2026 North Carolina Education Budget: New Mandates, Pay Increases, & AI
After months of negotiations, the North Carolina General Assembly passed the state budget on July 2, 2026, and Governor Josh Stein signed the $34.4 billion bill into law on July 7. The agreement brings an end to a prolonged budget impasse, giving public schools the funding clarity they’ve been waiting for as they plan for the 2026–2027 school year.
Although the fiscal year officially began on July 1, the newly enacted budget takes effect immediately, introducing changes that will impact school operations, funding, and compliance requirements. While the budget includes positive investments in educator pay, it also brings new responsibilities for school and district leaders. Understanding these updates now will help ensure your team is prepared to plan, budget, and implement changes throughout the coming school year.
Key Changes in the 2026–2027 North Carolina Budget
The 2026–2027 state budget introduces several policy changes that will directly impact school and district planning. Here are the most significant changes for North Carolina public schools:
Math Requirements for Low-Performing Schools
Low-performing schools must now provide 60 minutes of daily, on- or above-grade-level math instruction for students in grades K–8. Schools are also required to administer a math screening assessment at least three times each year and develop individualized Mathematics Success Plans for students identified as having significant learning gaps.
Expanded Literacy Initiatives
The state is expanding the use of the DIBELS reading diagnostic to include students in grades 4 and 5. In addition, middle school teachers will receive Science of Reading professional development supported by $13.8 million in state funding.
Statewide AI Investments
North Carolina is investing $5 million annually in classroom AI tools, including $2.5 million each for Khanmigo and MagicSchool for at least one year. The State Board of Education has also been directed to develop K–12 AI literacy standards.
Teacher Compensation
The budget provides educators with an average 8% salary increase, raising the state-funded starting teacher salary to $48,000. Eligible educators will also receive experience-based one-time bonuses.
Expansion of Advanced Teaching Roles
Funding for the Advanced Teaching Roles (ATR) program increases from approximately $10 million to $40.9 million, expanding opportunities for experienced teachers to serve in formal mentoring and leadership roles with salary supplements of up to $10,000.
Principal Compensation
Principals will receive a 3% salary increase and a $1,000 bonus. A proposed change to school-growth compensation has been delayed until January 2027, allowing additional time before the new supplemental pay structure takes effect.
Teacher Licensure Flexibility
Traditional K–6 elementary teaching licenses will now extend through grades 7 and 8, giving districts greater flexibility when staffing middle school classrooms.
Statewide ERP Planning
The Department of Public Instruction (DPI) must submit a plan by November 1, 2026, outlining the transition to a single statewide enterprise resource planning (ERP) platform under a statewide contract.
Foundational Math and Literacy Mandates
The 2026–2027 budget places a strong emphasis on improving student outcomes in mathematics and literacy, particularly in low-performing schools. These new requirements increase expectations for screening, intervention, and progress monitoring while providing additional state funding to support implementation.
New Math Requirements
Under the budget’s Foundational Mathematics Instruction and High-Quality Instructional Materials initiative, low-performing schools must provide at least 60 minutes of daily, on- or above-grade-level math instruction for all students in grades K–8.
To identify learning gaps early, these schools must also administer a mathematics screening assessment to every K–8 student at least three times per school year, supported by $6 million in state funding. Students identified as having significant difficulty in mathematics must receive an individualized Mathematics Success Plan, and schools are required to notify parents of the intervention plan.
The budget also includes broader statewide investments in mathematics instruction. Lawmakers allocated $10 million for the North Carolina Collaboratory to adapt a high-quality K–8 mathematics curriculum for North Carolina schools and an additional $5 million to support math intervention pilot programs.
Expanded Literacy Requirements
The state’s literacy initiatives continue to expand with additional screening and professional learning opportunities. The budget invests $1.4 million to extend the DIBELS reading diagnostic to students in grades 4 and 5, building on its existing use in kindergarten through third grade.
Middle school teachers will also receive Science of Reading professional development to strengthen evidence-based literacy instruction. In addition, students who meet established achievement benchmarks will now be automatically placed into advanced English Language Arts courses, aligning ELA placement with the state’s existing policy for advanced mathematics.
Teacher Pay Increases and Advanced Teaching Roles
The 2026–2027 budget makes a significant investment in educator recruitment and retention through salary increases, bonuses, and an expanded teacher leadership program.
Teacher Compensation
The budget provides teachers with an average 8% salary increase, with larger percentage increases directed toward newer educators. As a result, North Carolina’s state-funded starting teacher salary will increase to $48,000. When combined with local salary supplements, state leaders estimate that no teacher will earn less than $50,000 annually.
Teachers will also receive a one-time, experience-based bonus during the next school year:
- $500 for educators with 15 or fewer years of experience
- $1,000 for educators with 16 or more years of experience
While the budget includes meaningful salary increases, it does not restore master’s degree pay or eliminate the salary plateau affecting teachers with 15 to 24 years of experience, two proposals that were considered earlier in the legislative process.The raises are also prospective and do not include retroactive pay.
Expansion of Advanced Teaching Roles
Funding for North Carolina’s Advanced Teaching Roles (ATR) program increases funding from approximately $10 million to $40.9 million. The additional investment is expected to eliminate the current waitlist and allow more districts to participate.
The legislation also updates the program’s leadership structure by creating three differentiated teacher leadership roles:
- Collaborative Impact Leader: Receives a $10,000 salary supplement to mentor and support a team of four to eight teachers.
- Partial-Release Collaborative Impact Leader: A new role that receives a $5,000 supplement while leading a smaller team of two or three teachers.
- Teacher of Distinction: Receives a $3,000 supplement for teaching an expanded classroom while supporting instructional excellence.
Artificial Intelligence and Digital Learning Initiatives
The 2026–2027 budget expands North Carolina’s investment in artificial intelligence for K–12 education by funding statewide AI tools and establishing a framework for AI literacy.
Statewide AI Tools
The budget allocates $5 million annually for statewide AI platforms that support both students and educators. These state-funded tools are intended to expand access to AI-powered tutoring, lesson planning, instructional support, and other classroom resources. By purchasing these platforms at the state level, North Carolina aims to expand access to AI resources while reducing the burden on individual districts to evaluate and procure AI solutions.
AI Literacy Standards
The budget also directs the State Board of Education to develop age-appropriate K–12 AI literacy standards, giving districts a consistent framework for teaching students about artificial intelligence and integrating AI into classroom instruction.
Principal Pay Changes
The budget provides principals with a 3% salary increase and a $1,000 bonus, but it also introduces a significant change to how principal compensation is structured.
Beginning in January 2027, principals will continue to receive a base salary tied to school size (ADM), while performance-based growth pay will be issued as a separate supplement through the Department of Public Instruction (DPI) rather than being built into base salary.
Concerns have been raised that this change could reduce monthly take-home pay and affect retirement calculations for principals at schools that meet or exceed growth targets. In response, lawmakers delayed implementation until January 2027, giving districts additional time to prepare for the transition.
Teacher Licensure and Staffing Flexibility
The budget also includes several licensure changes designed to help districts address staffing shortages and expand hiring flexibility.
Expanded Grade Bands
Traditional K–6 elementary teaching licenses will now extend through grades 7 and 8, giving districts greater flexibility to place elementary-certified teachers in middle school classrooms when needed.
Licensure and Reciprocity Updates
The budget also streamlines the licensure process by making it easier for qualified out-of-state and international educators to transfer their credentials to North Carolina. In addition, the state eliminates the first-year licensure exam requirement, retains the third-year assessment, and allows high-performing teachers on limited licenses to earn a continuing professional license after demonstrating strong performance for two of their three most recent years.
What This Means for North Carolina District Leaders
With the budget now in effect, districts have a limited window to prepare for new instructional requirements and operational changes. As you finalize plans for the 2026–2027 school year, here are four priorities worth addressing.
1. Prepare for New Math Screening and Intervention Requirements
Districts with low-performing schools will need a clear process for meeting the state’s new math requirements, including daily grade-level instruction, three annual screening windows, parent notification, and individualized Mathematics Success Plans for students who demonstrate significant learning difficulties.
Planning Consideration: Identify which campuses are affected, determine how screening data will trigger intervention, and establish a consistent process for documenting student progress as additional guidance becomes available from DPI.
2. Support Teachers Transitioning into Middle School
The expanded K–8 licensure flexibility may help districts fill staffing vacancies, but it also means some elementary-certified teachers could be responsible for middle school standards and end-of-grade expectations for the first time.
Planning Consideration: Ensure these educators have access to high-quality instructional resources, assessments, and professional support aligned to North Carolina’s middle school standards so they can transition successfully into their new roles.
3. Develop a District AI Strategy
With new state-funded AI tools entering classrooms, districts have an opportunity to thoughtfully integrate AI into instruction while maintaining a focus on student learning.
Planning Consideration: Establish clear expectations for how AI tools will be used alongside classroom instruction and ensure students continue to demonstrate independent mastery of grade-level standards through standards-aligned assessments and practice.
4. Prepare for the Statewide ERP Transition
Although districts are not expected to migrate immediately, DPI has been tasked with developing a statewide ERP transition plan by November 1, 2026.
Planning Consideration: Use this planning period to review data systems, software integrations, and roster management processes so your district is well positioned when implementation timelines are announced.
Looking Ahead
North Carolina’s first state budget in nearly three years gives districts greater clarity as they prepare for the 2026–2027 school year. It also introduces new expectations around mathematics intervention, literacy instruction, educator support, artificial intelligence, and district operations.
The districts best positioned for success will be those that take a coordinated approach by using assessment data to identify learning needs, providing targeted intervention, monitoring student progress, and documenting growth throughout the year.
If your district is preparing for the new math and literacy requirements, consider whether your current instructional tools support the new expectations for screening, intervention, progress monitoring, and reporting. Progress Learning’s North Carolina standards-aligned assessments, practice, reporting, and Liftoff adaptive intervention for grades 2–8 are designed to help districts identify learning gaps, deliver targeted instruction, and monitor student growth throughout the year.
As additional implementation guidance becomes available from DPI, districts that plan early will be better positioned to meet new requirements and keep the focus where it belongs: helping every student master North Carolina’s academic standards.
