Investing in North Carolina Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 962

Short Title: Investing in North Carolina Act. (Public)
Sponsors: Senators Grafstein and Garson (Primary Sponsors).
Referred to: Rules and Operations of the Senate
May 4, 2026
*S962-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO APPROPRIAT E FUNDS TO RAISE SAL ARIES FOR TEACHERS, STATE 2
EMPLOYEES, COMMUNITY COLLEGE EMPLOYEES, AND EMPLOYEES OF THE 3
UNIVERSITY OF NORTH CAROLINA AND TO PROV IDE A COST -OF-LIVING 4
INCREASE FOR RETIREE S IN THE EVENT THE CURRENT OPERATIONS 5
APPROPRIATIONS ACT D OES NOT BECOME LAW A ND TO PROVIDE FOR 6
FUTURE SALARY INCREA SES FOR TEACHERS, ST ATE EMPLOYEES, 7
COMMUNITY COLLEGE EM PLOYEES, AND EMPLOYE ES OF THE UNIVERSITY 8
OF NORTH CAROLINA IN THE EVENT FUTURE CU RRENT OPERATIONS 9
APPROPRIATIONS ACTS DO NOT BECOME LAW. 10
The General Assembly of North Carolina enacts: 11
12
PART I. CONTINGENT EFFECT FOR CERTAIN PROVISIONS OF THIS ACT 13
SECTION 1. Part II and Part III of this act become effective only if the Current 14
Operations Appropriations Act for the 2026 -2027 fiscal year does not become law in the 2025 15
Regular Session of the General Assembly. In that case, the effective date of Part II and Par t III 16
of this act shall be the earlier of the following: 17
(1) The first day after the General Assembly adjourns the 2025 Regular Session 18
sine die. 19
(2) January 1, 2027. 20
21
PART II. RAISE TEACHER SALARIES 22
SECTION 2.(a) The following monthly teacher salary sche dule shall apply for the 23
2026-2027 fiscal year to licensed personnel of the public schools who are classified as teachers. 24
The salary schedule is based on years of teaching experience. 25
2026-2027 Teacher Monthly Salary Schedule 26
Years of Experience "A" Teachers 27
0 $4,600 28
1 $4,685 29
2 $4,770 30
3 $4,855 31
4 $4,940 32
5 $5,025 33
6 $5,110 34
7 $5,195 35
8 $5,280 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 962-First Edition
9 $5,365 1
10 $5,450 2
11 $5,535 3
12 $5,620 4
13 $5,705 5
14 $5,790 6
15 $5,875 7
16 $5,950 8
17-19 $6,070 9
20-22 $6,135 10
23-25 $6,200 11
26-28 $6,295 12
29+ $6,370 13
SECTION 2.(b) Salary Supplements for Teachers Paid on This Salary Schedule. – 14
(1) Licensed teachers who have NBPTS certification shall receive a salary 15
supplement each month of twelve percent (12%) of their monthly salary on 16
the "A" salary schedule. 17
(2) Licensed teachers who are classified as "M" teachers shall receive a salary 18
supplement each month of ten percent (10%) of their monthly salary on the 19
"A" salary schedule. 20
(3) Licensed teachers with licensure based on academic preparation at the 21
six-year degree level sha ll receive a salary supplement of one hundred 22
twenty-six dollars ($126.00) per month in addition to the supplement provided 23
to them as "M" teachers. 24
(4) Licensed teachers with licensure based on academic preparation at the 25
doctoral degree level shall recei ve a salary supplement of two hundred 26
fifty-three dollars ($253.00) per month in addition to the supplement provided 27
to them as "M" teachers. 28
(5) Certified school nurses shall receive a salary supplement each month of ten 29
percent (10%) of their monthly salary on the "A" salary schedule. 30
(6) School counselors who are licensed as counselors at the master's degree level 31
or higher shall receive a salary supplement of one hundred dollars ($100.00) 32
per month. 33
SECTION 2.(c) For school psychologists, school speech pathologists who are 34
licensed as speech pathologists at the master's degree level or higher, and school audiologists 35
who are licensed as audiologists at the master's degree level or higher, the following shall apply: 36
(1) The first step of the salary schedule shall be equivalent to the sixth step of the 37
"A" salary schedule. 38
(2) These employees shall receive the following salary supplements each month: 39
a. Ten percent (10%) of their monthly salary, excluding the supplement 40
provided pursuant to sub-subdivision b. of this subdivision. 41
b. Five hundred dollars ($500.00). 42
(3) These employees are eligible to receive salary supplements equivalent to those 43
of teachers for academic preparation at the six -year degree level or the 44
doctoral degree level. 45
(4) The twenty -sixth step of the salary schedule shall be seven and one -half 46
percent (7.5%) higher than the salary received by these same employees on 47
the twenty-fifth step of the salary schedule. 48
SECTION 2.(d) Beginning with the 2014 -2015 fiscal year, in lieu of provid ing 49
annual longevity payments to teachers paid on the teacher salary schedule, the amounts of those 50
longevity payments are included in the monthly amounts under the teacher salary schedule. 51
General Assembly Of North Carolina Session 2025
Senate Bill 962-First Edition Page 3
SECTION 2.(e) A teacher compensated in accordance with this salary schedule for 1
the 2026-2027 school year shall receive an amount equal to the greater of the following: 2
(1) The applicable amount on the salary schedule for the applicable school year. 3
(2) For teachers who were eligible for longevity for the 2013 -2014 school year, 4
the sum of the following: 5
a. The salary the teacher received in the 2013-2014 school year pursuant 6
to Section 35.11 of S.L. 2013-360. 7
b. The longevity that the teacher would have received under the longevity 8
system in effect for the 2013 -2014 school year provided in Section 9
35.11 of S.L. 2013-360 based on the teacher's current years of service. 10
c. The annual bonus provided in Section 9.1(e) of S.L. 2014-100. 11
(3) For teachers who were not eligible for longevity for the 2013 -2014 school 12
year, the sum of the salary and annual bonus the teacher received in the 13
2014-2015 school year pursuant to Section 9.1 of S.L. 2014-100. 14
SECTION 2.(f) As used in this section, the term "teacher" shall also include 15
instructional support personnel. 16
SECTION 2.(g) There is appropriated from the General Fund to the Department of 17
Public Instruction for the 2026-2027 fiscal year the sum of nine hundred twenty-one million two 18
hundred thousand dollars ($921,200,000) in recurring funds to implement the teacher raises 19
provided in this section. 20
21
PART III. PAY RAISES FOR STATE EMPLOYEES /COMMUNITY 22
COLLEGES/UNIVERSITY OF NORTH CAROLINA AN D COST -OF-LIVING 23
INCREASES FOR RETIREES 24
25
ELIGIBLE STATE -FUNDED EMPLOYEES AWARDED COST -OF-LIVING 26
ADJUSTMENT/LEGISLATIVE SALARY INCREASES 27
SECTION 3.1.(a) Effective July 1, 2026, except as provided by subsection (c) of 28
this section, a person (i) whose salary is set by this Part, pursuant to the North Carolina Human 29
Resources Act or as otherwise authorized in this act, and (ii) who is employed in a State-funded 30
position on June 30, 2025, is awarded a compensation adjustment as follows: 31
(1) Six percent (6%) effective July 1, 2026. 32
(2) As otherwise allowed or provided by law. 33
SECTION 3.1.(b) For the 2026 -2027 fiscal year, the following persons are not 34
eligible to receive the legislative salary increases provided by subsection (a) of this section: 35
(1) Employees of local boards of education. 36
(2) Local community college employees. 37
(3) Employees of The University of North Carolina. 38
(4) Clerks of superior court compensated under G.S. 7A-101. 39
(5) Officers and employees of the Department of Adult Correction or Department 40
of Public Safety to which Section 3.7 or 3.8 of this Part applies. 41
(6) State law enforcement officers to which Section 3.9 of this Part applies. 42
(7) Employees of the State Highway Patrol to which Section 3.9A of this Part 43
applies. 44
(8) Employees of schools operated by the Department of Health and Human 45
Services, the Department of Public Safety, the Department of Adult 46
Correction, the Governor Morehead School for the Blind, the Ea stern North 47
Carolina School for the Deaf, the North Carolina School for the Deaf, and the 48
State Board of Education who are paid based on the Teacher Salary Schedule. 49
SECTION 3.1.(c) Permanent part -time employees shall receive the increase 50
authorized by this section on a prorated and equitable basis. 51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 962-First Edition
SECTION 3.1.(d) No eligible State -funded employee shall be prohibited from 1
receiving the full salary increase provided in this section solely because the employee's salary 2
after applying the legislative increa se is above the maximum of the salary range prescribed by 3
the State Human Resources Commission. 4
5
RECEIPT-SUPPORTED COST-OF-LIVING ADJUSTMENT RESERVE 6
SECTION 3.2. State Agencies are authorized to use the funding allotted to them 7
from the Receipt-Supported Cost-of-Living Adjustment Reserve to fundshift a limited number 8
of receipt-supported positions in the General Fund to net appropriation funding. 9
10
RETENTION PAY FOR STATE EMPLOYEES 11
SECTION 3.3.(a) All references to "longevity" pay in Chapter 126 of the Gen eral 12
Statutes shall be replaced with "retention" pay. 13
SECTION 3.3.(b) The amount of retention pay provided to employees who are 14
full-time or over half-time and have a permanent, time-limited, or probationary appointment and 15
who are in pay status for one -half of the regularly scheduled workdays and holidays in a pay 16
period shall be increased to the following amounts: 17
Years of Total Service Retention Pay Percentage 18
2 but less than 5 years 1.0% 19
5 but less than 10 years 1.5% 20
10 but less than 15 years 2.0% 21
15 but less than 20 years 2.5% 22
20 but less than 25 years 3.5% 23
25 or more years 4.5% 24
25
RETENTION BONUS AWARDED FOR FISCAL YEAR 26
SECTION 3.4.(a) Any person (i) whose salary is set by this Part or set pursuant to 27
the North Carolina Human Resources Act and (ii) who is continuously employed by the State or 28
a public school unit from July 1, 2026, to October 31, 2026, shall be awarded a retention bonus 29
for the 2026-2027 fiscal year in the amount of five hundred dollars ($500.00), payable during the 30
month of November 20 26. For otherwise eligible local education employees, eligibility for the 31
bonus shall be measured beginning not on July 1, 2026, but on the first day when staff report for 32
the 2026-2027 school year. 33
SECTION 3.4.(b) Any person (i) whose salary is set by th is Part or set pursuant to 34
the North Carolina Human Resources Act and (ii) who is continuously employed by the State or 35
a public school unit from November 1, 2026, to March 31, 2027, shall be awarded an additional 36
retention bonus for the 2026 -2027 fiscal year in the amount of five hundred dollars ($500.00), 37
payable during the month of April 2027. 38
SECTION 3.4.(c) Employers of State employees and local education employees 39
shall provide an additional retention bonus of two hundred fifty dollars ($250.00), pay able 40
during the month of November 2026, to all permanent full -time State employees and local 41
education employees who are continuously employed by the State or a public school unit from 42
July 1, 2026, to October 31, 2026 , and who earn an annual salary that does not exceed 43
seventy-five thousand dollars ($75,000). 44
SECTION 3.4.(d) Employers of State employees and local education employees 45
shall provide an additional retention bonus of two hundred fifty dollars ($250.00), payable 46
during the month of April 2027, to all permanent full-time State employees and local education 47
employees who are employed by the State or a public school unit from November 1, 2026, to 48
March 31, 2027, and who earn an annual salary that does not exceed seventy -five thousand 49
dollars ($75,000). 50
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Senate Bill 962-First Edition Page 5
SECTION 3.4.(e) The funds appropriated for retention bonuses in excess of the 1
amounts required to implement these bonuses shall revert and not be credited to the Pay Plan 2
Reserve. 3
SECTION 3.4.(f) Notwithstanding G.S. 135-1(7a), the compensation bonuses 4
awarded by this section are not compensation under Article 1 of Chapter 135 of the General 5
Statutes, the Teachers' and State Employees' Retirement System. 6
SECTION 3.4.(g) The compensation bonuses awarded by this section are not part 7
of annual salary and shall be paid out separately. The compensation bonus shall be awarded to 8
eligible permanent employees without regard to an employee's placement within the salary range, 9
including employees at the top of the salary range. The compensation bonus shall be adjusted pro 10
rata for permanent part-time employees. 11
12
COMMUNITY COLLEGES 13
SECTION 3.5.(a) Effective July 1, 2026, the State Board of Community Colleges 14
shall provide community college faculty and non -faculty personnel with an across -the-board 15
salary increase in the amount of six percent (6%). 16
SECTION 3.5.(b) The minimum salaries for nine -month, full -time curriculum 17
community college faculty for the 2026-2027 fiscal year are as follows: 18
Education Level FY 2026-27 19
Vocational Diploma/Certificate or Less $45,746 20
Associate Degree or Equivalent 46,383 21
Bachelor's Degree 49,142 22
Master's Degree or Education Specialist 51,591 23
Doctoral Degree 55,120 24
SECTION 3.5.(c) No full-time faculty member shall earn less than the minimum 25
salary for his or her education level. The pro rata hourly rate of the minimum salary for each 26
education level shall be used to determine the minimum salary for part-time faculty members. 27
28
UNIVERSITY OF NORTH CAROLINA SYSTEM 29
SECTION 3.6.(a) Effective for the 2025-2027 fiscal biennium, the annual salaries 30
of The University of North Carolina SHRA employees shall be increased as provided by Section 31
3.1 of this Part. 32
SECTION 3.6.(b) For the 2026 -2027 fiscal year, the Board of Governors of The 33
University of North Carolina may provide EHRA employees a salary increase pursuant to the 34
policies adopted by the Board. Funds for EHRA compensation increases may be used for any 35
one or more of the following purposes: (i) merit pay, (ii) across -the-board increases, (iii) 36
recruitment bonuses, (iv) retention increases, and (v) any other compensation increase pursuant 37
to those policies. 38
SECTION 3.6.(c) The Board of Governors of The University of North Carolina shall 39
make a report on the use of compensation increases and bonus funds to the General Assembly by 40
no later than March 1 of each year of the biennium. 41
42
CORRECTIONAL OFFICER SALARY SCHEDULE 43
SECTION 3.7.(a) State employees serving as correctional officers in the Department 44
of Adult Correction shall be compensated at a specific pay rate on the basis of a salary schedule 45
determined according to the duration of the employee's correctional officer work experience. 46
SECTION 3.7.(a1) State employees serving in the Department of Public Safety, 47
Division of Juvenile Justice and Delinquency Prevention, shall be compensated at a specific pay 48
rate set on the basis of a salary schedule determined according to the duration of the employee's 49
work experience, as follows: 50
General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 962-First Edition
(1) Youth Counselor Technicians shall be paid under the Correctional Officer I 1
salary schedule. 2
(2) Youth Services Behavioral Specialists shall be paid under the Correctional 3
Officer II salary schedule. 4
(3) Youth Counselors sha ll be paid under the Correctional Officer III salary 5
schedule. 6
SECTION 3.7.(b) The following annual salary schedule applies under this section 7
for the 2026-2027 fiscal year, effective July 1, 2026: 8
9
FY 2026-27 10
Experience COI COII COIII 11
0 $39,913 $41,226 $44,089 12
1 $42,705 $44,110 $47,176 13
2 $45,269 $46,804 $50,008 14
3 $47,531 $49,095 $52,508 15
4 $49,432 $51,059 $54,608 16
5 $50,916 $52,590 $56,246 17
6+ $51,935 $53,642 $57,371 18
19
PROBATION AND PAROLE OFFICER/JUVENILE COURT COUNSEL ORS – 20
SALARY SCHEDULE 21
SECTION 3.8.(a) Probation and parole officers shall be compensated pursuant to 22
the experience -based salary schedule based on the officer's respective work experience, as 23
established in subsection (b) of this section. 24
SECTION 3.8.(a1) State employees serving in the Department of Public Safety, 25
Division of Juvenile Justice and Delinquency Prevention, as Juvenile Court Counselors shall be 26
compensated under the probation and parole officer salary schedule. 27
SECTION 3.8.(b) The following annual salary schedule applies under subsections 28
(a) and (a1) of this section for the 2026-2027 fiscal year, effective July 1, 2026: 29
30
Years of Experience FY 2026-27 31
0 $48,189 32
1 51,320 33
2 54,658 34
3 58,209 35
4 61,994 36
5 66,023 37
6+ 70,314 38
39
STATE LAW ENFORCEMENT OFFICER SALARY SCHEDULE 40
SECTION 3.9.(a) Law enforcement officers of the Alcohol Law Enforcement and 41
the State Bureau of Investigation compensated pursuant to an experience -based salary schedule 42
shall be compensated based on the offic er's respective work experience pursuant to the salary 43
schedule in subsection (b) of this section. 44
SECTION 3.9.(b) The following annual salary schedule applies under subsection 45
(a) of this section for the 2026-2027 fiscal year, effective July 1, 2026: 46
47
Years of Experience FY 2026-27 48
0 $56,733 49
1 60,423 50
2 64,350 51
General Assembly Of North Carolina Session 2025
Senate Bill 962-First Edition Page 7
3 68,533 1
4 72,988 2
5 77,732 3
6+ 82,785 4
5
STATE HIGHWAY PATROL/SALARY SCHEDULE 6
SECTION 3.9A.(a) Law enforcement officers of the State Highway Patrol 7
compensated pursuant to an experience-based salary schedule shall be compensated based on the 8
officer's respective work experience pursuant to the salary schedule in subsection (b) of this 9
section. 10
SECTION 3.9A.(b) The following annual salary schedule applies under subsection 11
(a) of this section for the 2026-2027 fiscal year, effective July 1, 2026: 12
13
Years of Experience FY 2026-27 14
0 $58,350 15
1 62,142 16
2 66,181 17
3 70,483 18
4 75,064 19
5 79,943 20
6+ 85,140 21
22
STATE AGENCY TEACHERS 23
SECTION 3.10.(a) Employees of schools operated by the Department of Health and 24
Human Services, the Department of Public Safety, the Department of Adult Correction, and the 25
State Board of Education who are paid on the Teacher Salary Schedule shall be paid as authorized 26
in this act. 27
SECTION 3.10.(b) Employees of the School of Science and Mathem atics of The 28
University of North Carolina who are paid pursuant to a salary schedule adopted by the North 29
Carolina School of Science and Mathematics Board of Trustees shall be paid in accordance with 30
the schedule adopted by the Board. 31
SECTION 3.10.(c) Employees of the Governor Morehead School for the Blind, the 32
Eastern North Carolina School for the Deaf, and the North Carolina School for the Deaf shall be 33
paid as authorized in this act. 34
35
ALL STATE -SUPPORTED PERSONNEL/FLEXIBLE ADMINISTRATION OF 36
COST-OF-LIVING ADJUSTMENTS 37
SECTION 3.11.(a) The cost -of-living adjustments authorized for the 2026 -2027 38
fiscal year shall be paid effective on July 1, 2026, and do not apply to persons separated from 39
service due to resignation, dismissal, reduction in force, deat h, or retirement or whose last 40
workday is prior to June 30, 2026. 41
SECTION 3.11.(b) The Director of the Budget is granted flexibility to administer 42
the compensation increases enacted by this act. 43
SECTION 3.11.(c) The State employer contribution rates enac ted by this act for 44
retirement and related benefits may be deemed by the Director of the Budget for administrative 45
purposes to become effective after July 1 of the applicable fiscal year to provide flexibility in the 46
collection and reconciliation of salary -related contributions as required by law, provided the 47
estimated amount contributed to any affected employee benefit trust equals the amount that 48
would have been contributed to the employee benefit trust if the enacted employer contribution 49
rates had been effective on July 1 of the applicable fiscal year. 50
General Assembly Of North Carolina Session 2025
Page 8 Senate Bill 962-First Edition
SECTION 3.11.(d) This section applies to all employees paid from State funds, 1
whether or not subject to or exempt from the North Carolina Human Resources Act, including 2
employees of public schools, community colleges, and The University of North Carolina. 3
4
MOST STATE EMPLOYEES 5
SECTION 3.12. Unless otherwise expressly provided by this Part, the annual salaries 6
in effect for the following persons on June 30, 2026, shall be legislatively increased as provided 7
by Section 3.1 of this act: 8
(1) Permanent, full -time State officials and persons whose salaries are set in 9
accordance with the State Human Resources Act. 10
(2) Permanent, full-time State officials and persons in positions exempt from the 11
State Human Resources Act. 12
(3) Permanent, part-time State employees. 13
(4) Temporary and permanent hourly State employees. 14
15
USE OF FUNDS APPROPRIATED FOR COST -OF-LIVING ADJUSTMENT/BENEFIT 16
INCREASES 17
SECTION 3.13.(a) The Office of State Budget and Management shall ensure that 18
the appropriations made in this act for cost-of-living adjustments and employee benefits are used 19
only for these purposes. 20
SECTION 3.13.(b) If the Director of the Budget determines that funds appropriated 21
to a State agency for mandated salary increases a nd employee benefits exceed the amount 22
required by that agency for those purposes, the Director may reallocate those funds to other State 23
agencies that received insufficient funds for required cost-of-living and benefit increases. 24
SECTION 3.13.(c) Funds appropriated for cost-of-living adjustments and employee 25
benefit increases may not be used to adjust the budgeted salaries of vacant positions or to provide 26
salary increases in excess of those required by the General Assembly except to increase the 27
budgeted salary of any position to the minimum of the position's salary range and to meet 28
retention pay needs. 29
SECTION 3.13.(d) Any funds appropriated for cost -of-living adjustment and 30
employee benefit increases in excess of the amounts required to implement the increases pursuant 31
to subsection (c) of this section shall be credited to the Pay Plan Reserve. 32
SECTION 3.13.(e) No later than March 1, the Office of State Budget and 33
Management shall report to the Fiscal Research Division on the expenditure of funds for 34
legislatively mandated salary increases and employee benefits. This report shall include at least 35
the following information for each State agency: 36
(1) The total amount of funds that the agency received for legislatively mandated 37
salary increases and employee benefits. 38
(2) The total amount of funds transferred from the agency to other State agencies 39
pursuant to subsection (b) of this section. This section of the report shall 40
identify the amounts transferred to each recipient State agency. 41
(3) The total amount of funds used by the agency for legislatively mandated salary 42
increases and employee benefits. 43
(4) The amount of funds used pursuant to subsection (c) of this section. 44
45
MITIGATE BONUS LEAVE 46
SECTION 3.14. During the 2025-2027 fiscal biennium, State agencies, departments, 47
institutions, the North Carolina Community College System, and The University of North 48
Carolina may offer State employees the opportunity to use or to cash in special bonus leave 49
benefits that have accrued pursuant to Section 28.3A of S.L. 2002-126, Section 30.12B(a) of S.L. 50
General Assembly Of North Carolina Session 2025
Senate Bill 962-First Edition Page 9
2003-284, Section 29.14A of S.L. 2005 -276, and Section 35.10A of S.L. 2014 -100, but only if 1
all of the following requirements are met: 2
(1) Employee participation in the program must be voluntary. 3
(2) Special leave that is liquidated for cash payment to an employee must be 4
valued at the amount based on the employee's current annual salary rate. 5
(3) By September 1, 2026, a report on the demographic information shall be 6
submitted to the respective agency head or employing agency and to the Fiscal 7
Research Division. 8
9
PROVIDE COST-OF-LIVING ADJUSTMENT FOR RETIREES OF THE TEACHERS' 10
AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLIDATED 11
JUDICIAL RETIREMENT SYSTEM, AND THE LEGISLATIVE RETIREMENT 12
SYSTEM 13
SECTION 3.15.(a) G.S. 135-5 is amended by adding the following new subsections 14
to read: 15
"(aaaa) Effective July 1, 202 6, the retirement allowance payable to, or on account of, 16
beneficiaries whose retirement commenced on or before July 1, 2025, is increased by two percent 17
(2%) of the allowance payable on June 1, 2026, in accordance with subsection (o) of this section. 18
Effective July 1, 2026, the retirement allowance payable to, or on account of, beneficiaries whose 19
retirement commenced after July 1, 202 5, but before June 30, 2026, is increased by a prorated 20
amount of two percent (2%), as determined by the Board of Trustees based upon the number of 21
months that a retirement allowance was paid between July 1, 2025, and June 30, 2026. 22
(bbbb) After September 1, 2026, but on or before October 31, 2026, a one-time cost of living 23
supplement payment shall be made to, or on account of, beneficiaries who are living as of 24
September 1, 202 6, and whose retirement commenced on or before September 1, 202 6. The 25
payment shall be one percent (1%) of the beneficiary 's annual retirement allowance payable as 26
of September 1, 202 6, and shall not be prorated for date of retirement commencement. If the 27
beneficiary dies before the payment is made, then the payment shall be payable to the member's 28
legal representative. No beneficiary shall have a vested right to any future supplemental payments 29
under this Article." 30
SECTION 3.15.(b) G.S. 135-65 is amended by adding the following new 31
subsections to read: 32
"(ll) Effective July 1, 202 6, the retirement allowance payable to, or on account of, 33
beneficiaries whose retirement commenced on or before July 1, 2025, is increased by two percent 34
(2%) of the allowance payable on June 1, 2026. Effective July 1, 2026, the retirement allowance 35
payable to, or on account of, beneficiaries whose retirement commenced after July 1, 202 5, but 36
before June 30, 2026, is increased by a prorated amount of t wo percent (2%), as determined by 37
the Board of Trustees based upon the num ber of months that a retirement allowance was paid 38
between July 1, 2025, and June 30, 2026. 39
(mm) After September 1, 2026, but on or before October 31, 2026, a one-time cost-of-living 40
supplement payment shall be made to, or on account of, beneficiaries who are living as of 41
September 1, 202 6, and whose retirement commenced on or before September 1, 202 6. The 42
payment shall be one percent (1%) of the beneficiary 's annual retirement allowance payable as 43
of September 1, 202 6, and shall not be prorated for date of retirement commencement. If the 44
beneficiary dies before the payment is made, then the payment shall be payable to the member's 45
legal representative. No beneficiary shall have a vested right to any future supplemental payments 46
under this Article." 47
SECTION 3.15.(c) G.S. 120-4.22A is amended by adding the following new 48
subsections to read: 49
"(ff) In accordance with subsection (a) of this section, effective July 1, 2026, the retirement 50
allowance payable to, or on account of, beneficiaries whose retirement commenced on or before 51
General Assembly Of North Carolina Session 2025
Page 10 Senate Bill 962-First Edition
January 1, 202 6, is increased by two percent (2%) of the allowance payable on June 1, 202 6. 1
Effective July 1, 2026, the retirement allowance payable to, or on account of, beneficiaries whose 2
retirement commenced after January 1, 2026, but before June 30, 2026, is increased by a prorated 3
amount of two percent (2%), as determined by the Board of Trustees based upon the number of 4
months that a retirement allowance was paid between January 1, 2026, and June 30, 2026. 5
(gg) In accordance with subsection (a) of this section, after September 1, 2026, but on or 6
before October 31, 2026, a one-time cost-of-living supplement payment shall be made to, or on 7
account of, beneficiaries who are living as of September 1, 202 6, and whose retirement 8
commenced on or before September 1, 202 6. The payment shall be one percent (1%) of the 9
beneficiary's annual retirement allowance payable as of September 1, 202 6, and shall not be 10
prorated for date of retirement commencement. If the beneficiary d ies before the payment is 11
made, then the payment shall be payable to the member 's legal representative. No beneficiary 12
shall have a vested right to any future supplemental payments under this Article." 13
14
APPROPRIATION FOR PAY RAISES FOR STATE EMPLOYEES/COMMUNITY 15
COLLEGES/UNIVERSITY OF NORTH CAROLINA AND COST -OF-LIVING 16
INCREASES FOR RETIREES 17
SECTION 3.16. To fund the pay increases and cost -of-living adjustments awarded 18
in this Part, the following funds are appropriated, effective July 1, 2026: 19
(1) There is appropriated from the General Fund to the Reserve for Compensation 20
Increases the sum of seven hundred one million one hundred thousand dollars 21
($701,100,000) in recurring funds for the 2026-2027 fiscal year. 22
(2) There is appropriated from the General Fund to the Reserve for Compensation 23
Increases the sum of five hundred three million five hundred thousand dollars 24
($503,500,000) in nonrecurring funds for the 2026-2027 fiscal year. 25
26
PART IV. CONTINUED RAISES FOR TEACHERS AND STATE EMPLOYEES IN THE 27
EVENT THE CURRENT OP ERATIONS APPROPRIATI ONS ACT DOES NOT 28
BECOME LAW 29
SECTION 4.(a) G.S. 143C-5-4 reads as rewritten: 30
"§ 143C-5-4. Enactment deadline; procedures to be followed when the Current Operations 31
Appropriations Act does not become law prior to the end of certain fiscal years. 32
(a) Enactment Deadline. – The General Assembly shall enact the Current Operations 33
Appropriations Act by June 15 of odd -numbered years and by June 30 of even -numbered years 34
in which a Current Operations Appropriations Act is enacted. 35
(b) Procedure for Budget Continuation. – If a fiscal year begins for which no Current 36
Operations Appropriations Act providing for current operations of State government during that 37
fiscal year has become law, then the following procedures shall be followed and the following 38
limitations shall apply: 39
(1) Authority. – Unless otherwise provided by law, the Director of the Budget 40
may continue to allocate funds from all funds for expenditure by State 41
departments, institutions, and agencies at a level not to exceed the level of 42
those funds in the recurring certified budget for the prior fiscal year. If the 43
Director of the Budget finds that projected revenues for the fiscal year will not 44
support expenditures at the level of recurring expenditures for the prior fiscal 45
year, the Director of the Budget shall allot funds at a lower level. In making 46
these allocations, the Director of the Budget shall ensure the prompt payment 47
of the principal and interest on bonds and notes of the State according to their 48
terms. Except as otherwise provided by this section, the limitations and 49
directions on the expenditure of funds for the prior fiscal biennium shall 50
remain in effect. Except for funds appropriated for (i) capital improvement 51
General Assembly Of North Carolina Session 2025
Senate Bill 962-First Edition Page 11
projects or (ii) the implementation of information technology projects, the 1
Director of the Budget shall not allocate funds for items funded with 2
nonrecurring funds during the prior fiscal year. 3
(2) Appropriation of funds necessary to implement. – There is appropriated from 4
the appropriate State funds, cash balances, federal receipts, and departmental 5
receipts sums sufficient to implement the authority described in this 6
subsection for the applicable fiscal year. 7
(3) Relation to Current Operations Appropriations Act. – The appropriations and 8
the authorizations to allocate and spend funds which are set out in this 9
subsection shall remain in effect until the Current Operations Appropriations 10
Act for the applicable fiscal year becomes law, at which time that act shall 11
become effective and shall govern appropriations and expenditures. When the 12
Current Operations Appropriations Act for that fiscal year becomes law, the 13
Director of the Budget shall adjust allotments to give effect to that act from 14
July 1 of the fiscal year. 15
… 16
(5) State employee salaries. – The salary schedules and specific salaries 17
established for the prior fiscal year and in effect on June 30 of the prior fiscal 18
year for offices and positions shall remain in effect until the Current 19
Operations Appropriations Act for the current fiscal ye ar becomes law. State 20
employees subject to G.S. 7A-102(c), 7A -171.1, 143B -1714, or any other 21
statutory salary schedule, shall not move up on salary schedules or receive 22
automatic increases, including automatic step increases, until authorized by 23
the Genera l Assembly. State employees, including those exempt from the 24
classification and compensation rules established by the State Human 25
Resources Commission, shall not receive any automatic step increases, 26
annual, performance, merit, bonuses, or other increments until authorized by 27
the General Assembly. The State employee salary schedules, and any other 28
salary grade or salary range for State employees established pursuant to State 29
law that is in effect on June 30 of the prior fiscal year shall remain in effect 30
with an automatic statutory increase of five percent (5%) to each salary 31
schedule, salary grade, and salary range until the Current Operations 32
Appropriations Act for the current fiscal year becomes law. 33
(6) School Employee Salaries. – Public school employees paid on the teacher 34
salary schedule, the school-based administrator salary schedule, or any other 35
salary schedule established by State law shall not move up on salary schedules 36
or receive automatic step increases until authorized by the General 37
Assembly.The teacher salary schedule, the principal salary schedule, and any 38
other salary grade or salary range for public school employees established 39
pursuant to State law that is in effect on June 30 of the prior fiscal year shall 40
remain in effect with an automatic statutory increase of five percent (5%) to 41
each salary schedule, salary grade, and salary range until the Current 42
Operations Appropriations Act for the current fiscal year becomes law. 43
…." 44
SECTION 4.(b) This section applies beginning with the 2027-2028 fiscal year. 45
46
PART V. EFFECTIVE DATE 47
SECTION 5. Except as otherwise provided, this act is effective when it becomes 48
law. 49