Senate Bill 659, the “Investing in North Carolina Act,” is a broad appropriations and tax measure that would increase compensation for a wide range of public-sector workers and provide retirement cost-of-living adjustments. The bill sets a new teacher salary schedule for 2025-26, adds supplements for advanced credentials and certain school-related professions, and appropriates recurring General Fund money to implement those raises. It also provides 3% across-the-board salary increases in each year of the 2025-2027 biennium for many State-funded employees, along with special salary schedules for correctional officers, probation and parole officers, juvenile court counselors, state law enforcement officers, and State Highway Patrol personnel.
The bill also extends pay increases to community college personnel and authorizes salary increases for UNC SHRA employees, while allowing UNC’s Board of Governors flexibility over EHRA compensation. In addition to base pay changes, it replaces “longevity” pay with “retention” pay in Chapter 126 and creates two retention bonuses for eligible employees who remain continuously employed during specified periods in 2025-26, including extra bonuses for employees earning $75,000 or less. The bill further authorizes voluntary cash-out or use of certain bonus leave benefits, with reporting requirements.
For retirees, the bill provides recurring cost-of-living increases for members of the Teachers’ and State Employees’ Retirement System, the Consolidated Judicial Retirement System, and the Legislative Retirement System, including a 2% increase beginning July 1, 2025, and additional one-time supplemental payments in 2025 and 2026. It also appropriates funds to support these retirement adjustments. Separately, the bill expands the Child Care WAGE$ program statewide, directing funding to provide education-based salary supplements for early childhood educators in all 100 counties.
The bill would also create a refundable tax credit for qualifying employers equal to the lesser of 5% of wages paid or $10,000, available only to employers with annual receipts of $8 million or less, and scheduled to sunset for tax years beginning on or after January 1, 2028. Overall, the bill would significantly affect state budget law, public employee compensation statutes, retirement statutes, and the corporate income tax code.
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal sentiment in the materials supplied. Based on the bill’s content, it appears designed as a broad support package for teachers, state workers, retirees, and small employers, with likely favorable reception among employee and retiree advocates. Potential points of contention would likely center on the bill’s fiscal cost, the size and distribution of pay raises, the use of recurring versus nonrecurring appropriations, and the new employer tax credit’s revenue impact.
The bill would amend multiple North Carolina statutes governing public employee pay, retirement benefits, and taxation. It would establish new teacher salary schedules and supplements, authorize across-the-board raises and retention bonuses for State-funded employees, set specific salary schedules for certain correctional and law enforcement classifications, and direct appropriations to fund those changes. It would also amend retirement statutes to provide COLAs and supplemental payments, expand the Child Care WAGE$ program statewide through DHHS funding, and add a refundable employer wage tax credit in Chapter 105 for qualifying small employers.
No votes or committee discussion were provided, so the record does not show formal support or opposition. The bill’s structure suggests a generally positive policy direction for public employees, educators, retirees, and early childhood workers, with benefits framed as compensation increases and cost-of-living relief. At the same time, the measure likely raises budgetary concerns because it relies on substantial recurring and nonrecurring General Fund appropriations and creates a new refundable tax expenditure.
The most likely areas of contention are fiscal and distributional. Legislators concerned about spending may question the size of the appropriations for salary increases, the recurring nature of many commitments, and the impact of the refundable employer tax credit on state revenues. Others may focus on whether the bill adequately balances raises across employee groups, including exclusions for some local employees and the different treatment of SHRA versus EHRA personnel, as well as whether retention bonuses and COLAs are structured fairly across current workers and retirees.