In the days before adjourning for Memorial Day weekend, House leaders made time to override Governor Stein’s veto of HB87 Educational Choice for Children Act. This bill requires North Carolina to opt into the federal voucher program passed as part of last summer’s H.R. 1 budget legislation (Big Beautiful Bill). The federal legislation requires governors of each state to opt into the program annually, but the NCGA chose to sidestep our governor’s authority by passing HB87.
The federal government has not yet released regulations for the voucher program, so Governor Stein vetoed the bill last summer, stating that he would wait to see whether the program could benefit public school students before he opted in. (See our short fact sheet on the federal voucher program.)
The Senate has not yet overridden Governor Stein’s veto, but they may take it up when they return after the holiday.
Instead of focusing their attention on our much-needed budget, lawmakers also chose to move forward with bills to unnecessarily change the state constitution. The changes outlined in the constitutional amendments could be implemented in legislation passed by the NCGA this session, but majority lawmakers are pushing through the amendments as a way to lock in changes in case upcoming elections don’t go their way. These bills do not require the Governor’s signature, so he has no opportunity to veto them.
(Legal scholars widely agree that legislators should only use constitutional amendments to correct fundamental, structural flaws in our government or to fix a gross injustice–never to resolve political disputes. The threshold for seeking constitutional amendments should be exceptionally high, not based on a partisan agenda.)
HB 144 Elect SBE/Superintendent as SBE Chair would change how members of the State Board of Education are selected. Currently they are appointed by the governor according to specific guidelines for representation and are confirmed by the General Assembly. Under this constitutional amendment, members would be elected from NC’s currently gerrymandered congressional districts established by the legislature and not subject to the governor’s veto. During discussion, concerns were raised about the SBE membership becoming partisan positions as the districts would be drawn by lawmakers who could gerrymander them for partisan advantage.
SB 1080 Lower Taxes for All NC changes the state constitution to cap the personal income tax rate at 3.5%. Currently, the state constitution limits the personal income tax to a high of 7%. For the 2025 tax year, the rate was 4.25% and is scheduled to drop to 3.99% in 2026. The loss of revenue from these tax cuts has the potential to severely restrict funding for essential services such as public schools, emergency services, and libraries.
HB 1089 Const. Amend. Property Tax Levy Limit changes the state constitution to require the NC General Assembly to create a property tax “levy limit” that would restrict how much a local government’s revenue from property taxes could grow each year regardless of how much expenses grow. This amendment is extremely vague and has the potential to eliminate an important revenue source for local governments. Opponents point out that if the state government passed budgets with adequate funding, local governments would be able to reduce property taxes.
In contrast, several bills that have the potential to help North Carolinians are languishing in committee.
SB 943 Kids Over Corporations Act reverses the downward slide of corporate income tax and reinstates a set rate of 5% starting with the 2026 tax year. The current corporate income tax rate is 2.5%, one of the lowest in the country. All of our surrounding states have higher rates, ranging from 5% in South Carolina to 6.5% in Tennessee.
HB 1073 / SB1016 Fair Share for Public Schools Act creates a 7% personal income tax rate for income over $1 million and requires the funds toward public schools through the State Public School Fund.
Other bills affecting public education are moving through committees and may become part of the budget. Below are two that have been discussed recently.
SB 990 Students First Act has three main components. The second and third strongly push the school privatization agenda by shifting funds and oversight away from public control and accountability.
- Adds limitations to the student disciplinary information that can be made public for students at higher education institutions, even if the information is allowed under the federal Family Ed. Rights and Privacy Act (FERPA).
- Creates a working group to study and develop a plan to transition funding to a weighted student funding model for K-12 public schools. The working group is also directed to study whether to transition the responsibility of disbursing all public school funding from NCDPI (which the state constitution requires) to the NCSEAA (the state organization that disburses financial aid and the voucher programs).
- Creates the Student-Based Educational Wallet Pilot Program for the 2027-28 school year. The program would involve one NC high school. Eligible students could apply for up to $395 each to pay for qualifying educational expenses that the school confirmed would provide school credit. The NCSEAA would use electronic accounts to give the funds to the parents to pay for the courses. The bill appropriates $445,000 to pay for the pilot program.
SB 1006 K-12 Innovation and Transformation Act sets up another commission to study ways to overhaul high school and higher education to “better prepare North Carolina students for success as they transition to higher education or the workforce.” The bill lists the required commission members and includes a list of practices that the commission must consider, many of which are already in place in schools across the state (e.g., partnerships between public school units and community colleges).
The bill also requires the Department of Public Instruction to establish a procedure for reviewing monthly expenditures by public school districts and require repayment if the district has overspent a specific allotment. SB1006 excludes charter schools and voucher-receiving private schools from this monthly audit.
One of the required commission members is the CEO or designee of Spark NC, an organization that stands to gain tens of millions in state funds from other provisions in SB1006. The bill provides funding for traditional public and charter schools to partner with a contractor to set up Learning Accelerator programs – modular learning experiences focused on science, technology, engineering and math. Note that the bill does not allow schools to develop Learning Accelerator programs with their own staff or to develop staff expertise needed to launch a program in-house.
The bill appropriates $8,855,000 each year in recurring funding for DPI to administer the Learning Accelerator programs. It also gives Spark NC $6,500,000 in annual recurring funds starting in 2026-27 as a grant to fund Spark NC’s administrative costs so they can be an eligible Learning Accelerator contractor. In addition, the bill gives Spark NC a $5,780,000 direct one-year grant to pay for start-up costs so it can expand as needed to provide Learning Accelerator programs
SB 1006 also appropriates $10,060,560 annually for districts to contract with Kahn Academy for an “AI Academic Support Program” in grades 6-12 that uses the Kahnmigo application to help teachers develop lessons and provide AI tutoring support for students.
In an effort to address North Carolina’s decaying teacher pipeline, the bill establishes the TeachReadyNC apprenticeship program to fund training and mentorship for people with a bachelor’s degree who want to become teachers. No funds are appropriated for the program in this bill; it references potential appropriations in the pending budget bill: “To the extent funds are appropriated by the General Assembly for TeachReadyNC…”
In one of the latest examples of reviving old ideas and renaming them “innovation”, the bill establishes a “competency-based innovation” grant program. More than $6,000,000 is appropriated to enable schools to transition to competency-based education (CBE) models that focus on mastery “instead of instructional time.” CBE models first emerged in the US in the 1960s and reached their peak in the late 1980s and 1990s as schools tried and rejected them. Now they’re back in this bill as sponsors seem to be trying everything they can to avoid their obvious neglect of NC public education and the state’s last-in-the nation rank in public education funding effort.
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