On Tuesday afternoon, Senate Pres. Pro Tem Phil Berger, R-Rockingham, and House Speaker Destin Hall, R-Caldwell, stepped to a podium in the legislative building in Raleigh and told reporters they had found a framework. After ten months without a comprehensive state budget — a standoff that left North Carolina the only state in the country still operating on a stale spending plan — the two chambers had agreed on the two issues that had stuck the hardest: taxes and raises.

The agreement, as reported by The Assembly's Bryan Anderson and WBTV's Spencer Chrisman, runs in two directions. Personal income tax rates will step down through 2034 — from the current 3.99 percent to 3.49 percent in 2027, then 3.24 percent in 2030, then 2.99 percent in 2033 — and a constitutional amendment locking the rate at 3.5 percent will go on the November ballot. Most state employees will receive raises of about 3 percent. Teachers will receive raises averaging 8 percent and a starting salary floor of $48,000 before local supplements.

That same morning, the Bureau of Labor Statistics reported that inflation had climbed to 3.8 percent in April.

Berger called the announcement a starting point. The math is not.

The framework, in numbers

The agreement covers raises, bonuses, and tax rates. It does not yet include the full budget — Berger told reporters legislative language is still being drafted and the chambers are aiming for a vote by mid-June. The structural pieces are now on the table.

Teachers get the biggest civilian-side move: 8 percent average, the $48,000 starting salary floor, and a tenure-tiered bonus of $1,000 for teachers with more than 16 years of experience and $500 for those with less. Hall called the package "unprecedented" for education in the state and said the starting salary would rank first in the South once local supplements are included.

Most other state employees get the 3 percent average plus a flat bonus — $1,750 for workers making less than $65,000, $1,000 for those making more. State retirees get a one-time 2.5 percent bonus.

State law enforcement gets the largest percentage moves in any category. SBI and Alcohol Law Enforcement officers average 20.3 percent. State Highway Patrol troopers average 17.7 percent. Correctional officers average 15.4 percent. Probation and parole officers average 10.1 percent. Other state law enforcement, including capitol police, gets a 13 percent raise. The framework also sets aside $40.1 million for one-time $1,750 bonuses to local law enforcement.

On taxes, the ladder runs three years per step. Tax years 2027 through 2029 land at 3.49 percent. Tax years 2030 through 2032 drop to 3.24 percent. Tax years 2033 and 2034 drop again to 2.99 percent. The Assembly's published schedule ends at 2034; WBTV's coverage of the same press conference described the rate continuing to "a final goal of a state income tax rate of 2.49 percent," but did not pin that figure to a year. Corporate income tax rates are unchanged; the corporate rate's scheduled phase-out by the end of the decade continues on its existing track.

Two constitutional amendments will appear on the November ballot. The first caps the personal income tax rate at 3.5 percent — locking the post-2027 rate as a constitutional ceiling. The second would limit how much local governments can raise property taxes; House Republicans could vote to send it forward as early as this week.

The math problem

The deal is smaller on raises than state-employee advocates wanted and bigger on taxes than the Senate's fiscal conservatives wanted. House Minority Leader Robert Reives, D-Chatham, was the first to put the math out in public.

"Any pay raise that falls below inflation and the increased cost of the State Health Plan will effectively be a pay cut for employees who serve our state," Reives told WRAL.

Ardis Watkins, executive director of the State Employees Association of North Carolina, made the same point before the framework was announced. The 3 percent figure had been leaking from the negotiation since Monday. "It's a cycle," Watkins told WRAL. "It's not fiscally responsible. It's not saving any taxpayer money."

A 3 percent raise on a stagnant base, paired with rising health-premium contributions and 3.8 percent inflation, lands on the negative side of the ledger before the paycheck is processed. The teacher number reads differently. Eight percent is above inflation, and the $48,000 starting floor is a structural fix rather than a one-year bump. Teachers are the only category of civilian state worker the framework gives a real raise to.

The CMS variable

Charlotte-Mecklenburg Schools knew this number was coming. On May 6, CFO Kelly Kluttz told the school board the district had set aside $6.6 million as a hedge against state salary uncertainty — enough to cover about 5 percent if the state delivered something close to that. The legislature's actual number is 8 percent.

The district cannot absorb the gap from its existing reserve. The state of North Carolina funds 78 percent of CMS positions; the county fills another 15 percent. When the state raises a teacher's salary by 8 percent, the locally-funded portion has to move with it — and the county cannot backfill after the fiscal year closes on June 30.

Superintendent Crystal Hill's amended $2.1 billion budget, approved unanimously by the school board on Tuesday — the same Tuesday Berger and Hall held their press conference — does not yet incorporate the 8 percent figure. The board approved the envelope and the six negotiated changes inside it. The state line is the variable that resolves later.

The veto math

If the framework becomes a bill the General Assembly passes in mid-June, it goes to Gov. Josh Stein. Stein, a Democrat, has ten days to sign, veto, or let it become law. The Senate's Republican supermajority can override a veto on its own. The House cannot — Republicans are one vote shy of the 72-seat three-fifths threshold needed to override without Democratic crossover.

The one-vote gap runs through HD-106. Rep. Carla Cunningham — the seven-term Charlotte Democrat who lost her March primary and re-registered Unaffiliated on April 24 — has not said whether she will caucus with Democrats, with Republicans, or vote case by case through the end of her term in January 2027. Her vote on a hypothetical override is the variable Speaker Hall would be counting.

Stein's response Tuesday was two-sided. On the raises, he was cautious-positive: "It is past time that our teachers, state law enforcement officers, and state employees get a meaningful pay raise and recognition for their service to the people of North Carolina. Today's announcement is only a framework, but if the final budget actually includes real salary increases, it would be welcome. The proof, however, will be in the pudding."

On the constitutional tax cap, he was sharply hostile. "The proposed constitutional amendment would put North Carolina in a financial straight jacket that could wreak havoc on our public schools and public safety," Stein said. "If we want to continue to be the best state to live, work, and raise a family for years to come, we must be fiscally responsible and not make working families bear an unfair burden."

The two halves of Stein's statement frame the politics of the next month. He may sign or quietly accept a budget that delivers real raises. He will publicly oppose the constitutional amendment that goes to voters in November regardless of what the budget does.

Stein has also laid out his own budget priorities — including substantial teacher raises he'd planned to pay for by cutting state funding for private school tuition vouchers. The framework as announced makes no mention of changes to voucher funding. Whether the final bill closes the gap between his stated priorities and the GOP's depends on what shows up in the legislative language between now and June.

What's still open

Berger's "starting point" framing is operational. The framework resolves the raises and the tax ladder. It does not resolve NCInnovation — the nonprofit helping university researchers commercialize their work has $500 million in state funds, and the chambers disagree over whether to claw back all of it (the House position) or keep $100 million (the Senate position). It does not fully resolve the joint UNC–Duke children's hospital; the framework allocates $208 million for the project, but the operating details are not yet on paper. Hurricane Helene recovery funding is not in the framework — Hall told reporters a separate bill is likely. And the dozens of smaller line items in a normal budget bill — vacant state jobs, UNC tuition policy, public-university cuts — remain unsettled.

The framework is the resolution of the two negotiating items that had been blocking everything else. It clears the runway for a final budget vote. It is not the vote, and it is not a deal with the governor.

On the most concrete number in it — the 3 percent raise for most state workers — it is on the wrong side of inflation.

Berger said the framework was a starting point. He is correct.