Colleges get more money for workforce development, athletic departments in NC budget

The new state budget overhauls how North Carolina's community colleges are funded, among numerous other changes affecting higher education.

The budget, signed into law by Gov. Josh Stein on Tuesday, provides some realignment for the state's colleges and universities. It reflects higher enrollment, a greater emphasis on workforce readiness, and a need to cut costs at the university level.

It also provides additional funding for university athletic departments, via sports gambling tax revenues, as both the cost and value of college sports continues to boom.

Here's what's in the budget for higher education:

Raises. Like most other state-funded employees, those who work at community colleges and universities will get a 3% raise and a one-time bonus. Raises will cost about $200 million more for these employees each year.

Enrollment growth. Enrollment is up at both community colleges and universities, and the new state budget will provide extra funds to cover those students that their tuition won't cover. Universities will get $107.5 million in recurring funds and another $46.4 million in one-time funding. Community colleges will get $73.7 million in recurring funding. The budget also provides extra funding for any community college that has a 5% increase in full-time equivalent students during the upcoming year. The colleges are funded based on the prior year's enrollment, which can leave colleges to front the cost of a sudden increase in enrollment because of a new program or initiative. The North Carolina Community College System requested that change for increased stability. 

Mental health awareness. Like in K-12 schools, the budget also requires colleges to better advertise mental health helplines for students. It requires schools to provide the Suicide and Crisis Lifeline and NC Peer Warmline phone numbers on the backs of new student IDs, school websites, the home screen of any school-issued devices, course agendas, calendars, suicide awareness documents and student registration documents.

No scholarships for students convicted of certain assaults. The budget prohibits any public scholarship funding from going to any students who have been convicted of assault against a government employee. That could be a state or local government worker.

Revamped funding formula for community colleges. Community college system leaders have been pushing for a fresh approach to funding, called Propel NC. The budget provides them with most — $57.5 million — of what they were asking for. Propel NC, supported by the North Carolina Chamber of Commerce and other business groups, does a lot. The budget eliminates performance-based funding for several metrics, including students' success rate in math and English, retention rates and associate's degree, licensure or certification attainment. That will save $18 million. Performance funding will remain for how well students do in basic skills courses, which are courses that help students achieve high school graduate equivalency degrees. The per-student funding formula will shift to provide additional funding for students enrolled in coursework linked to higher workforce demand. The State Board of Community Colleges approved the model in 2024, but lawmakers hadn't authorized it or provided the additional funds for the higher-demand programs.

More funding for basic skills. Community colleges will get $62.1 million more in funding for basic skills instruction to help people achieve high school graduate equivalency programs.

Workforce development for people with intellectual and developmental disabilities. The budget expands the number of community colleges that can have a workforce training program for people with intellectual and developmental disabilities, from 15 to 25. The budget provides $3.9 million for the expansion, about doubling the current funding amount.

Poe Hall demolition and reconstruction. The budget provides $38.7 million next year in one-time funds toward the project and $180 million new dollars in total. The project now has $185 million in state funds authorized for it over multiple years. North Carolina State University approved the project earlier this year. NC State closed Poe Hall suddenly in 2023 after early tests revealed the presence of polychlorinated biphenyls (PCBs), chemicals once common in construction. Further testing confirmed PCB levels above safety thresholds. The chemicals are carcinogenic and can cause other health issues. WRAL News has extensively investigated issues at Poe Hall, documenting reported cases of cancer among more than 200 former workers and students.

More sports gambling revenues. The University of North Carolina-Chapel Hill's and North Carolina State University's athletic departments will, for the first time since legal online sports betting launched in 2024, get a cut of the state's sports gambling tax revenues. Schools that play in the Football Subdivision, including UNC, NC State, East Carolina University, Appalachian State University and Charlotte, can receive up to $5.8 million annually. Other schools that compete primarily at the NCAA Division I level can receive up to $3.3 million. Schools that compete at the Division II level can receive up to $2.9 million. The amount the athletic departments receive is dependent on how much tax revenue is generated from sports betting. The budget increased the tax rate on sports betting operators from 18% to 23%. The schools, outside of UNC and NC State, have received more than $5 million from sports betting tax revenue since March 2024.

Retirement incentives allowed. UNC System schools could offer retirement incentives to faculty 55 years and older who are eligible for retirement, under the budget bill. UNC-Chapel Hill leaders said last summer they would do just that.

School of Civil Life and Leadership. The budget bill codifies the new UNC-Chapel Hill school, the School of Civic Life and Leadership, into state law. The school, which is moving out of the College of Arts and Science and is now an independent academic unit, will be required to hire 20 faculty members outside of UNC-Chapel Hill before it can hire any others. University leadership had already indicated it hired more than 20 faculty. It will also get $5 million in additional recurring funding. The school has been the subject of debate since its creation in 2023. It was founded by trustees, raising concern from faculty about their lack of involvement. Media outlets, including WRAL News, have since sued for access to an independent review of the school that UNC hasn't released. More than 1,000 students have taken a course offered by the school.

No more Future Teachers. The budget eliminates the Future Teachers of North Carolina program, a summer institute that helped introduce high school students to the teaching profession. That saves about $278,000. Education leaders have said they wanted to keep the program amid schools' struggles to recruit and retain teachers.

Funding to elevate NC A&T's research status. The budget provides North Carolina A&T with $10.6 million to continue the university's effort to achieve R1 Carnegie Classification status. R1 is the Carnegie Foundation's highest status and indicates "very high research activity," a designation that can signal research opportunities for prospective students and faculty.

Information for this article was contributed by Brian Murphy, WRAL sports investigation reporter.