North Carolina Gov. Josh Stein unveiled a $1.4 billion “Critical Needs Budget” this week to address urgent funding gaps while lawmakers continue negotiating a full state spending plan. The proposal would add about $1.4 billion to the state’s roughly $31–32 billion annual budget, representing an increase of about 4–5% compared with last year’s spending level.
The governor urged the North Carolina General Assembly to approve the targeted package quickly so agencies can address immediate financial needs.
Key spending priorities
A large portion of the proposal focuses on health care. The plan includes $319 million to fully fund the state’s Medicaid program, which provides coverage to more than 3 million North Carolinians.
The proposal also includes pay increases and workforce funding across several sectors, including:
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2.5% raises for most state employees
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Average teacher pay increases of roughly 6%
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Pay raises for law enforcement officers
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Salary adjustments for nurses and behavioral-health workers
Stein said the funding is needed to maintain staffing levels and keep critical services operating smoothly.
Why the proposal was introduced
North Carolina lawmakers have not passed a full state budget since 2023, leaving many agencies operating with baseline funding levels.
“North Carolina has gone nearly two and a half years without passing a new state budget – the only state in the country to finish 2025 without one,” said Governor Josh Stein in a press release. “While lawmakers work toward a full, fiscally responsible budget this spring, there are urgent needs facing our state right now like fully funding Medicaid and giving law enforcement, teachers, and other public servants a long-deserved pay raise. This budget invests in critical public safety, education and health care services for the people of North Carolina that cannot wait.”
During that time, population growth and rising costs have increased pressure on programs such as Medicaid and public education.
Stein’s proposal is designed as a temporary “mini-budget” that fills urgent funding gaps while lawmakers continue negotiating a comprehensive spending plan for the state.
