A new fiscal year begins July 1. Here’s what no budget means for NC educator pay

Weeks after the North Carolina House and Senate voted on their individual budget proposals, negotiations are still stalled, meaning a compromise budget for Fiscal Years (FY) 2025-27 is delayed.

During the long session, the General Assembly is supposed to pass a new budget for the biennium by July 1, when the new fiscal year starts. But this year, disagreements about pay raises, personal income taxes, and other budget items led to delays in the negotiation process.

Since no budget was passed before the end of the fiscal year, state funding will continue at the current level laid out in the most recent certified budget.

That means educator pay will go unchanged until a budget or spending bill is passed later in the summer or fall. For the time being, educators and state employees will not receive raises or step increases — increases of an employee’s level on the salary schedule, based on experience — until explicitly funded by the General Assembly.

Here is a look at the current salary schedule for teachers in North Carolina, from DPI’s website:

Bill substitutes were discussed last week that would provide some temporary funding for educators, but ultimately none passed both chambers. The General Assembly previously passed a stopgap “mini-budget” in 2023; that year, when the full budget came in late September, teachers saw retroactive raises.

House Bill 125, which would provide stopgap funding while negotiations proceed, does not include a raise for educators, but would fund step increases. An amendment offered by Sen. Julie Mayfield, D-Buncombe, would have, among other things, awarded a $4,000 bonus to state employees, but it was tabled in a party-line vote.

The bill then passed the Senate but was voted down in the House.

Meanwhile, House Bill 192 passed the House but wasn’t taken up by the Senate. That bill would have funded step increases and raises for educators at the same level as the House budget proposal for the 2025-26 school year.

Teacher pay in the budget proposals this session

The House budget proposal for the next two years would raise teacher salaries by an average of 8.7%, with higher raises going toward beginning teachers.

Under the Senate proposal, teachers would receive an average 2.3% pay increase in Fiscal Year 2025-26 and an average increase of 3.3% over the biennium, plus a $3,000 bonus, Senate leader Phil Berger, R-Rockingham, said at an April press conference.

“On average, teachers will receive an additional compensation, with the step increases and the pay raise and the bonus, of 8.9% over the biennium,” he said.

Currently, starting pay for teachers is $41,000. Under the House budget proposal, that would jump to $48,000 this coming year and $50,000 in FY 2026-27. Under the Senate budget proposal, it would be $41,520 in both years of the biennium, plus the bonus of $1,500 each year.

The House budget would also restore master’s pay, meaning a teacher with a master’s degree would receive a monthly 10% salary supplement.

Gov. Josh Stein’s proposed budget, released in March, recommended raising teacher salaries overall by 10.6% on average, and would bring starting pay up to $51,200 by 2027. His proposal also called for restoring master’s pay.

While the Senate budget passed the Senate mostly along party lines, more than half of House Democrats voted for the House budget. Stein also supported the House budget in May, saying it “isn’t perfect” but “I am pleased that the House raises teacher pay to make North Carolina’s starting teacher salaries the second-highest in the Southeast and rewards our state employees with a raise.”

Principal pay

Principals would see raises under both the Senate and House budget plans, but the House’s raise would be about $1,200 more per year on average. In North Carolina, principal pay is currently determined based on average daily membership (ADM) and whether schools meet or exceed growth predictions.

Like teachers and other state employees, the Senate plan would give a $1,500 bonus in each year of the biennium to both principals and assistant principals.

Here’s a look at the House’s proposal for principal pay:

And here’s a look at the Senate’s proposal:

Under both plans, principals would also be eligible for bonuses between $1,000 and $15,000 based on their school’s growth.

Assistant principals’ salaries in both plans would be equivalent to the respective teacher salaries plus 19%, with their years of experience being the total time they have been a certified employee of North Carolina public schools.

Pay for other school employees and community college faculty and staff

Under the House plan, most central office administration employees and noncertified personnel would receive an across-the-board salary increase of 2.5%, “or an increase associated with additional adjustments provided to experience-based salary schedules.”

The Senate budget would give central office administration and noncertified personnel an across-the-board salary increase of 1.25%, plus the $1,500 bonus in each year of the biennium.

The same would apply to most community college faculty and staff: a 2.5% raise under the House plan, and a 1.25% raise under the Senate plan plus the $1,500 per year bonus.

Salaries remain stagnant against inflation

An analysis by The 74 released in May compared teacher salary growth to revenue growth in school districts across the country. According to the analysis, teacher pay has been stagnant for decades nationally, while other college-educated workers saw salaries increase and while per-pupil spending has grown.

On the report’s interactive web page, you can select North Carolina and then any district to view the difference in the district’s revenue growth from 2002-2022 and salary growth over the same period. (All data is adjusted for inflation; salary data doesn’t include bonuses or other benefits.)

For example, inflation-adjusted salaries fell by 8% in Stokes County Schools, while revenue grew 25%. Meanwhile, in some places, like Johnston County, real salary growth has increased over the 20 years.

A National Education Association report published in April corroborates the idea that teacher salaries aren’t keeping up. The report states that between 2016 and 2025, on average, North Carolina teacher salaries fell by 5% when adjusted for inflation.

What now?

On Thursday, June 26, House Speaker Destin Hall, R-Caldwell, said the House will not vote on any bills for at least two weeks. That means there won’t be any mini budget spending bills passed until after the new fiscal year starts on July 1.

A Senate resolution was sent to the House with proposed dates to reconvene for voting throughout the summer, but it wasn’t taken up by the House. Hall said he expected a proposed schedule to be sent to members this week.