The North Carolina Senate tentatively passed a $21.735 billion final state budget Tuesday that includes a responsible 3.1 percent spending increase, cuts taxes, invests hundreds of millions of additional dollars in public education and other core priorities and shores up the state’s rainy day and repair and renovation funds by $600 million.

“There’s no question this year’s budget process was long and difficult, but it was important to get the final product right,” said Senate Leader Phil Berger (R-Rockingham.) “This budget benefits all North Carolinians by providing families and small businesses hundreds of millions of dollars in tax relief, and by making a generous investment in public education, transportation and other core priorities.”

Highlights of the final budget agreement include:

A comprehensive tax reform package that reduces the tax burden on North Carolina families and small businesses by close to $400 million over the next two years;

• An increase in funding for public education by more than $530 million in the first year alone;
• Education reforms to reduce class sizes and ensure students receive the tools they need to succeed;
• A boost in early-career teacher pay to from $33,000 to $35,000 per year and experienced-based step increases to teachers, assistant principals, principals, State Highway Patrol troopers, clerks and magistrates. All public school teachers and state employees will receive a $750 bonus;
• Funding for all teacher assistant positions supported in last year’s budget, with a safeguard that school systems actually use those funds for TAs so their jobs cannot be eliminated to pay for administrative positions and other spending;
• An additional $705 million over two years for transportation needs, made possible in part by ending a $216 million transfer from the Highway Fund to the General Fund -- ensuring that money is finally spent on building and maintaining safe roads and bridges;
• An investment of $225 million over two years to begin the process of restructuring and reforming the state's chronically troubled Medicaid program;
• New local tax revenue to support education and economic development in counties with insufficient local sales tax dollars;
• Increased funding for essential court system needs – like interpreters, expert witnesses and juror fees – and operations at the Administrative Office of the Courts.