Democrat bill: Defund Opportunity Scholarships to fund child care

A group of four Democratic House members filed legislation that would cut nearly $400 million from North Carolina’s Opportunity Scholarship Program over two years and redirect the money to child care subsidies and related priorities.

That move would be a sizable rollback of the school choice expansion the Republican-led General Assembly enacted in 2023.

House Bill 1066, Child Care Stabilization & Affordability Act, was filed April 29 by Reps. Beth Helfrich, D-Mecklenburg; Brandon Lofton, D-Mecklenburg; Lindsey Prather, D-Buncombe; and Julie von Haefen, D-Wake.

The bill would reduce Opportunity Scholarship Grant Fund Reserve appropriations by $150 million in non-recurring funds in fiscal year 2026-27 and by $240 million in recurring funds beginning in 2027-28. The recurring cut would continue indefinitely, with the program’s annual appropriation falling from a scheduled $700 million to $460 million in 2027-28 and from $825 million to $585 million in 2032-33 and beyond. 

The bill directs the cut funds to the Department of Health and Human Services “to be used to assist in reducing the waitlist for subsidized child care in this State.”

Candace Witherspoon, director of the Division of Child Development and Early Education, told a legislative oversight committee in March that the state’s child care subsidy waitlist had grown to 15,512 children as of December 2025, up from 2,164 in July 2024.

Brian Balfour, senior vice president of research at the John Locke Foundation, questioned the framing of the affordability crisis driving the bill.

“The fact that the expiration of the COVID-era daycare subsidies has caused so many daycares to go out of business is a bit puzzling,” Balfour said. “Daycares had survived for generations without the COVID subsidies, but then in just a couple of years of receiving them they can no longer survive without them.”

“Government intervention is so intertwined in the daycare system that it is beginning to become addicted to the subsidies,” Balfour added. “If we want daycare to become more affordable, we should focus on eliminating the forces pushing prices up. Massive subsidies artificially subsidize demand, while mountains of regulations suppress supply — creating a perfect storm for unaffordable prices.”

Beyond the funding cuts, the bill would restore an income cap on the Opportunity Scholarship Program by limiting eligibility to households earning no more than 200% of the federal free or reduced-price lunch program threshold. That change would eliminate the two upper-income tiers, including the universal 45% tier added when the legislature removed all income-based eligibility limits.

The bill arrives weeks after Stein unveiled a recommended state budget that would more aggressively phase out the Opportunity Scholarship Program through a moratorium on new awards and a stricter income cap set at 150% of the federal reduced-price school lunch eligibility level — roughly $90,000 a year for a family of four. 

Carolina Journal previously reported that Stein’s plan would remove an estimated 60,000 students from the program, which currently serves more than 106,000 children. 

HB 1066 includes one Opportunity Scholarship expansion: a new pre-K eligibility track for four-year-olds whose principals certify them ready to enroll for the following school year.

Balfour also took issue with the bill’s funding mechanism — using cuts to a school choice program to underwrite payments to private child care providers.

“Opponents of the Opportunity Scholarship program often say it’s wrong for taxpayer dollars to go to privately owned schools, but this bill redirects some Opportunity Scholarship money to go to privately owned daycares,” Balfour said. “If one is wrong, why is the other OK? School choice opponents’ actual main objection is that choice offers children an escape from the one-size-fits-all public school monopoly and dilutes the education establishment’s control over the flow of information to our children.”

At a House Democratic Caucus press conference on April 22, Lofton said the legislature had “passed a budget that put more money into private school vouchers” than into teacher raises.

“We’ve actually increased automatically the money going to private school vouchers,” he said. “This year, I think it’ll be over $600 million that we will spend on private school vouchers.”

The bill also includes $205 million in recurring funds to set child care subsidy reimbursement rates at the 75th percentile of the most recent Child Care Market Rate Study, makes the Tri-Share Child Care Pilot Program permanent at $9 million per year, reenacts the state child tax credit at doubled amounts, expands the Child Care WAGE salary supplement program, and creates a state-run health coverage pool for child care employees with $35 million in recurring rebate funding.

An additional provision would direct an automatic annual adjustment to subsidy reimbursement rates beginning July 1, 2027, indexed to whichever is greater of the regional Consumer Price Index or the most recent market rate study. That provision specifies the increases “shall not require further appropriation or legislative approval.”

The legislation tracks closely with recommendations from the NC Task Force on Child Care and Early Education, established by Stein by executive order in March 2025. That task force is co-chaired by Lt. Gov. Rachel Hunt, a Democrat; and Sen. Jim Burgin, R-Harnett. The task force’s 2025 reports called for setting a statewide subsidy reimbursement rate floor, expanding workforce compensation programs, exploring tax credits for families, and pursuing public-facility use and public-private partnerships for child care. Each of those priorities is reflected in HB 1066.

HB 1066 was referred to the House Committee on Rules, Calendar, and Operations. That’s the same committee where, von Haefen said at a separate April 21 press conference, her seven prior bills to fund the Leandro public school remedial plan have all died without a hearing.

“Democrat bill: Defund Opportunity Scholarships to fund child care” was originally published on www.carolinajournal.com.