AN ACT ESTABLISHING THE 2025 TEACHERs' and First responders' pay INCREASE PROGRAM to provide a ten percent raise to teachers and first responders.

The General Assembly of North Carolina enacts:

PART I. FIRST RESPONDER PAY INCREASE PROGRAM

SECTION 1.1.  The following definitions apply in this Part:

(1)        Base salary. – The regular, recurring annual compensation of a first responder, excluding overtime pay, shift differentials, longevity pay, or any other supplemental forms of compensation.

(2)        Employing authority. – A State agency or a city, county, or other local political subdivision of this State that employs first responders.

(3)        First responder. – A public employee whose primary duties involve the protection of life, property, or public safety during emergency situations, including specifically:

a.         Law enforcement officers.

b.         Firefighters.

c.         Emergency medical services personnel.

d.         Public safety telecommunicators or dispatchers.

e.         Nurses employed by public hospitals, health departments, correctional facilities, or other government healthcare facilities.

(4)        Pay increase. – A permanent increase to the base salary of a first responder at the rate of ten percent (10%) of the first responder's current base salary.

(5)        Public employee. – A person employed by an employing authority.

(6)        Years of service. – The total number of years that a first responder has been employed in a qualifying position by any employing authority within the State.

SECTION 1.2.  Appropriation for First Responders' Pay Increase. – There is appropriated from the General Fund to the Reserve for First Responder Pay Increases the sum of seven hundred million dollars ($700,000,000) in each year of the 2025‑2027 fiscal biennium to provide a permanent ten percent (10%) pay increase to eligible first responders as defined in this act. The Department of Public Safety and the Department of Health and Human Services shall distribute these funds to employing authorities based on the total cost of implementing a ten percent (10%) pay increase for all eligible first responders employed by each authority. Funds distributed under this section shall be used exclusively for providing the mandated pay increase to eligible first responders and may not be used for administrative costs or other purposes. The pay increase provided pursuant to this section shall be added to the first responder's base salary, effective July 1, 2025, and included in the first responder's base salary for purposes of calculating future salary increases. This pay is subject to retirement contributions as provided by the applicable retirement systems.

SECTION 1.3.  Administration. – The Office of State Budget and Management shall coordinate with the Department of Public Safety and the Department of Health and Human Services to distribute funds to employing authorities by no later than August 15 of each fiscal year within the 2025‑2027 biennium. Employing authorities shall implement the pay increase for eligible first responders effective July 1 of each fiscal year. To be eligible for the pay increase, a first responder must be employed by an employing authority on July 1 of the fiscal year in which the pay increase takes effect. First responders who work less than full time shall receive a prorated pay increase based on the percentage of full‑time equivalent hours worked. The Office of State Budget and Management shall develop simplified procedures for the allocation and distribution of pay increase funds and shall provide necessary guidance to the Department of Public Safety and employing authorities. Employing authorities shall certify to the Department of Public Safety the total cost of implementing the pay increase for eligible first responders by August 1 of each fiscal year. By January 15 of each fiscal year, employing authorities shall submit a verification that the pay increase has been implemented for all eligible first responders. Any funds not expended for the purposes specified in this section by the end of each respective fiscal year shall revert to the General Fund.

PART II. TEACHERS' PAY INCREASE PROGRAM

SECTION 2.1.  Definition. – For purposes of this Part, the term teacher means a classroom teacher, instructional support personnel, principal, or assistant principal employed by a local school administrative unit, charter school, or regional school.

SECTION 2.2.  Appropriation. – There is appropriated from the General Fund to the Reserve for Teachers' Pay Increases the sum of nine hundred million dollars ($900,000,000) in each year of the 2025‑2027 fiscal biennium to provide a permanent ten percent (10%) pay increase to eligible teachers in the public schools. The Department of Public Instruction shall distribute these funds based on the total cost of implementing a ten percent (10%) pay increase for all eligible teachers employed by each entity. Funds distributed under this section shall be used exclusively for providing the mandated pay increase to eligible teachers and may not be used for administrative costs or other purposes. The pay increase provided pursuant to this section shall be added to the teacher's base salary, effective July 1, 2025, included in the teacher's base salary for purposes of calculating future salary increases, and is subject to retirement contributions as provided by applicable retirement systems. This pay is subject to all applicable federal and State withholding taxes.

SECTION 2.3.  Administration. – The State Board of Education and the Department of Public Instruction shall establish procedures and guidelines for the administration of the teacher pay increase program consistent with this Part, in coordination with the Office of State Budget and Management. The Department of Public Instruction shall distribute these funds to local school administrative units, charter schools, and regional schools no later than August 15 of each fiscal year within the 2025‑2027 biennium. To be eligible for the pay increase, a teacher must be employed by a local school administrative unit, charter school, or regional school on July 1 of the fiscal year in which the pay increase takes effect. Teachers who work less than full time shall receive a prorated pay increase based on the percentage of full‑time equivalent hours worked. Local school administrative units, charter schools, and regional schools shall certify to the Department of Public Instruction the total cost of implementing the pay increase for eligible teachers by August 1 of each fiscal year. By January 15 of each fiscal year, local school administrative units, charter schools, and regional schools shall submit a verification that the pay increase has been implemented for all eligible teachers. Any funds not expended for the purposes specified in this section by the end of each respective fiscal year shall revert to the General Fund.

PART III. STATE BUDGET ACT

SECTION 3.1.  State Budget Act Applies. – The provisions of this act are subject to compliance with Chapter 143C of the General Statutes. If there is a conflict between this act and the State Budget Act (SBA), the provisions of the SBA shall control.

PART IV. EFFECTIVE DATE

SECTION 4.1.  Effective Date. – This act becomes effective July 1, 2025.