NC lawmakers nearing deal on state-employee raises, clearing key budget hurdle, sources tell WRAL

North Carolina lawmakers are nearing a deal on raises for state employees — an accord that could move legislative leaders closer to finalizing a comprehensive state budget after a yearlong standoff, people familiar with the matter tell WRAL News.

Lawmakers are generally in agreement on the size of pay increases for most state employees, with bigger raises and bonuses being negotiated for teachers and law enforcement officers, the people told WRAL. They spoke on the condition of anonymity because they weren’t authorized to publicly discuss the negotiations. 

Early last week, leaders of the House and Senate were in agreement on raises of about 3% for most state employees and about 8% average increases for teachers, plus possible bonuses for teachers and other state employees based on experience, WRAL has learned. The chambers were also said to be in agreement on other funding levels for certain retirement and healthcare benefits. 

Negotiations are ongoing, the people told WRAL, and nothing has been finalized. Multiple people cautioned that the details could change as talks continue and they warned that the deal on salaries could still fall apart entirely. But they were encouraged by the direction of the negotiations.

State employee raises and tax rates have been a major sticking point in negotiations over a broader spending plan. An agreement on raises is seen as a major hurdle cleared on the way to a full budget. 

In budget proposals passed last year, GOP leaders in the chambers agreed broadly that they wanted to cut taxes and give state workers raises. Each chamber also proposed eliminating vacant state jobs, raising public university tuition and cutting tens of millions of dollars from public universities to help fund their other priorities. But in those proposals, leaders disagreed over the level of all of those items, and more.

North Carolina is the only state in the country without a new budget. An agreement on salaries would be the latest indicator that the frozen negotiations are thawing.

The leaders of the two chambers last week indicated talks were actively underway when asked about a deal on the budget.

“We’ve been regularly talking,†House Speaker Destin Hall told reporters Thursday. “At this stage, there’s still a chance that we’re going to get it done.â€

Senate leader Phil Berger also indicated there was movement, but nothing final, when asked if a deal was close. “Not yet,†he said.

The chambers are “getting closer” to a deal, Lauren Horsch, a Berger spokeswoman, told WRAL Monday night. 

Any agreement would require approval by Gov. Josh Stein, a Democrat. If he were to veto the deal, Republicans could override it with some help; the Senate has a veto-proof majority, and the House is one seat shy of a supermajority.

Stein has laid out his own budget priorities — including substantial teacher pay raises that he’d pay for by slashing funding for a key GOP priority, private school tuition vouchers.

The legislature already reached a deal to fully fund the state’s Medicaid program, in near-unanimous votes last month. That program had been among the casualties of not having a new budget. 

In North Carolina, unlike in the federal government, there’s no government shutdown when a budget fails to pass. Instead, state programs continue operating at old levels of approved spending — which has caused some issues in a fast-growing state like North Carolina.