Updated 2:45 p.m.
House and Senate Democrats have a handshake agreement on a budget deal after overcoming an impasse over a subsidy for athletic scholarships.
House Speaker Joe Hackney and Senate Leader Marc Basnight met Saturday to break through the wall negotiators had reached over the $10 million scholarship provision and other minor details in an $19 billion budget.
The House wanted to end the five-year-old subsidy, which applies the in-state tuition rate to out-of-state athletes, which means athletic booster clubs have to raise money less money for scholarships.
The budget would eliminate a provision inserted by the House that would have also removed the subsidy for academic scholarship programs.
The budget compromise is expected to be published this evening in time for both chambers to read it in tonight. Votes could come Tuesday and Wednesday.
Other provisions include:
• Elimination of a House proposal to place an enrollment cap on the UNC system.
• A House-initiated plan to capture money from the state lottery to shore up K-12 education.
• A contingency plan in the event $500 million in federal Medicaid money isn't sent to the state. If the money doesn't arrive by January, the plan would call for a 1 percent cut to state spending (not including salaries) and raiding of various reserve funds.
The scholarship issue represents a tiny fraction of the state budget, but it has received a lot of attention over the years.
The big winners are academic scholarship programs like the Morehead-Cain program at UNC-Chapel Hill and the Park Scholarships program at N.C. State University, each of which will retain their subsidy for out-of-state students.
Critics question why the state should help ease the burden on students from other states coming here for college. But officials with those two scholarship programs say that in subsidizing out-of-state scholars, North Carolinians are making their own state better.
One example: nine of the last 10 UNC-CH winners of the prestigious Rhodes scholarship were Morehead-Cain scholars from other states or countries.
"We help UNC compete with the best schools in the country for these students," said Charles Lovelace, executive director of the Morehead-Cain Foundation. "The fact that they go on and have success raises the stature of the university."
That argument makes little sense to State Rep. George Cleveland, the Onslow County Republican who has long lobbied for an end to both athletic and academic scholarships.
"It doesn't make sense to me that anyone outside the state of North Carolina be subsidized by the people of this state," Cleveland said. "We're subsidizing people from Turkey, the United Kingdom, Somalia. This is crazy."
This fall, UNC-CH will enroll 64 new Morehead-Cain scholars; if the foundation had lost the state subsidy, it would have been able to afford just 46, Lovelace said.
This fall, in-state tuition at UNC-CH will be $4,066; out-of-state tuition is $21,954. The foundation generally has about a 50/50 split between in-state and out-of-state scholars.
At N.C. State, the Park Scholarships program would have similarly had to enroll a smaller class if it didn't have the state subsidy, said Eva Holcomb, the program's director.
A class of 50 would have been reduced to about 42, Holcomb said. The Park Foundation, which is based in Ithaca, NY, requires that one-third of the program's enrollees each year be from another state.
"They see a real value in the out-of-state students as contributors to N.C. State and to North Carolina," Holcomb said. "They see it as a real priority."