North Carolina lawmakers have passed a budget that includes a 1.2 percent pay raise for teachers. It also includes several parts of what Republicans in the Senate call a major reform bill. The budget includes $27 million for a package of education changes. Among those is an emphasis on reading in early grades. Struggling students will get extra help with reading, but if they aren't reading at grade-level by the end of third grade, they'll be held back. The budget also requires grading schools on an A-to-F basis and directs local districts to come up with their own plans for merit pay for teachers. Getting rid of teacher tenure did not make it into the budget. Neither did a move to allow businesses to receive state tax credits for donations to private school scholarships. CMS Interim Superintendent Hugh Hattabaugh told the Charlotte Observer the state money for raises makes it likely Charlotte Mecklenburg School teachers will receive a 3 percent pay raise. State School Board Chairman Bill Harrison is disappointed with the budget. He says it does nothing to ease the loss of $260 million in federal stimulus dollars and includes significant policy changes that haven't been sufficiently debated.