NC Senate proposes compromise state budget including teacher pay raise, limiting governor powers

RALEIGH, N.C. (WTVD) -- North Carolina may be "First in Flight," but it's the last state in the country right now without a state budget - but that may be about to change.

The Republican-led General Assembly on Monday (finally) unveiled its massive biennium budget proposal after more than two months of negotiations with Gov. Roy Cooper and other Democratic lawmakers.

Though it's unclear whether Cooper will sign the $25.9 billion package, Republican leaders were confident the deal is too good to pass up.

"This budget represents months of hard work and good-faith negotiations between Republicans and Democrats, House and Senate, and our Governor," Speaker Tim Moore, R-Cleveland County, said. "Although we have many differences, we each had the common goal of coming together to create a spending plan for the state, one of the General Assembly's most important constitutional obligations. In the end, I am confident that we have come together to design a budget that truly meets the most critical needs of all North Carolinians."

READ MORE: The full budget proposal (.pdf)

Votes on the 647-page bill, more formally known as Senate Bill 105, are set to start on Tuesday.

The budget, which includes more than 1,300 pages in total, includes several high-interest items for the next two years.

"We have made significant progress over nearly two months of good-faith negotiations with the Governor, and I'm optimistic that the budget will have a strong bipartisan vote and that Gov. Cooper will sign it into law," Senate President Phil Berger, R-Rockingham, added.

WATCH: Jonah Kaplan explains nuances of the budget battle

The budget, which includes more than 1,300 pages in total, includes several high interest items for the next two years.

In the first year of the budget, fiscal year 2021-2022, the total spending will be $25.9 billion. The biggest expense in the bill is for education: a total of $14 billion, more than half of the total budget, for K-12 schools, UNC system universities, HBCUs and community colleges.

The expenditures will also cover long sought-after raises for teachers, who are slated to get an average raise of 5%over two years. All state employees, meanwhile, will also earn bonuses thanks to billions of dollars in federal grants from COVID relief packages like the American Rescue Plan.

For teachers, the bonus could be as high as $2800, and the bumps don't stop there. The proposal for the first time includes a new $100M "Teacher Supplement Assistance Fund" which lawmakers say will boost teacher salaries in all but five counties - Wake, Durham, Mecklenburg, Guilford and Buncombe.

According to the budget writers, the idea is to help the "low-wealth" counties attract and retain teachers. (Wake County, for instance, has independently approved salary increases and bonuses).

"Teachers tend to go more to the districts that are paying more," Rep. Jason Saine, R-Lincoln County, told ABC11. "So trying to up the pay in the rural areas, hoping to attract those really good teachers in subjects that don't get covered in some areas of the state. It won't solve all problems quickly but it will attempt to do some of that."

Outside of salaries, the bill also includes $1.6 billion for capital improvements and infrastructure, $1 billion for broadband expansion and $283 million to expand the Port of Wilmington, among many, many, many other provisions.

The North Carolina Association of Educators President Tamika Kelly told ABC11 in a statement Monday night, "NCAE is currently reviewing the budget document to understand the details."

She went on to say there's a lot that's not included.

"What's very clear is the state has the funds to pay for what the public overwhelmingly supports - meaningful raises, student services, adequately resourced classrooms and more to provide opportunity for all students to reach their potential. However, state lawmakers chose new tax cuts over our children's education. The budget includes more than $2 billion in new tax cuts," Kelly said. "That's a choice to prioritize tax cuts over complying with the court-mandated constitutional requirement to fund public education. Our advocacy work is not yet finished."

The NCAE is calling out the spending plan for not at all addressing a North Carolina judge's ruling, last week, which orders the state to spend $1.75 billion to narrow its public education inequities. It's the long-litigated Leandro case.

Legislative leaders have pointed out that only the general assembly has the power to appropriate funding under the state's constitution.

The provisions in the budget, moreover, include policies beyond spending.

After failing to overcome a veto earlier this year, Republicans are again hoping to limit the governor's emergency powers. This time, however, they extended the time frame for the Governor to flex those powers from seven to 30 days before the Council of State would need to approve further extensions. At 60 days, the General Assembly would get involved.

The policy also wouldn't take effect until 2023.

Governor Cooper's office on Monday only released a brief statement saying the Governor and his staff are "reviewing" the proposal.

The bill does not include Medicaid expansion, something that Gov. Roy Cooper has been fighting for years. However, it does call for a bipartisan committee to study the issue and make a recommendation to the general assembly next spring.

The bill also includes major tax cuts for corporations -- eliminating corporate tax within 10 years and lowering personal income tax to 3.99% over six years.

Cooper, himself, released his own budget principles last March, which totaled a record $27.4 billion. Cooper's proposal also included a 10% raise for teachers and principals over two years -- 5.7% in the first year and 4.3% in the second. The plan also provides a $2,000 bonus for educators.

Democrats, however, were generally relegated to the sidelines as healthy Republican majorities in the House and Senate gave the GOP first dibs at passing the budget, which each chamber did earlier this summer. Leaders in the House and Senate, moreover, agreed in principle to a budget that spends $25.7 billion - nearly $2 billion less than Cooper's proposal.

Fortunately or unfortunately, political divides over state budgets are hardly new, but what's unique to North Carolina is how the absence of an agreement does not lead to a government shutdown. Instead, the old budget snaps back into place -- and that's exactly what happened in 2019.

ABC11's Joel Brown contributed to this report.