Politics & Government

NC House passes tuition break that could save booster clubs millions

The North Carolina House approved on Monday a break that could save booster clubs at UNC-Chapel Hill, NC State and East Carolina University millions of dollars annually on tuition costs for out-of-state athletes.

Senate Bill 144 gives the state’s public universities the option to charge the substantially lower in-state tuition for out-of-state athletes. But the schools would not get additional money from the state to cover the difference between the in-state and out-of-state tuitions. They would have to find the money within their existing budgets.

Rep. Jon Hardister, a Guilford County Republican, introduced the bill on the House floor, by saying “candidly, this would benefit some of the smaller schools.”

Those schools, such as UNC-Greensboro and N.C. Central University, do not have big booster clubs that bring in tens of millions of dollars to help pay for athletic scholarships and other needs.

UNC-Chapel Hill, NC State University and East Carolina University are in higher-profile athletic conferences that help draw larger fan bases. Their clubs’ most recently available tax returns show assets of $258 million at UNC, $80 million at NC State and $22 million at ECU.

Those three schools alone would receive nearly 60 percent of the estimated $16 million annual cost if all schools began charging the in-state tuition rate, a legislative fiscal note said. UNC’s Rams Club would save $5.1 million, NCSU’s Wolfpack Club would save $2.4 million, and ECU’s Pirate Club would save $2.1 million.

Democratic Reps. Zack Hawkins of Durham and Brian Turner of Asheville also said the break would help smaller schools’ athletic programs.

Rep. Pricey Harrison, a Greensboro Democrat who opposes the legislation, offered an amendment to address their concerns. The amendment would have excluded the break from schools with booster clubs claiming $5 million or more in revenues.

“If we’re going to put this policy in place, then we should help the smaller schools and the HBCUs,” Harrison said, referring to the state’s historically black colleges and universities.

Hardister successfully urged the majority of his colleagues to vote against Harrison’s amendment, saying all UNC schools should be treated the same. Including the larger schools might prompt them to provide more scholarships for less popular sports, particularly those for women, he said.

Big booster clubs

Afterward, Harrison said the opposition to her amendment showed the legislation is about benefiting the big booster clubs.

“This is pushed for the booster clubs, it’s for the booster clubs, it’s saving them millions of dollars a year,” Harrison said. “And it just seems to me to be the wrong way to spend taxpayer money.”

Other House members said they oppose the legislation because it could take away athletic scholarships to in-state residents, who could be pushed aside for out-of-state athletes. Another amendment by Rep. Ray Russell, a Boone Democrat, to tie the booster break to academic performance, also failed.

The in-state tuition break had been law for several years. Former state Sen. Tony Rand, a Fayetteville Democrat and majority leader, had inserted it for athletic and academic scholarships into the 2005 state budget, but the break for booster clubs was rescinded five years later as the state was in the depths of a recession.

The break first resurfaced this session in a wide-ranging athlete rights bill that never got a hearing. House leaders resurrected the booster-club break by gutting and amending an unrelated bill that had already passed the Senate. It was fast-tracked to the House floor in July, but Harrison and two other House members objected, and it was sent back to be heard in committees.

The N&O later reported that the NC Job Creators Forum — a nonprofit with a mission to promote economic development and job creation with less government taxation, spending and regulation — was pushing the booster break. It had hired Andy Munn, a former aide to House Speaker Tim Moore, a Cleveland County Republican, to lobby for its passage.

The legislative fiscal note was not produced until Monday, hours before the House vote. It noted the legislation said schools that elect to provide the break have to do it in such a way as to have “no fiscal impact,” but that didn’t appear to be likely because the in-state rate is heavily subsidized by taxpayers. At UNC, for example, in-state students are charged $9,018, while out-of-state students pay $36,000.

The House vote was 88 to 19, with mostly Democrats in opposition. The bill now goes to the Senate.

Staff writer Will Doran contributed to this report.

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Dan Kane began working for The News & Observer in 1997. He covered local government, higher education and the state legislature before joining the investigative team in 2009.