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SB 439

Moratorium on Opportunity Scholarships.

2025-2026 Session Introduced by Val Applewhite and 5 co-sponsors

SB 439 bans new Opportunity Scholarship awards from 2025–26, shifts funds to public schools, and sets an eventual phase‑out of the program by 2037–38.

Passed 1st Reading
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WeVote Research Nonpartisan
Bill Summary · SB 439

Summary — SB 439: Moratorium on Opportunity Scholarships (First Edition)

Status: Passed First Reading
Introduced: Feb 18, 2025
Effective Date: July 1, 2025 (applies beginning with the 2025–2026 school year)

Main purpose

SB 439 imposes an immediate moratorium on new Opportunity Scholarship awards, reduces several upcoming appropriations for the scholarship program, and redirects those savings to public K–12 schools. The bill expresses legislative intent to phase out the Opportunity Scholarship program entirely by the 2037–2038 school year (or earlier, when current recipients become ineligible).

Key provisions

  • Moratorium on new awards

    • Beginning in the 2025–2026 school year, the State Education Assistance Authority shall not award Opportunity Scholarship grants to any person who did not receive a scholarship in the prior school year. Existing recipients remain eligible under current rules until they lose eligibility.

  • Appropriations and funding reductions (specific reductions in 2025–26 and 2026–27)

    • Reduces recurring funds to the UNC Board of Governors for the Opportunity Scholarship program by $30,000,000 in FY 2025–26.
    • Reduces nonrecurring funds allocated from the Opportunity Scholarship Grant Fund Reserve by $28,460,000 for FY 2025–26 (funds that would have been used to award scholarships in 2025–26).
    • Reduces the Reserve by $83,460,000 in recurring funds for FY 2025–26, and an additional $50,000,000 in recurring funds for FY 2026–27.

  • Reallocation to public schools

    • Appropriates to the Department of Public Instruction (to be distributed to local school administrative units based on Average Daily Membership):
    • FY 2025–26: $113,460,000 recurring and $28,460,000 nonrecurring.
    • FY 2026–27: an additional $50,000,000 recurring.

  • Longer‑term cap on scholarship increases

    • States the Legislature’s intent that any future increases (beginning in the 2027–2029 biennium and thereafter) for Opportunity Scholarships be limited to no more than the annual percentage increase in funding for public schools as reflected in the State Public School Fund.

  • Revises statutory appropriation language for the Opportunity Scholarship Grant Fund Reserve, changing the long‑term annual appropriated amount in the statute (text replaces an $825,000,000 figure with $541,540,000 for future fiscal years in the provision as presented).

Who is affected

  • Prospective private‑school voucher applicants: new applicants (those who did not receive a scholarship in the prior year) are barred from receiving awards beginning 2025–26.
  • Current Opportunity Scholarship recipients: remain eligible under existing rules until they age out or lose eligibility; the bill contemplates eventual program phase‑out by 2037–38.
  • UNC Board of Governors and the State Education Assistance Authority: experience reduced scholarship allocations and changed administration responsibilities.
  • Department of Public Instruction and local school administrative units: receive redirected funds to support public schools.
  • Participating private schools and scholarship program administrators: will see fewer (no new) entrants and a smaller funding stream.

Fiscal and timeline notes

  • The bill shifts roughly $200+ million in specified reductions/redirects in FY 2025–26 and FY 2026–27 into public school funding (see line‑item amounts above).
  • Effective July 1, 2025; moratorium applies starting school year 2025–26.
  • The bill states intent to eliminate the scholarship program by 2037–38 (or once current recipients become ineligible), but does not immediately repeal the statutory program—rather it freezes new entrants and reduces appropriations.

Procedure / legislative posture

  • Introduced Feb 18, 2025; passed 1st reading. (Check the legislature’s public docket for later committee actions or floor votes.)

If you’d like, I can:
- Produce a one‑page fiscal impact estimate based on the appropriation changes; or
- Draft a short memo comparing this bill to prior scholarship funding levels and enrollment trends.

Compiled from official sources — confirm details with the bill’s official record.

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