— State House leaders on Tuesday unveiled their $21 billion budget plan for next year. It includes an average 5 percent pay raise for teachers, with starting salaries getting a bigger boost.

State workers would get a $1,000 raise, plus benefits. Retirees would receive a 1.44 percent cost-of-living increase.

Senior budget chairman Rep. Nelson Dollar, R-Wake, said the teacher raise isn't funded by cuts elsewhere to education. Instead, it would be paid for in large part by growth in the North Carolina Education Lottery.

The plan would double the amount of money – from 1 to 2 percent of net proceeds – that the lottery can spend on advertising. That's projected to yield an additional $425 million in ticket sales and $106 million in net proceeds. Dollar said that estimate came from lottery administrators.

"We are very confident, the lottery is very confident, that they will more than meet the goal," Dollar said.

The additional advertising funding comes with some strings attached: House Speaker Thom Tillis said the budget provision also includes stronger disclaimers to lottery players about odds and actual payouts.

Tillis acknowledged that some in his caucus dislike the lottery, but he predicted they would support the changes.

"My guess is, if Republicans had been in the majority at the time the lottery was put before the people, it would never have made it to the floor," Tillis conceded. "But it is here, and you can't necessarily unring that bell when you're talking about hundreds of millions of dollars going to education."

Lottery director Alice Garland said ticket sales have risen steadily over the years, but never the 20 percent that lawmakers now expect. She said she doesn't know of any state lottery called on to increase revenue by that much.

"This is heady stuff. It will take a lot, but we are dedicated. We can make it happen," Garland said.

The lottery plans introduce new games to step up sales, and the House budget also would tap more than $60 million in lottery reserves.

Chris Fitzsimon of the the left-leaning NC Policy Watch, called the plan "cynical, outrageous and ... hypocritical."

"What they've done is they've counted on convincing people to throw their money away on a state lottery as the only way they can afford a teacher raise," Fitzsimon said, adding that he still prefers the House's proposed budget to the plan adopted last month by the Senate.

The House plan does not link teacher raises to tenure. In fact, said Rep. Bryan Holloway, R-Stokes, it doesn't address tenure at all.

"This budget has no strings attached to it," he said. "You do not have to give up tenure or give up anything to get your pay raise. It's just automatic."

The Senate budget called for teachers to receive 11 percent raises on average, but teachers who insisted on retaining their career status rights, or tenure, wouldn't be put on the new salary scale that includes the raises.

The House plan also does not include the Senate's proposed cuts to teaching assistants or school nurses. It would also keep open the Wright School in Durham, which provides mental health services for children.

After expressing concerns about the Senate budget, Gov. Pat McCrory gave the House spending plan a thumbs-up after an initial review.

"I will continue to support a budget plan that provides sustainable raises for teachers and state employees, protects teacher assistants, protects master’s pay, provides career pathways for teachers and funds core services for the needy and disabled," McCrory said in a statement.

Like the Senate, the House plan moves the State Bureau of Investigation out of the Attorney General's Office into the Department of Public Safety, although the State Crime Lab would stay under the attorney general. It also moves the Alcoholic Beverage Control Commission into DPS from the Department of Commerce.

Rep. Justin Burr, R-Stanly, said the House proposal also avoids the steep cuts to Medicaid eligibility proposed by the Senate.

Tillis predicted a smooth, quick conference process.

"It is our goal to vote this out this week," he said of the House budget, adding that he believes the House and Senate could finish negotiations and pass a final version by the end of next week.

Sections of the House spending plan will be heard and amended in subcommittees Tuesday. On Wednesday, the proposal goes before the full House Finance and Appropriations committees. It's required to receive two votes before the full House, which are tentatively scheduled for Thursday and Friday.