Winston-Salem Journal
This is no time for the taxpayers of North Carolina to be subsidizing tuition for out-of-state student-athletes on UNC campuses.

Not with drastic budget cuts being made across the spectrum of state services. Not with 7-percent budget cuts likely on our university campuses, cuts that will lead to larger class sizes, fewer course offerings and either layoffs or furloughs for faculty and staff.

Yet taxpayers are subsidizing out-of-state athletes because state Senate leaders established that system when they slipped a provision into the budget several years. The provision grants in-state tuition status to anyone receiving a full scholarship at a UNC campus.

The provision was never fully aired in public, as most budget items are. That’s because the Senate president pro tem, Sen. Marc Basnight, D-Dare, allowed it to be added to the budget during the final deliberations.

The provision, in short, is a windfall for the athletics-support groups at UNC Chapel Hill, N.C. State University and other schools with major athletic programs. The groups provide athletic scholarships.

When the schools recruit an out-of-state student, they can provide a full scholarship and pay only the in-state rate for that student. That in-state rate, of course, is far below the cost of the student’s education at one of our public universities. The taxpayers pick up the rest of the tab, just as they do for every other resident North Carolinian who attends a UNC school.

But there is a difference between major taxpayer support for a good student from Winston-Salem and a big subsidy for a linebacker from Ohio who may have never set foot inside our state before being recruited. The family of the in-state student has been paying taxes for years to support the UNC system. The Ohio linebacker’s family has been paying taxes to support Ohio State.

Rep. Pricey Harrison, D-Guilford, has filed legislation that by all rights should pass in this year of desperate budget-cutting. She wants to take away that special tuition break for out-of-state athletes. Her bill would continue a similar tuition break for out-of-state students on academic scholarships.

Harrison recently told the Journal that she estimates the potential state savings at $10 million a year. She also said that she has been informed by Senate leaders that they won’t even consider her bill.

That kind of arrogance infuriates the public and undermines public trust in government. There is no way that scholarships for out-of-state athletes should get precedence over the items being cut from our schools and universities. Yet, that is happening.

Sen. Linda Garrou is responsible, in large part, for putting together the state budget. It is time for her constituents to tell her to intercede with the big-time athletic supporters who run the Senate. Our schools and young people should come first, not linebackers from Ohio.

Winston-Salem Journal
The General Assembly’s aggressive spending this decade may cost North Carolina college students important financial aid in coming years.

That is the assessment of Treasurer Janet Cowell, and her calculations look pretty sound.

After the recession early in this decade, legislators raced to catch up on all the spending they’d missed. They freed money for new spending by shifting it among accounts.

One switch took scholarship money out of the General Fund for use elsewhere. Then the scholarship programs were restored with principal from the state’s Escheats Fund, The Associated Press reported.

The Escheats Fund is a repository for money about which North Carolina residents have forgotten. Two common sources are insurance policies that were never cashed and utility deposits that were left behind.
The fund now contains $584 million, and the state constitution says its proceeds must be used to help needy students attend public colleges. But that balance will fall quickly, Cowell said recently, because the General Assembly has been using its principal.

During this fiscal year, the Escheats Fund is expected to provide $210 million in financial aid, some $60 million of that going toward the state’s new EARN Scholars initiative. Low-income students in that program get $4,000 annual grants that, along with other funding, often allow them to graduate from college debt free. It is very possible that every dime involved in the legislature’s money switch went to very worthwhile causes. EARN is a laudable program that, by helping low-income youngsters to attend college, will prove a long-term investment winner for North Carolina.

But sound long-term investments are not built upon spending plans that involve the figurative eating of one’s seed corn. That is what the state is doing here by taking principal from the Escheats Fund. If the fund drops as much as Cowell predicts, it will contain only $83 million in 2011. That will end an awful lot of financial aid.

House Speaker Joe Hackney reacted to Cowell’s warnings by telling the AP that the legislature has the entire legislative session to figure out what to do with scholarships. But “we’ll think of something” is not a reassuring answer when the numbers are so compelling.

That’s especially true when we see record numbers of families applying for financial aid, when the College Foundation of North Carolina reports that parents are withdrawing college savings for non-college reasons and when enrollment at the state’s public universities and community colleges are all rising rapidly.
When the General Assembly figures out what to do, one component should be the return to the policy of using only earnings, and not principal, from the Escheats Fund. To do otherwise is foolish.