2016 Budget Highlights

The Republican-led General Assembly and Governor Pat McCrory have worked hard to reach a reasonable and responsible budget agreement that will continue to make North Carolina the best state in the nation to live, work, and innovate. This new budget agreement includes historic teacher pay increases, raises for state employees and retirees, and prudent savings measures to allow for our State’s future needs.

This budget agreement will continue to launch North Carolina ahead of every other state in the nation for teacher pay raises. Over the next three years, our average teacher salaries will be nearly $55,000, for the first time in state history. Again, we are cutting taxes for everyone in North Carolina, which will continue to prove North Carolina as the state with the fastest growing economy in the nation. And we are helping families with college tuition programs.

Highlights of the budget agreement include:

Veterans Employment Opportunities

Establishes an apprenticeship program for five disabled veterans to get training in cybersecurity and information technology. Getting our veterans training and opportunities in the modern economy is critical.


Increases education funding by $512 million.

Boosts average teacher salaries to $50,000 for the next school year and to nearly $55,000 within three years, for the first time in state history.

North Carolina is already the highest state in the nation for teacher pay raises.

Guarantees no in-state tuition increases for a standard undergraduate college term at all NC public universities, providing certainty to families who are budgeting for college costs and incentive to students to complete their degrees on time.

State Employees and Retirees

Includes a 1.5 percent permanent pay increase and 0.5 percent one-time bonus for state employees, over $80 million for merit-based bonuses, and a 1.6 percent cost of living bonus for retirees.

Economic Development & Taxes

Provides an immediate $145 million tax cut this year and an additional $205 million tax cut next year, mostly benefiting middle class families and small businesses.

Increases the zero percent tax bracket over the next two years – ensuring all North Carolina taxpayers, regardless of income, pay no state income taxes on more of their earnings.

Allows for an increase in the standard deduction from $15500 to $16500 and $17500 the year after, providing further tax relief to those who need it most.

Responsible Savings

This budget agreement responsibly plans for North Carolina’s future needs by shoring up the State’s rainy day fund by close to $475 million.