential state and federal funding shortfalls could impact county governments.
HR 1 has reduced reimbursement for food and nutrition services in North Carolina due to a statewide error rate. The total projected cost for Ashe County is $410,581, according to Tracie McMillan, executive director of the Ashe County Department of Social Services.
While the N.C. Department of Health and Human Services oversees SNAP benefits, county governments administer them locally.
The N.C. Tax and Budget Center said that the budget approved by state lawmakers fails to fund new SNAP costs while continuing tax cuts that primarily benefit wealthy households and profitable corporations.
“Beginning Oct. 1, the federal government will reduce its share of SNAP administrative costs from 50% to 25%, leaving North Carolina and its counties responsible for the remaining 75%,” according to ncbudget.org. “Yet the state budget does not provide funding to help counties cover their increased costs.”
NCTBC also said legislative leaders have ultimately left it to counties to absorb the additional costs.
“Families across North Carolina are being asked to pay the price for tax cuts that overwhelmingly benefit the wealthiest among us,” said Mikayla Massey, NC Black Alliance, in a prepared statement. “HR 1 slashed essential services to finance those breaks, and instead of preparing North Carolina for the harmful federal cuts, legislative leaders compound that harm in this state budget by continuing tax cuts and making it harder for counties to cover rising costs. Together, these choices leave our communities with fewer resources to meet growing needs and invest in the well-being of everyone.”
Anti-poverty organizations have also described the downstream effects of national funding cuts compounding state budgetary limitations.
“Families of all ages are struggling to afford the basics and to keep up with the rising cost of food, gas, and rent,” said Kate Hanson, Meals4Families, in a prepared statement. “At the same time, millions of people across the US have lost SNAP nutrition benefits. Hunger hasn’t changed, but changes at the federal and state level are making it harder to end hunger in North Carolina.”
Budgetary constraints and long-term fallout preceded debates about the state’s possibly changing tax structure.
North Carolina voters will decide on a proposed state constitutional amendment regarding property tax caps during the Nov. 3 general election.
While proponents argue the measure could help prevent residents from being priced out of their communities, critics say it could reduce funding for local governments and public services amid projected state and federal budget shortfalls.
That amendment could also make it even more difficult for counties to fund food assistance administration, public K-12 education, emergency response, and other essential services, said the NCTBC.
Ashe County Commissioners voted last month to leave the county’s tax rate unchanged for 2026-27.