When will state employees get pay raises? What can they expect?

What is the current status of pay raises for state employees?

Well into the new fiscal year, the North Carolina General Assembly has not yet agreed on a comprehensive budget. As a result, pending raises for teachers and state employees remain in limbo, with still no certainty about when that will change.

So far, the primary reason for the legislative deadlock, according to numerous sources, is a disagreement between the state House and Senate over implementing income tax cuts.

On Sept. 18, Governor Josh Stein sent a letter to the legislative leadership stating that several important matters, including pay raises, “cannot wait and demand your attention.”

What kind of raises might happen?

The governor requested that in the “absence of a comprehensive budget agreement,” lawmakers act on his request for an average pay increase in this fiscal year of 5.9% for teachers, 3% increase for other school employees, and 2% for state employees.

Teacher pay in the state ranks 43rd in the nation with the average public school teacher making $58,292 per year in 2023-2024. Starting pay for teachers is $41,000 for the 2025-2026 school year.

Earlier this year, the NC House and NC Senate separately proposed pay increases, with the House version offering somewhat larger increases. The two bodies could not come to terms on the overall budget, leaving the pay raise issue in limbo.

Another development that will have a financial impact on the state’s more than 700,000 workers and retirees is a pending increase in insurance premiums in the NC State Health Plan. Aetna administers the plan.

The changes go into effect in January 2026, the first such increase in seven years. About 84% of current participants will have an increased cost for the same plan while 16% will see a decrease, according to WRAL.

When will the legislature agree on a budget and pay raises?

Governor Stein asked legislators to take action on his pay raise request in September, but the session adjourned without addressing the issue. The General Assembly met again in October but could not come to an agreement on the budget.

What happens if there is no budget?

This is not the first time lawmakers have failed to pass a budget on time in North Carolina. In 2019, for example, no budget was ever passed.

The lack of a budget does not result in a government shutdown in North Carolina, but without additional actions by the legislature, spending freezes at the levels in the most recent budget.

In July 2025, the General Assembly did pass a “mini-budget” that did not include raises, but allows educators and some state employees to receive pre-scheduled step increases based on experience.

Here’s a look at the step increase salary schedule for educators. Any raises, however, would be included in an eventual budget agreement or some other legislation by the NC General Assembly.

Who will be affected by the decisions on pay and benefits?

According to the North Carolina Office of State Human Resources, there are currently about 72,000 full-time state employees, a count that does not include school employees.

About 46,000 active and retired state employees are also members of the State Employees Association of North Carolina (SEANC), according to the association’s spokesperson. The group advocates at the legislature on behalf of state employees and retirees.

The North Carolina Association of Educators (NCEA), which represents teachers and other public-school employees, does not reveal specific membership numbers, but a 2023 report by the NC Auditor put the number of NCEA members at just under 26,000. The State Health Plan provides health care coverage to nearly 750,000 teachers, state employees, retirees and their dependents.

What can I do?

A representative of the North Carolina Association of Educators advises members to reach out to their state legislators to lobby them on the pay raise issue, either by setting up a meeting in their district or going to speak to them in Raleigh. “Lawmakers need to hear directly from the people who work in our public schools,” he said.

A spokesperson for the State Employees Association of North Carolina said there is information on its website encouraging members to advocate for a new budget and providing information on how to find the legislators in their district. The organization also produces a regular podcast for members about the issues facing state employees and retirees.