Today, Governor Roy Cooper released his recommended budget for FY 2023-2025, First in Opportunity. The plan put forth by the Governor builds on the state’s success and “once-in-a-generation” opportunity by investing in North Carolina families, businesses, and communities.

The budget includes an average 18% teacher raise over the biennium, a $1 billion plan to support mental health, the largest investment in state employee compensation in 50 years and critical funding for child care, job training, and economic development. First in Opportunity is a responsible, balanced budget that does not raise taxes for North Carolinians while maintaining almost $7 billion in reserves in case of a potential downturn.

“We are at a historic moment with unprecedented opportunity to make ‘once-in-a-generation’ investments in our future,” said Governor Cooper. “North Carolina has built on our success to strengthen our place as first in opportunity, and we will continue that growth only by making sound investments in our families, workforce, schools and communities. Let’s take advantage of our unlimited potential to make sure every North Carolinian can thrive.”

Ensuring a Sound Basic Education, 1st in the Southeast in Teacher Pay

The Governor’s budget invests substantially in public schools and a sound basic education required by the constitution for every student by raising teacher pay and including funding to help hire more educators, nurses, counselors, social workers, school psychologists, and turnaround coaches. It fully funds the remedial plan ordered by the Supreme Court.

The budget also increases teacher pay by an average of 10% in FY 2023 and 6% in FY 2024 and sets minimum starting teacher salaries at $46,000 in addition to local supplements. This would make North Carolina first in the Southeast in teacher pay and 16th in the nation, up from 32nd. The budget also seeks to address bus driver shortages across the state by raising pay 9.5% for noncertified school personnel and expanding DMV capacity to train school bus drivers.

Making Historic Investments in Child Care to Support Families

Governor Cooper recommends $1.5 billion in new funding to support child care and early childhood education needs across the state. As part of that, the budget includes $500 million for child care stabilization grants to help maintain our access to affordable early childhood education. It also includes $200 million to increase child care subsidy rates in rural and lower wealth communities. These critical investments will help children grow, parents work and employers hire.

Meeting Workforce Needs and Strengthening Economic Development

The Governor’s budget strengthens and expands North Carolina’s growing workforce by enhancing services to connect employers and employees as well as investing in community college and four-year universities. It also provides increased funding for credentialing, internships, and pre-apprenticeships to help people move directly into good-paying jobs.

The budget supports proven economic development investments with funding for additional megasite development, local government grants, downtown revitalization grants, and state-supported innovation programs.

Bolstering Mental Health Services and Programs

The Governor’s budget confronts the urgent mental health and substance use crisis by investing $1 billion of the Improve Health Outcomes for People Everywhere or “IHOPE” fund as he announced last week. The plan focuses on three areas: making mental health services more available when and where people need them; building strong systems to support people in crisis and people with complex behavioral needs; and enabling better health access and outcomes with data and technology.

Other investments in supporting mental health include additional school counselors and psychologists, a juvenile justice residential crisis unit, and higher education programs such as mental health first aid.

Public Safety and Violent Crime Prevention

The Governor’s budget bolsters public safety and prevents violent crime by investing in school safety grants, support for local law enforcement, and community-based violence prevention programs. It also supports violence and gang prevention strategies while investing in the expansion of successful re-entry and community supervision programs.

Building Healthy, Resilient Communities

The Governor’s budget invests in building healthy and resilient communities by stabilizing operations at rural hospitals and supporting health professionals in rural and underserved areas, investing in aging in place and affordable housing programs for seniors, and tackling housing barriers for North Carolina’s workforce, families, veterans and people with disabilities.

The budget makes significant investments in resilience programs over the biennium, including flood mitigation, floodplain buyouts, streamflow rehabilitation and flood risk reduction acquisition projects. It also invests in improving power substation resiliency and supports the preservation of natural areas, waterways, and farmlands while assisting landowners with water quality, agricultural, and forestry best practices through state cost share programs.

The budget proposes at least $5 million to support the people of Canton and western North Carolina following Evergreen Packaging’s announcement of its intention to close the century-old paper mill that is a major employer in the community.

Ensuring Excellent Services for North Carolinians

As recruitment and retention of state employees continues to be a challenge, the Governor’s budget makes the largest investment in state employees in 50 years by providing a comprehensive compensation package to ensure state agencies can compete for talent. The budget implements a 5% across the board raise for state employees in the first year of the biennium and another 3% in the second year. It provides an additional 1.5% raise in the first year to employees in step plans and it provides funding to agencies to increase pay and bonuses even further for hard to fill jobs. It also provides one-time bonuses to state employees, more vacation time, and converts longevity pay into retention pay.

Prioritizing Tax Fairness while Saving for a Rainy Day

The Governor’s budget implements tax breaks for middle class families and maintains recently reduced tax rates for the wealthy and corporations. State tax revenue projections for future years level off dramatically so in order to support strong communities, everyone should pay their fair share.

While our state is growing and revenues are strong, it is important to be prepared. The Governor’s budget keeps nearly $7 billion in reserves in case of a downturn.