Local school districts across North Carolina are in budget season with superintendents and school boards grappling with growing needs and no new state budget in sight. It has been eight months since state lawmakers were supposed to pass a biennial budget, which provides nearly 60% of local districts’ funding.
While the legislature can get away with not passing a budget, school districts can’t. They are mandated by state law to adopt their annual budget by July 1, which marks the start of the new fiscal year. Local Boards of Education are required to submit their budget requests to the Board of County Commissioners by May 15. Because school districts rely on local funding, the Board of County Commissioners must approve the school district budget as part of the county’s budget adoption process. Because districts must pass their budgets by July 1, they often do so without knowing the final state funding levels, as the state legislature frequently misses its own July 1 deadline.
What makes this year’s budget cycle for districts even worse—beyond not having a state budget—is the widely-reported threat of a looming state fiscal cliff. The fiscal cliff will be caused by the state bringing in less revenue than it needs for required spending, resulting in severe economic problems statewide. Over the last decade, the legislature has prioritized tax cuts for the wealthy and funding private school vouchers, leaving less and less money for other programs.
North Carolina’s corporate tax rate is already set to go to 0% by 2030. The elimination of the corporate tax rate and personal income tax cuts that overwhelmingly benefit the wealthy are estimated to cost the state $2.6 billion in fiscal year 2026 (July 1 2025 – June 30 2026) and grow to a loss of $13 billion in fiscal year 2031.
According to the Office of State Budget and Management (see pg. 33), the cost of personal and corporate income tax cuts already signed into law are projected to create a budget shortfall of $2.5 – $4 billion between fiscal years 2027-28 and 2032-33. In other words, lawmakers have cut the state’s future income so much that NC’s budget will be in the red starting in 2027-28 even with NO added expenses other than adjustments for inflation.
While state lawmakers are cutting taxes for corporations and the wealthy, they are also choosing to spend lavishly on private school tuition vouchers. So far this school year, the state has paid private schools more than $608 million (Opportunity Scholarships & ESA+). Since the voucher program started, more than $1.4 billion has gone to private school tuition payments at the expense of our public schools.
What’s even worse, the voucher programs are “forward-funded” which means the budget appropriations for vouchers are made a year in advance. In other words, in the 2024-25 budget, money was set aside to pay for vouchers in 2025-26. So while public school districts cannot count on state funding for teacher raises, transportation services, per-pupil allotments, or other critical needs, private schools getting taxpayer funded vouchers don’t have to worry—they know how much they’ll get and they’re taking full advantage of that certainty.
Since 2023, when a massive expansion of the OS program passed into law, voucher schools across NC have raised tuition, embarked on major renovations and facility upgrades, and announced plans to open new schools. Public school districts however, have in some cases cut positions and services, and have been unable to fund much-needed repairs to aging facilities, including HVAC—a widespread issue that sometimes leads to loss of days of instruction.
The most devastating loss in some districts has been school closures. Last year, the Rutherford County School Board voted to close two schools due to a $6.1 million shortfall. In contrast, private schools in Rutherford County have received more than $7.7 million in tuition vouchers since the program launched. The state’s decision to fund private schools instead of public schools is directly harming communities.
Chapel Hill, Cumberland, Durham, and Granville are a few of the districts studying school closures for the coming school years. Cumberland County Schools may close eight schools to save $31 million in repair costs. Consider that in 2024-25 alone, private schools in Cumberland County received more than $28 million in tuition vouchers and have received more than $98 million since the program launched. That’s three times what the district needs to repair the eight public schools it may close due to lack of funds.
This week, Wake County Public Schools announced a plan to cut $18 million for special education due to insufficient state funding and higher costs, prompting “walk-in” demonstrations at schools across the county. In Wake County, a number of private schools receiving millions in tuition vouchers from the state each year do not admit special education students (search by city).
Wake County private schools received $56 million in tuition vouchers last year and over $105 million since vouchers were launched. A fraction of that private school tuition would fully pay for Wake’s special education shortfall this year.
New threats to NC public education funding
The harmful choices state lawmakers have made to not pass a state budget, cut taxes primarily for the wealthy, and funnel more than $1.4 billion into private school vouchers have created severe challenges for families, students, and schools. But our public schools face two new threats.
First, a new NC House committee is proposing limits on local county and municipal governments’ ability to raise local taxes. With the erosion of state funding for public schools over the last decade, school districts in many parts of the state have relied on county commissioners to fill funding gaps. Some counties haven’t been able to provide that support, but for those that have, it’s been an essential lifeline for public schools. If the legislature follows through with this threat and limits local tax increases, it will be another blow to public education in our state, harming tens of thousands of North Carolina’s PreK-12 students.
Second, a new federal voucher program is looming. Established under the July 5, 2025 budget bill H.R. 1 (“Big Beautiful Bill”), the federal school voucher program is the first of its kind. Participation requires states to “opt-in”. The NCGA moved swiftly in 2025 to pass an opt-in bill: HB 87. However, Governor Stein vetoed the legislation citing lack of federal guidance. Since then, Governor Stein’s position has come under question. We must urge Gov. Stein to stand against any pressure to change course and to say NO to federal vouchers.