- A top state House Education Committee leader says teacher pay increases could be a top priority in the '26 legislative session.

And Governor Josh Stein warns the Council of State about possible upcoming income tax rate cuts.

This is State Lines.

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♪ - Welcome back to State Lines.

I'm Kelly McCullen.

Joining me today, Dawn Vaughan of the News and Observer.

Hi, Dawn.

- Hello.

- And to her right, Bruce Thompson of Parker Poe.

Donald Bryson of the John Locke Foundation and Carolina Journal.

You're pulling double duties with that title.

Colin Campbell, a jack of all trades with WUNC News.

He's a writer, a blogger.

- Podcaster, everything.

- Podcaster, blogger, I'm his anchor.

That means he knows everything.

- Exactly.

- I mean, so let's start with State House Republican budget writers telling reporters this week teacher pay raises will be a priority of the 2026 short legislative session.

It's Randolph County Republican Representative Brian Briggs saying that teacher raises should be meaningful.

He chairs the House Education Committee.

Governor Josh Stein's latest proposal for a budget of sorts would boost average teacher pay by about 6%, pay higher salaries to teachers who've earned their master's degree and ensure more experienced teachers are paid higher salaries.

Dawn, we've heard that record's played one time before if we head to the spring.

So take it from here.

- Here we are again.

- Anything new from a rather lingering topic?

- Well, we're closer to the start of the short session, April 21st.

So that is new, that we're, instead of rehashing the same thing for month after month with the budget stalemate, we're actually coming to the date when the 120 lawmakers are going to be there, in the House anyway, and push for this.

Now, again, the same thing we've talked about previous times on the show.

It's House versus Senate and the debate over teacher raises.

Democratic Governor Josh Stein is pushing for teacher raises.

He told me this past week he's also going to make another budget push that week that the lawmakers are back, proposal for something with these raises.

But we'll see if what the House wants to do, what the governor wants to do, is what the Senate wants to do.

- I must say, Bruce, because the House makes teacher pay and compensation a priority does not mean the Senate Republicans will go along, but at least it's a marker as we head towards the session in, what, two weeks?

Yeah, and I think you're starting to hear maybe a different message coming from the Senate than what we heard a year ago in budget talks.

I think they want to see a budget passed.

I think that both the House and the Senate Republicans are going to caucus next week and will probably get a good indication about where it's headed.

But I think there's a motivation to get a budget, because, frankly, it's an easy way to criticize the current legislative leadership, just for people to say, "We're the only state that doesn't have a budget," which doesn't really tell the whole story, but they're feeling that negative impact.

- And it's an election year.

- Right.

And we're past the primary.

They don't have to worry about other Republicans not liking their budget and coming out of a primary.

Now they have to worry about the general electorate in November looking at their current legislative representatives and saying, "Hey, these guys aren't doing anything.

Let's go with the other party."

- Right.

And remember, last time we had two budgets out there, the governor decided he would weigh in on one, that he liked that House budget.

That really poisoned the punch, I think, for a compromise.

- It probably did.

- Should Josh Stein just take a look and nod quietly at either side of a budget that comes out of this spring?

- Well, maybe.

I mean, the governor's voice matters a bit, right?

He's the one who has the pen at the end of the day, and Republicans cannot or should not politically go into November without a budget.

And so they're going to have to talk to him.

It's interesting that he's come out and started talking about this 6% number, because it's actually lower than the budget that he was really excited about, or the teacher pay proposal he was excited about in early 2025 from the House, which I think was at 10%.

6% would actually lower that.

I still think it would be considered by anybody a substantial pay raise at this point.

I would like to have a 6% raise myself.

But I think this is very, here's a $5 word for you, Sisyphean, because we keep pushing this rock up the hill and it keeps falling back down, and we have this conversation over and over again.

We need to really refine and talk about how we put the teacher pay conversation back at the local level rather than the electeds at the General Assembly talking about it.

- How do you do that in reality with the way our government structures are set up as of 2026?

- Well, it's going to take a lot of work, but you're going to really have to blow up the teacher pay schedule and leave it to the locals to figure that out, because right now the teacher pay schedule increases teacher pay based off of how many years they've worked and credentials.

So, one, have those years been good years?

Are they good teachers or not over those five, 10, 15 years?

We don't know.

And the other thing is, if I'm teaching high school chemistry but my master's degree is in history, what has that master's degree given me and why should we be paid more?

But if you're a high school chemistry teacher and you have a chemistry master's degree, you probably should be paid more.

- Colin, in the bill writing passage process, comments like Representative Briggs, that's the cheapest thing you can do is talk about something.

Actually paying teachers 6% more actually costs money.

The reality is going to be what this spring when it comes to compensating teachers, but other state employees or university employees like myself, when inflation's at 3%, 4%, take us through this process.

Will the public be happy with a teacher pay raise and that be it?

- I think you almost have to do both.

That's usually what they end up doing.

Ultimately, the teachers end up faring better, though oftentimes, in the budgets we've seen the last few years, the teachers typically end up with a bigger pay increase than the average rank and file state employee.

This time around, if you look back at what the House proposed last year, they were looking at more of a 2% raise, which is pretty low.

The Senate was less than that, pairing a smaller raise with some kind of bonus.

In the tight financial times the state is in, we're looking at revenue potentially going stagnant.

We'll talk about that later in the show.

That gives them a lot less wiggle room to work with, particularly with the income tax cuts that are scheduled to come on board soon.

We're not gonna see huge raises this year.

- Also, House Republicans proposed some higher raises than Democratic Governor Josh Stein.

I think that's important to note, more with the state employees than teachers, but a lot of the priorities are the same.

I do feel like that pushing something to the local level opens the door to a conversation about local governments wanting to-- - Property taxes again, which we've talked about ad nauseum on the show lately.

- My show's getting hijacked here.

Let's talk about Governor Josh Stein.

He warned the Council of State this week.

They were in Halifax doing a special Council of State meeting there, but he was issuing a warning that additional state income tax reductions, in his opinion, will cause a budget deficit and crisis.

State law right now requires personal income tax rates drop if state revenues meet collections goals.

Well, it does appear our state will achieve those goals, and income tax rates will drop from 3.99% down to 3.49% beginning in 2027.

State analysts predict a $370 million increase in tax collections this year.

Colin, this state is making money.

Blame Phil Berger all you want about tax policy.

It's a 15-year streak of lowering taxes, higher revenue.

That's a fact.

But now we're worried about a deficit that has never happened.

Is it now time for, is judgment coming on this?

- I think it probably is.

I mean, one of the things that Berger has pointed to in some of his skepticism towards these numbers is, well, for the last however many years, we've been talking about a possible deficit or decrease five or seven years out, but now we're talking about one in the fiscal year that starts in July.

Now that's not gonna necessarily come home to roost immediately, because the total amount of revenue the state pulls in is gonna be lower, but it's still higher than what we're spending by a pretty decent amount.

But in a state that's growing as fast as it has, with the inflation that we've seen all across the country, you would expect that number to go up over time to keep the same level of services, if not expand it.

And if it's going down, then we're talking about what the governor pointed out this week, budget cuts could be looming in the next year or two, not further down the road.

- Donald, this past cycle, though, the House leadership, who are Republican, have expressed some concern that further tax cuts with a shrinking economy would cause a state budget deficit.

- Well, remember, this is the same House leadership and House caucus that is trying to do higher teacher pay, right?

And so they're gonna have recurring costs over this.

This isn't a one-time bump, this is a permanent bump in teacher pay.

And so they wanna make sure that revenue is coming in.

But from May of last year 'til February of this year, the forecast changed by $1.2 billion.

That is not a small change in the revenue.

The revenue forecast has been wrong in 14 of the last 15 years.

They err on the side of being very conservative on that.

But the problem is, is it's very hard to make it useful for legislators to figure out how to budget for that.

And so we're gonna have to figure out how to get the revenue forecast right.

But if we're bringing in, if the revenue trigger is that we raise enough money so that the trigger can go down, well, then it sounds like we're probably okay to have some tax cuts.

- Bruce, to that point, the state is in a surplus, and we're able to do that as a state with lower income taxes over 15 years.

And Stein, seems like waiting for that "I told you so" moment.

And it seems to be getting closer, either Mr.

Booker will be validated or not.

- Yeah, it's getting closer, but the interesting thing is, I think with the revenue projections that just came out, it allows the current legislature to kick it down the road again, to say these are issues we're going to have to address when they happen.

Because right now, the motivation is getting a budget passed so you can remove-- - Well, there was supposed to have been a deficit this year four or five years ago.

So they've been wrong repetitively.

We were supposed to have been in the deficits by now, and it's not happened.

- There was a slow session.

I mean, everyone's been watching for the recession that didn't end up coming for a while.

So that was part of it.

But you don't want them to predict that we're gonna have all this money, and then they spend all this money, and then that doesn't come in.

But the alarms I've heard more of isn't as much the trigger for this coming year, although people are concerned about that, but the one after that.

But because this hasn't changed, if there's no budget until after the end of this fiscal year, then this is gonna happen, and they can talk about the following year after that.

I don't know if we'll see a state budget by June 30th.

- Bruce, one thing I've found as an observer of this whole state process is it's been GOP, that's conservative government budget writing has created lower taxes, higher income.

However, Democrats in the governor's office have benefited greatly from what people have accused Phil Berger of doing with state tax policy.

So, does either party wanna mess with the way it's structured right now too much?

- You know, that's a really good-- - That's a good Southern term.

- Yeah, don't go messing with a good thing.

I think you're right that we're in a situation where Democrats have been critical of some of the tax reductions, but those are some of the same things that have made us one of the best places to do business.

And I always find it interesting to look at whenever we get a ranking like that, there's no shortage of people raising their hand to say, "I was responsible for helping that."

- And the governor said, "I'm not asking for a tax increase.

I'm not worried about tax increase.

Hold taxes where they are."

- Yeah, he wants to hold taxes where they are, but it's hard to argue that with taxpayers when they're seeing not break-evens, we're having revenue surpluses, which means if the government's taking in more money than it probably needs.

- Well, this reminds me of in 2019, you know, Berger and former Speaker Moore proposed that they would give, you know, a taxpayer rebate with the surplus and they didn't do it.

- Yeah, I mean, the bottom line in the short term, the state government is sitting on several billion dollars of money that's just not spent, not allocated.

- It's north of 12 billion at this point, yeah.

- But I heard folks back, you weren't here for that day, back about 2006, 2007 when we had billions of dollars and then nobody saw 2008 coming.

- Yeah, we've been lucky the last few years, aside from that sort of blip during COVID, we haven't had a full-on recession probably since 2008, so what that could bring if we were to have one is certainly an open question.

- If you want to see a state spend some money and have a recession like the Great Recession, it was nothing like it since 1932 or '29 in that era.

Well, the North Carolina Association of Educators is calling on teachers to call out of work on May 1st.

It's the organization wanting its teachers to protest education funding in Raleigh.

It also happens to be a teacher workday for Wake County Schools, so if you're a Raleigh teacher, the kids won't be in class anyway.

The NCAE hasn't organized an official Raleigh protest, Bruce, in seven years.

It would not endorse that handful of teachers who came to Raleigh and protested earlier in 2026.

They seem to protest Republicans and when times are hard for Democrats, when they were running, they didn't have a problem.

How does this work with the NCAE and teacher advocacy?

'Cause I can see a partisan.

- Yeah, I would disagree with that last statement.

- All right, go ahead.

- I think back when Democrats were in charge, teachers did not hesitate to show up on Jones Street and protest for higher pay and things like that.

They didn't do it-- - Walking off the job.

- They didn't do it on the same level that you see happening right now, but I don't think it's always been a strictly partisan issue for them.

I think it's easy to call that now because Republicans are in control.

Now, here's the issue, and my friend Donald has already shown me this through his Twitter account where he's gonna go with his comment.

Is this walk-off illegal?

Because the statutes in North Carolina do say public employees cannot strike, so is this a strike?

Maybe by dictionary definition, I don't know if it is by legal definition.

I could certainly say I doubt you would find a district attorney in North Carolina who would file charges against a teacher for walking off the job for one day.

- And presumably they have to use a sick day, right?

- Right.

- Donald, a strike, a strike.

- Hey, look, I didn't write the law.

Democrats actually wrote the law back in 1991 where they defined the strike under state law and it's a cessation of work or a slowing down of work.

Now the question is, I don't know where all has a teacher workday on Monday or on that day.

Wake County does, but if teacher workdays aren't really a workday anyway, then why do we have them?

- Well, they probably are a workday, and so any stoppage of work, there's no amount of time in the legal definition and people who participate that are guilty of a class one misdemeanor in North Carolina.

- It's a field trip, Donald, a field trip to Raleigh to see the legislature.

- But where are the childrens?

There are no children along to teach them anything.

- Just can't knock him off the perch, can you, Colin?

But you know, NCAE, I will say this, they have been loud at Republicans, I have seen that.

They were not so loud at Democrats 15 years ago when Democrats were in charge, but yes, to Bruce's point, they still made noise.

- Yeah, absolutely, and I think that's, you have two sort of different strategies.

You have State Employees Association of North Carolina that represents all state employees, and their lobbying strategy really seems to be to kind of work both sides of the aisle and come across more as non-partisan and try to get their agenda enacted that way.

North Carolina Association of Educators tends to align itself with more left-leaning groups, and so Republicans, I think, are perhaps less amenable to that, but at the same time, having a bunch of people, teachers, filling the Halifax Mall, taking a day off work, really does send a message and is gonna garner a lot of media attention if that happens.

- It is, I mean, it's on a Friday, though.

I feel like it's been like different days of the week, 'cause I'm covering it when it was much larger, and I remember it was on a session day, but there's very rarely any sort of voting session on Fridays, unless it's maybe the budget bill or something like this.

I mean, even just this past week at the legislature, there were different advocacy lobbying groups there, but not really any lawmakers, like, you know, just a committee here and there and not a lot of people, so it is what the attention that they're going to get, media attention that they'll put out from others or their supporters, but the lawmakers themselves are pretty unlikely to be there.

Most lawmakers go back to their districts on Thursday afternoon.

- Well, it's because it's May 1st is an important day, right?

- I mean, that's the date, yeah.

- It's the fact that it is May 1st, International Workers' Day and all that.

This is a left-leaning holiday.

That is what it is about, and the NCAE has lined itself with left-leaning causes.

- I thought we were all for workers, Donald.

- I'm all for workers.

I'm not for communists.

- Gentlemen, do you believe a Republican, say a Republican lawmaker looks out the office window and they see them down there, would they be welcome to go down there and engage in good faith with protesters, even if they're schoolteachers, or is this going to be signs in your face and the t-shirts?

- I mean, have we gotten too far for engagement?

- But I think on the Don's point that you're in a situation now where a mass protest or some kind of demonstration, the audience is not going and having a conversation with the legislature.

Y'all are the audience.

They want it reported out.

They want it in the election year to see the average voter saying this is something that's important to me.

- And this is something people may have forgotten about with the fact that no budget is hard to make into a news story at the top because nothing's really happening, but we're now approaching almost the end of the school year and teachers have not gotten the raises that they would normally expect to get in August, September, and schools, what, a month or two away from the gap?

- It's about raising a fair criticism.

- I mean, I think the audience is other teachers.

It's not, I mean, the people that go, it's NCAE is organizing it.

Maybe their members are the ones that are there, but there's also just random school employees and other supporters that have gone when I've interviewed people that have done this.

So it's, depending on the crowd that shows up, it's, is this important enough to everybody to come make this public, you know, plea demand for, you know, raises and other stuff.

- And if it's about PR, kudos, it works because we talked about it today.

Gubernatorial task forces that focuses on cannabis and hemp policies in North Carolina is recommending cannabis legalization for adults.

It happened this week.

It's called the North Carolina Council on Cannabis Use.

It is a bipartisan group.

It says North Carolinians, us, we are already spending $3 billion a year on illegal marijuana and North Carolina is now one of 10 remaining US states that hasn't legalized an adult cannabis market of some sort.

Opponents say we have a need for higher mental health funding, have big issues in the healthcare space.

Legalizing cannabis does not help those efforts.

Legal cannabis could bring a few hundred million dollars a year.

- And new revenue, Colin.

So are we going to, we going to lighten up on the marijuana and the cannabis and the hemp products, even though the feds are cracking down on the definition?

- Yeah, it'll be interesting to see.

I mean, this is interesting because this is a committee set up by the governor that's now saying we should go full on recreational marijuana legalization.

Over in the legislature, I think you're seeing a different debate playing out.

You've got the Senate Republicans who are in favor of medical marijuana.

House Republicans have been very against that proposal for several years now.

You've got this issue with these unregulated hemp products, which was discussed in the report we saw this week, that basically you can go out, buy some totally unregulated products that will get you just as high as smoking a joint and buy it without showing ID or making sure the product is what it claims it is.

And so I think there's some sort of compromise to be had in here of regulating those products at the same time you, on some level, legalize regular marijuana for people with some kind of medical condition.

I would be surprised if we went full recreational in this state.

But Virginia's doing it next year, so that may put some pressure on us.

- And North Carolinians will be crossing that state line.

Those who want those kinds of products.

- Oh yeah, I mean, I was joking this morning that, you know, we go to South Carolina for fireworks, you see all the stands at the border, you may see pot shops lining the Virginia border with North Carolina in a year or two.

- Donald, talk about one whale of a farm bill if they wanted to go forward with this thing.

And that's always the most popular thing.

Republicans can't line up fast enough behind those, except for one or two guys in the House.

- It would be a substantial farm bill.

And while we're sort of thinking and talking out loud, it would probably sort of change some opportunities for the hemp industry outside of any sort of THC product.

I'm not 100% sure what to make of this.

I don't think anybody who follows North Carolina politics is stunned that a Stein-led commission suddenly said, "Oh, we should probably legalize marijuana."

- There are Republicans on that.

- Fair enough, fair enough.

But nobody's surprised.

But at the same time, you know, I think that adults can be able to make adult decisions.

But when we're talking about legalization of marijuana, we're not talking about just legalization, we're talking about normalization, we're talking about commercialization.

And I'm cautious about figuring out how we can get tax revenue off of an industry that is technically underground.

Like, how do you economically model off of that?

So aside from the legalization and commercialization standpoint, I don't think people should be trying to figure out that as a revenue stream for the state, because I don't think it can actually be modeled.

- Bruce, but to the point of the opponents of this, there are mental health...headline grabbing out of Charlotte with DeCarlos Brown.

I mean, he's not...people are out there that need mental health.

People say marijuana, adding a vice doesn't help society.

Is that fair right now, or should we be looking at the money?

- If...I don't...you've got to look at everything.

And one thing we've got to do in this debate is try to remove some of the emotion out of it, because we saw at the Joint Legislative Oversight Committee on Healthcare this week a couple of members, even though that was not on their agenda, they wanted to make public statements about it.

I don't think that legalizing medical or recreational is ever going to increase the number of people who are using in North Carolina, because that's already a substantial number.

And especially pretty soon when you can drive over to Emporia, Virginia, and go to a dispensary and load up for the week.

The criticisms that we have about cannabis, about things being unregulated, products being dangerous, I think if you regulate that market, then you start to attack some of those issues.

And frankly, I think it's the only way you're going to attack it, because otherwise you're still going to have all these products we've been talking about showing up at your neighborhood gas station.

- I think there's a fair point there.

And I was walking with my nine-year-old daughter in downtown Raleigh a couple of weeks ago, and she kept asking me why she kept smelling skunks.

And I was like, "Sweetie, no."

- A lot of skunks in North Carolina.

- When you go to D.C., I was like, "Oh, that's right, it's legal here."

When you're walking down the street and smell it.

This reminds me of the sports betting conversation, and the advocate saying, "This is already happening in the state.

Why can't the state make some money off of it?"

And with the fact of Virginia already moving forward on this.

- Casinos, too.

That Danville Casino was what-- - But also, North Carolina can learn some lessons from what Virginia does.

- Is the council's recommendation, was it meant to be provocative?

Do you think that council believes that Republicans in the legislature would take their recommendation seriously?

- I think it wants to drive, it's part of driving the conversation and keeping the attention on it.

And if Republican Senator Bill Rabin, medical marijuana has been his issue for years now, if this is something that he's gonna push this session, or if Senate Leader Berger is gonna help it get across the finish line, we'll see.

But maybe just that first.

- Before we get too conservative versus liberal, a $3 billion industry is underground right now.

Gotta be a lot of Republican votes there enjoying some cannabis products, either legally or illegally.

- I would imagine.

- All right, Department of Homeland Security Secretary Markwayne Mullen toured Western North Carolina this week.

The new secretary recently ended former Secretary Kristi Noem's policy of personally reviewing expenditures over $100,000.

Our state's leaders said that Noem threshold greatly delayed North Carolina receiving federal funding for Hurricane Helene recovery.

Western North Carolina leaders also added to the money, but say they need to cut red tape.

Let's get some of these projects underway.

All right, Markwayne Mullin, Kristi Noem, is the new boss the same as the old one?

Is government just going to government?

- Hopefully the new boss is not the same as the old one.

I wanna give Governor Stein some credit here.

When he came in and created Grow NC, immediately I think it might've been his first, or one of the first five executive orders he had.

The point was to let's cut through the red tape, let's do this fast, let's get people back at homes as quickly as possible.

Much, much better than what we saw with the Matthew and Florence recoveries from several years ago.

And the point of the Stein administration was to go fast.

Now we're still seeing if he's following through with that, but that's been the message that the governor has given.

In steps Kristi Noem, who slowed everything down.

I need to see everything, I need to do everything.

And either professionals work for you or they don't.

This is a $55 billion disaster.

It's gonna cost money, Mr.

Secretary.

And so what we hope is that Markwayne Mullin will speed through this and hopefully he sees that more this far out from that hurricane, people still need some speed from the federal government.

- Bruce, I'm gonna got a minute to go around the table.

I want to talk about the new boss over Western North Carolina recovery.

- We'll see.

I mean, I can't believe we're still debating on that level of just getting the money out.

I mean, the storm didn't happen yesterday.

It's been a long time.

You know, I also want to give credit to the Stein administration and people at the legislature for keeping the focus there, because this is an issue where Republicans and Democrats have to get together and demand that Washington take care of the problem.

- 15 seconds, Dawn.

- You know, I think what happened before under Noem was an example of micromanagement and making government bigger and maybe removing a layer that bogged things down.

Will finally finish the job or speed things along a little bit?

- Speed things along, Collin, last word.

- Yeah, I mean, Noem tried to DOGE hurricane relief.

That's maybe not something you want to do a DOGE treatment on.

And I think their federal government may be learning its lesson from that.

- And it was less efficient.

- Give the new secretary a chance is what I'm hearing.

Thank you so much, panel.

Thank you for watching.

Email me at StateLines@pbsnc.org.

We'll see you next time.

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