Summary of SB 915 (Session 2025) – 2026 Governor's Budget (North Carolina)
This bill, titled the Current Operations Appropriations Act of 2026, provides base budget appropriations for current operations of state departments, institutions, and agencies for the 2025-2027 fiscal biennium, along with various related funding changes, programmatic reforms, and targeted spending outside the base budget. It includes provisions for General Fund, Highway Fund, and other dedicated funds, as well as extensive changes to education funding and administration.
Sections at a glance
- Part I: Title and introduction
- Part II: Current Operations and General Fund
- Part III: Highway Fund and Highway Trust Fund
- Part IV: Other availability and appropriations
- Part V: General provisions
- Part VI: Community College System
- Part VII: Public Instruction (K-12) and related education policy changes
- (Selected sections summarized below)
1) Purpose and overall framework
- Establishes the “Current Operations Appropriations Act of 2026” to set maximum necessary appropriations for ongoing state operations and to allow savings where amounts exceed what is required.
- Provides a framework for General Fund availability, including adjustments to revenues and reserves, and outlines how funds may be used, saved, or reallocated.
- Sets up dedicated appropriations for Highway Fund and Highway Trust Fund activities.
Key takeaway: The bill is a comprehensive appropriations act intended to implement the Governor’s budget, addressing base operating funds, reserves, and targeted program funding across state agencies, with notable emphasis on education funding reforms and capital/capacity investments.
2) General Fund – major allocations and adjustments
- Repeats a multi-year appropriation schedule for the 2025-2027 fiscal years by agency/department (Current Operations – General Fund).
- Education allocations (higher education and public instruction) are listed with year-over-year figures for:
- Community College System
- Public Instruction
- Several constituent institutions within the UNC System (UNC System, including academic and health affairs) and private/other entities (with notable adjustments like University of North Carolina system “University Institutional Programs” and “Related Educational Programs” line items).
- Health and Human Services: includes major line items such as Health Benefits, Mental Health/Developmental Disabilities/Substance Abuse Services, Social Services, Public Health, etc.
- Other General Government and Justice/Public Safety categories (Judicial, Department of Justice, Department of Public Safety, etc.) appear with 2025-2026 and 2026-2027 figures.
- Several reserves and budget adjustments:
- State Capital and Infrastructure Fund
- Savings Reserve
- Contingency and Emergency Reserve
- Medicaid Contingency Reserve (balance appropriated)
- Federal Infrastructure Match Reserve (to be deployed for state match requirements and to mitigate federal spending disruptions)
- IT investments: Transfers from the IT Reserve for prioritized projects (e.g., data storage modernization, OPUS system, ADA campus safety upgrades, payroll modernization, etc.)
Key takeaway: The General Fund section specifies the base operating appropriations by agency for the two-year period and outlines reserves and targeted adjustments to support anticipated needs, federal matches, and IT modernization.
3) Education emphasis and policy changes (Public Instruction, Community Colleges)
Public Instruction (K-12):
- Repeals the existing Textbook Commission and reorganizes textbook/ instructional materials governance under State Board of Education (SBE) and local boards.
- Funds and responsibilities shift toward an Instructional Materials funding allotment within the State Public School Fund starting July 1, 2026, with funding allocated for textbooks, digital resources, and instructional materials.
- Establishes multiple new or revised programs/allocations:
- Limited English Proficiency (LEP) funding methodology changes
- School Resource Officer (SRO) Allotment creation and consolidated administration through DPI
- Literacy interventions for grades K-8; expansion of diagnostic/ formative assessments for 4-5 grade levels; enhanced reading supports
- Expanded literacy professional development and Lexia Aspire integration for teachers
- Early Literacy Program expansions and EVAAS data analysis for formative/diagnostic assessments
- IRP (Individual Reading Plans) framework for students with reading difficulties
- School Performance Grade Redesign Pilot Program (2026-2028) to test new evaluation criteria with planned expansion to all K-12 schools in 2028-29; final recommendations and potential permanent changes to the performance-measure model anticipated by 2029.
- Virtual charter schools: changes to funding structure; eliminates transportation funding for virtual charters; adjusts per-pupil funding similar to other charters
- Charter school funding: alignment of charter funding with local average daily membership; LEP/Disabilities adjustments
- Safety and capital improvements: SRO funding, possible consolidation of high school SRO funding into the SRO Allotment; training standards for SROs
- CEP (Community Eligibility Provision) meal program enhancements, with CEP funding for meal programs
Community Colleges (Propel NC and related reforms):
- Propel NC funding model adjustment to shift from a tier-based enrollment model to a labor-market-driven model, linking course offerings to high-demand, high-salary jobs
- Workforce sector designation aligned with state economic priorities; potential use of funds for customized training and Small Business Centers
- Enrollment Growth Reserve to retain and allocate tuition/fee receipts above budgeted levels to colleges experiencing enrollment growth
- Expanded use of funds for customized training personnel; limits on nonprofit salaries funded by state
- Capital and program-specific authorizations (e.g., up to $500,000 for Lenoir Community College for a facility related to the Motorcycle Safety Education Program)
- Short-Term Workforce Development Grants: up to $750 per eligible student for non-credit workforce credentials; requires residency and reporting
Other educational funding/allocations:
- Reorganization of several education-related funds and programmatic reporting requirements
- Abolition of the State Textbook Fund; transition to Instructional Materials funding allotment
Key takeaway: The bill prioritizes significant reforms to K-12 instructional materials governance, literacy interventions, school safety funding, and a major shift in community college funding to reflect labor-market needs, with explicit planning for data-driven oversight and reporting.
4) Highway Fund and Trust Fund
- Section 3 details the Highway Fund budget for FY 2026-2027, including Administration, Construction, Maintenance, and various transportation-related program allocations.
- Highway Fund availability totals roughly $3.402 billion, with projected revenue sources (Motor Fuels Tax, licenses/fees, sales tax transfer, etc.).
- Highway Trust Fund appropriations total $2.5685 billion for 2026-2027, with program components such as administration, bonds, Turnpike Authority, State Ports Authority, and strategic transportation investments.
Key takeaway: The bill specifies multi-year allocations for transportation capital, maintenance, and related programs, with explicit funding levels and fund availability.
5) Other notable provisions
- Flexibility on fees: agencies may establish or increase fees without JLGO consultation if within the act’s authorized authority; emergency rule-making allowed to implement fee changes.
- Public debt and reserves: provisions governing use of reserve funds and emergency funding, along with oversight reporting requirements for reserve expenditures.
- 2026 Disaster Recovery: $50 million to the Emergency Management Division for disaster response and recovery, with conditions on subrogation, floodplain requirements, federal insurance prerequisites, and reporting.
- Golden LEAF and NC Innovation: delineates conditions for loan repayments, remittance of net funds to state reserves, and transfer/return of funds to the State; outlines reporting requirements and repeal of certain statutory provisions upon fund transfers.
Key takeaway: The act couples operating appropriations with governance and oversight mechanisms, disaster recovery funding, and compliance measures to ensure funds support intended programs without undermining federal funds or long-term stability.
6) Effective dates and implementation
- Many education funding reforms are scheduled to take effect July 1, 2026 (e.g., Instructional Materials funding allotment).
- The School Performance Grade Redesign Pilot runs for fiscal years 2026-2027 and 2027-2028, with expansion planned for 2028-29 and final reporting by June 30, 2029.
- Several programmatic changes require new reporting to Joint Legislative Oversight Committees and the Fiscal Research Division.
If you’d like, I can tailor this summary to a specific audience (e.g., policymakers, educators, or the general public) or provide a side-by-side comparison with current law for the main education provisions.
