Stein Releases Proposed North Carolina Budget For 2026–27

RALEIGH, N.C. — Governor Josh Stein on Tuesday released his recommended state budget for the 2026–27 fiscal year, outlining proposals to increase teacher pay, provide tax relief and invest in public safety, education and health care.

The proposal includes nearly $2.3 billion for public education and child care. Stein said the plan would raise starting teacher salaries to the highest in the Southeast, increase pay for all teachers and restore master’s degree pay for veteran educators. The budget also calls for expanded funding for school support staff, building repairs and free breakfast for students.

North Carolina currently ranks near the bottom nationally in per-pupil spending and below neighboring states in starting teacher pay, according to the governor’s office.

The plan also seeks to expand access to child care by increasing subsidy rates, setting a statewide reimbursement floor and investing in prekindergarten programs.

Stein’s proposal includes about $380 million in tax relief, primarily through targeted cuts and increased personal income tax deductions. The plan maintains current individual and corporate income tax rates.

In public safety and health care, the budget allocates more than $970 million for law enforcement, behavioral health services and other initiatives. It includes a 5% pay raise for law enforcement officers, correctional staff and certain health workers, along with bonuses for some law enforcement trainees and recruits.

The proposal also calls for expanding behavioral health services, including additional school psychologists and social workers, and increasing the use of co-responder teams that pair clinicians with law enforcement during crisis calls. Funding is also included for additional psychiatric hospital units and a juvenile crisis facility.

The budget fully funds the state’s Medicaid program, which provides health coverage to more than 3 million residents, and includes investments in water and wastewater infrastructure. It also proposes expanding treatment options for opioid use disorder in correctional facilities and creating a specialized unit to address fentanyl trafficking.

To support economic development, the plan allocates more than $448 million for workforce training, education and job placement programs. Proposals include free community college tuition for certain workforce credentials, expanded apprenticeship programs and additional support for rural infrastructure and agriculture.

The budget also includes nearly $338 million for government operations, including expanded Division of Motor Vehicles services, technology upgrades and cybersecurity improvements. It proposes pay raises for state employees and new services for military members transitioning to civilian life.

Stein’s proposal will be considered by the North Carolina General Assembly, which will develop and approve the final state budget.