GOP leaders in the state House and Senate announced Tuesday afternoon that they've finally reached a deal for a state budget for the fiscal year that began last July.
The agreement calls for most state employees to receive a raise of about 3%, while teachers would see raises that would average 8%. Employees would also receive bonuses ranging from $1,000 to $1,750, based on salary level and experience. The raises would not be retroactive to the beginning of the fiscal year.
Budget negotiations had been stalled for months, largely over disagreements between House and Senate Republicans about scheduled income tax cuts. House Speaker Destin Hall wanted to delay scheduled cuts because of projections that they could result in declining state revenues, while Senate leader Phil Berger pushed to keep the scheduled cuts unchanged.
In the end, the two leaders agreed to repeal the current triggers and replace them with a delayed tax cut plan, dropping the personal income tax rate from 3.99% to 3.49% for the next two years, reducing it further in subsequent years to eventually reach 2.99% in 2033. Plans to lower and phase out the corporate income tax rate would be unchanged.
The legislature hasn't passed a comprehensive two-year budget bill since 2023, leaving much of state government operating at 2023 spending levels with some minor spending legislation passed since that year.
Budget writers from both chambers are still working out the details of the full budget deal — a vote could be weeks away — but Tuesday's agreement marks major progress.
Tuesday's announcement came together quickly, with Hall's office posting on the social media site X about a budget deal at 3 p.m. The press conference began about an hour later.
This is a developing story. Check back for more updates.
