The Republican-led House passed a mini budget on Wednesday afternoon, allocating new money to clear the waitlist for the Opportunity Scholarship Grant Program and fund enrollment growth for the K-12 and community college systems.

The mini budget does not include any new raises for teachers and school employees.

The bill, which was passed by the Senate on Monday, will now go to the governor. He has 10 days to sign it, veto it, or let it pass into law without his signature.

The mini budget bill allocates approximately an additional $463 million toward private school vouchers through the Opportunity Scholarships program for this fiscal year, which would be retroactive to the beginning of this school year. Families receiving a voucher would be eligible for a tuition reimbursement from their school, a press release from Sen. Phil Berger, R-Rockingham, said.

The bill also includes $64 million for enrollment growth across the N.C. Community College System, and $95 million recurring for K-12 enrollment increases.

“The mini budget strengthens our commitment to school choice for all NC families as well as public education, with historic investments in enrollment growth for both K-12 public schools and our community colleges,” House Speaker Tim Moore, R-Cleveland, said.

The mini budget also includes funding to expand access to high-speed internet in rural communities and language that requires “sheriffs to cooperate with ICE.” You can read more about items included here.

Last week, Democratic Gov. Roy Cooper spoke out against Republican lawmakers’ efforts to expand Opportunity Scholarships.

“Republican legislators are returning to Raleigh to siphon hundreds of millions of taxpayer dollars out of public schools and give it to the wealthy through private school vouchers,” Cooper said in a press release last week. “This would be disastrous for our public schools and the future of our state. They should invest in public education instead so we can give teachers an overdue pay raise.”

The General Assembly’s further expansion of voucher funding comes the week after the North Carolina Office of State Budget and Management (OSBM) released an updated analysis predicting that if lawmakers clear waitlists for Opportunity Scholarships, state funding for public schools could decrease by nearly $100 million in the first full year with expanded funding.

On Monday, Sen. Jay Chaudhuri, D-Wake, hosted a teacher roundtable to discuss the impact of the expanded voucher funding on public schools.

During the event, teachers said lawmakers should invest more in public schools before funding private school vouchers. Specifically, teachers cited understaffing, low teacher pay, and a lack of sufficient resources in public schools.

“We have so many needs happening right now,” said Eugenia Floyd, 2021 Burroughs Wellcome North Carolina Teacher of the Year. “There are things that are happening in my classroom right now that I would love some help financially. …There are so many children in my classroom right now that literally are waving their hand and, saying, ‘What about us? We have needs, too.'”

Republican leaders have said they will invest in public schools as they prioritize expanding school choice in North Carolina.

“As we expand school choice, North Carolina will continue to have an educational landscape that appeals to all, providing high quality options for those who choose private school, traditional public school, charter school, and home school,” Senate Education Committee Chairman Sen. Michael Lee, R-New Hanover, said in a press release.

Below, you can find a brief explainer on each of the education items included in the mini budget.

You can read the full bill on the General Assembly’s website.

First, how did we get here?

In fall 2023 — after an extended long session — the General Assembly passed a two-year budget for Fiscal Year (FY) 2023-25.

During the short session, the House and the Senate each passed individual budget proposals, but adjourned before passing an updated budget for this fiscal year.

When the General Assembly adjourned in June, it released a resolution outlining future meeting dates and what could be discussed during each meeting.

That resolution indicated the General Assembly would not discuss budget adjustments until the session scheduled for Nov. 19-22. Lawmakers were able to pass a mini budget before then by adding a conference committee substitute to House Bill 10, which originally only required sheriffs to cooperate with ICE.

While Republican lawmakers from both chambers agreed on further expanding the vouchers before adjourning, they disagreed on giving additional raises to public school employees. The Senate’s proposal did not include any new raises for school and state employees, while the House’s proposal included an additional raise of approximately 1-1.5%.

As mentioned above, the mini budget passed this week does not include new raises for school and state employees.

Under the budget passed in 2023, most state employees received a 3% raise in FY 2024-25, effective July 1. For teachers, the 2023 budget gave larger raises to beginning teachers, with raises decreasing with years of experience. 

Opportunity Scholarship funding

In 2023, the Republican-led General Assembly removed income eligibility requirements and expanded funding for the Opportunity Scholarship Grant Program, leading to approximately 70,000 new applications for private school vouchers for the 2024-25 academic year.

The North Carolina State Education Assistance Authority (NCSEAA) —  the state agency designated by law to administer K-12 scholarship programs — offered vouchers to 15,805 new students. That left nearly 55,000 students on the waitlist.

The mini budget passed on Wednesday provides enough funding to effectively clear that waitlist — approximately $463 million, the largest share of the bill’s new funding. The bill also increases the amount of future funding for the program.

The bill also includes $24.7 million in recurring funds to clear the Education Student Accounts (ESA+) waitlist for students with disabilities. You can read more about ESA+ accounts here.

“North Carolina families who applied and qualified for the Opportunity Scholarship and ESA+ programs deserve to receive those scholarships,” Lee said. “It’s time we fulfill our commitment to these families.”

According to the NCSEAA, 13,511 new Opportunity Scholarship applicants in Tier 1 were sent offers, along with 2,294 new students in Tier 2. No new families from Tiers 3 and 4 were sent offers.

This means that all remaining waitlist students are in Tier 2, Tier 3, and Tier 4. (Tier 1 is for families with the lowest income levels.)

The max scholarship award is $7,468 for Tier 1 families. That amount decreases by tier level.

It is not clear how many of the 55,000 students on the waitlist already attend private schools.

Once the mini budget is enacted into law, it is also unclear how many students currently enrolled in a public school will un-enroll and move to a private school.

Per the budget, the NCSEAA must award “funds for the fall semester of the 2024-2025 school year for all eligible students who are enrolled by October 1, 2024, in an eligible nonpublic school and remain continuously enrolled in that same school for the spring semester.”

Once the NCSEAA posts information on how and when the additional funds will be dispersed, EdNC will provide updates. Stay tuned.

Funding for K-12 enrollment growth

In 2023, lawmakers also enacted a new funding in arrears model for K-12 public schools. This means funding is now based on the previous year’s enrollment, rather than projections. Lawmakers and officials from the Department of Public Instruction (DPI) have said this model gives more budget certainty to schools.

However, the new enrollment growth account balance only has $2.5 million it it, Moore said in a press release this week, “less than 5% of expected funding necessary to meet the needs of K-12 enrollment growth for this year.”

“Therefore, the mini budget allocates $95 million to meet this critical need for our growing public schools,” Moore said.

This funding is especially critical for charter schools, according to a Tuesday press release from the North Carolina Coalition for Charter Schools.

“Thank you to state lawmakers for coming together to propose enrollment growth funding at traditional and charter schools,” Lindalyn Kakadelis, executive director of the N.C. Coalition for Charter School, said. “Our member schools have reached out to us with great anxiety in recent weeks, because without this funding they may soon face a liquidity crisis. We respectfully urge lawmakers and the governor to ensure this funding is enacted into law.”

In North Carolina, last year’s enrollment growth among public schools came from charter schools, which are public schools with more flexibility than traditional public schools.

For small, new, or fast-growing charter schools, the lack of enrollment growth funding could lead to such schools being unable to meet payroll, the coalition’s press release said.

“We will not be able to make payroll (without funding),” one charter school said. “That means our teachers will miss paychecks. We needed to hire teachers to teach 240 students, but with funding for only 118 students, we have not been given enough to pay them through November. We may further miss one or more lease payments, putting us in default on our lease and causing us to incur late fees.”

Community college enrollment

Finally, the mini budget also includes $64 million for enrollment growth and $12.7 million in receipts for the community college system.

During the State Board of Community College’s August meeting, system staff said that without the funding, some colleges are facing large budget deficits for this fiscal year.

“Many of them are millions of dollars short on the budget from where they would be,” said N.C. Community College System President (NCCCS) Dr. Jeff Cox. “So they’re having to make some of those hard decisions right now.”

The Board said then that community colleges needed $69 million for enrollment growth and about $7 million in receipts.

At the time, NCCCS leaders expressed concern that enrollment funding likely would not be passed until November — based on the language in the General Assembly’s adjournment resolution.

If the funds were not passed until November, colleges would likely not have enough time to make decisions that account for having that enrollment increase.

“The timing of the budget deal is fortunate for the colleges,” Moore said on Tuesday. “With it likely to pass in September, the colleges will be able to plan for the spring semester knowing they have additional money coming in.”

The General Assembly is scheduled to meet next on Oct. 9, Nov. 19-22, and Dec. 11-13.

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This article includes reporting from EdNC’s Chantal Brown.