Josh Stein signed a new North Carolina budget into law on Tuesday, making it the state’s first new spending plan in about three years. 

The state is supposed to pass new budgets on odd-numbered years. When that doesn’t happen, as was the case in 2025, the previous budget carries forward. Along with not addressing emerging issues in North Carolina, the stalled budget has resulted in zero raises for state employees, including teachers.

On July 1, the House and Senate passed a $34.4 billion budget, which was the product of a good deal of negotiating, conflict and probably a few headaches between Senate Leader Phil Berger and House Speaker Destin Hall.

In the wake of the General Assembly votes but prior to Stein’s passage of the budget, Republican leadership touted not only where some of the money in the budget is going but also the tax cuts included. The income tax rate will go from 3.99% to 3.49% next year and drop incrementally before being scheduled to hit 2.99% in 2032.

“Our state’s fiscal health remains in great shape. This is a responsible spending plan that takes aim at bureaucratic bloat without endangering core services,”Berger said in a statement. “This keeps our promise to reduce the tax burden for all North Carolinians, while expanding access to incredible educational opportunities, keeping our communities safe and solidifying North Carolina’s status as the best state in the nation.”

House Speaker Destin Hall said, “This budget invests in the people of North Carolina. It delivers historic raises, keeps taxes low, strengthens public safety and protects taxpayer dollars by making targeted investments to crack down on waste, fraud and abuse. Every dollar reflects our commitment to build a North Carolina that is a better and more affordable place to live, work and raise a family.”

Sen. Kevin Corbin (R-Macon) had a significant role in the process as the chair for the Appropriations on Education/High Education Standing Committee. Of the $34.4 billion in the budget, $19.4 was allocated to education. Corbin likened the state budget to personal finances — what you spend money on shows what you care about. Corbin said that he was happy that along with offering raises for law enforcement and state employees, the budget gave a significant bump to starting teacher pay, which will now be at $48,000.

In his speech prior to signing the budget on July 7, Stein criticized some elements included or left out by the House and Senate but also had a lot of praise, highlighting the good that can be done through compromise. He specifically noted teacher pay.

“Our kids are our future, and no investment is more important than the ones we make in them,” the governor said during the speech.

Stein added that he feels good about some of the items included in the budget to go toward further relief in the wake of Hurricane Helene, which devastated Western North Carolina in September 2024. While the $700 million included in the General Assembly bills falls about $50 million short of Stein’s request, he felt positively about what was included.

“The state of North Carolina is committed to rebuilding Western North Carolina over the long haul, and I am grateful for the legs partnership in this work,” Stein said.

Rep. Mark Pless (R-Haywood) said he was pleased with the budget, especially some of the items tied to Helene relief. There are two items the representative had specifically wanted to discuss.

The first was providing up to $30 million to rebuild or move volunteer fire stations that were damaged in Helene. While municipal fire departments received aid, private fire departments, which operate as nonprofits, have been left out to now.

Pless also talked about dams in the area that need addressed. Lake Junaluska’s dam in Haywood County will receive money for repairs, and $2.8 million is also provided for removal of the 120-year-old Capitola Dam in Marshall. While that dam originally generated electricity, Pless said it needs to be taken out since water can impound behind it during a flooding event, which can compound an already perilous weather event.

The Helene funding also includes $450 million to meet state and local requirements for federal disaster recovery programs, including FEMA public assistance and hazard mitigation grants. It provides $22 million for state-supported private road and bridge repairs, offering much-needed support to one of the aspects of recovery that has generated some of the most vocal advocates.

The budget has over $80 million in housing-related relief dollars. This includes temporary relocation assistance following the disaster and nonprofit housing construction. Volunteer Organizations Active in Disaster, known as VOADs, have built 1,000 homes in the wake of Helene, according to Pless, and he is happy to see that they will be given more resources to continue that work.

“They think they can take this money and put even more people in homes,” he said.

Pless highlighted that replenishing the state’s “rainy day fund” in the wake of Helene was a priority, with the budget adding about $450 million to bring the total in the coffers to over $4 billion. While he argued that the state is simply bolstering reserves for the next big storm, not everyone feels that is the best use of taxpayer dollars. While there are only Republican state representatives and senators in the Smoky Mountain News coverage area, Democrat Lindsey Prather represents Buncombe County, just to the east. She’s happy to have seen $700 million allocated to Helene relief — especially the money for housing-related issues — but with so many needs still yet unfulfilled, she wonders why more didn’t go toward some of those items. She was specifically disappointed to see nothing in the way of grants for small businesses affected by the hurricane. Prather argues that some of the money put into the rainy-day fund could have been better utilized.

“I would argue that’s not surplus funding because we’re not funding our state departments the way we should be funding them,” she said. “It’s Important to help the people that live here now and need our help now.” 

While Prather put a lot of onus on the federal government to work harder to meet the needs in the wake of Helene, the state can also play a larger role in recovery, she said.

Prather’s strongest opinion on the budget seems to have more to do with process than the outcome. Democrats — and even a lot of rank-and-file Republicans — were left entirely out of the negotiations, she said, adding that those negotiations between the House and Senate spilled over to affect other bills. Basically, she argued that the dysfunctional process infected just about everything the General Assembly touched. She voted in favor of the budget — since something is better than nothing, she said — but the process and product were far from ideal.

“It seemed to me on the outside to be a very chaotic and disjointed process … I’m a member of the General Assembly, and most of what I learned about the budget process was on Twitter and in the papers like everyone else,” she said.

Corbin acknowledged that the road to getting a budget was bumpy, but he feels like the product is satisfactory, all things considered. Still, he thinks a lot of the things that were eventually ironed out “could have been worked out a long time ago.” 

“I had personally had a bit of frustration that we couldn’t get that worked out a long time before now,” he said. “I think we could have. Reasons for that could be debated.”

“I’m not going to weigh in on who’s to blame,” he added. “I think there could be some blame to go around.”