Public schools in North Carolina are facing billions of dollars in unfunded school construction projects, and a lottery-supported grant program is only able to address a fraction of the requests it receives.
As one of the state’s poorest school districts, Halifax County hasn’t had enough funding to make needed repairs and renovations to its oldest schools. Hollister Elementary School was built in 1960 to serve the small rural community about 70 miles northeast of Raleigh (home to the Haliwa-Saponi Indian Tribe), and the building looks much as it did when it first opened.
Noisy brown window air-conditioning units struggle to keep classrooms at a comfortable temperature. A typical day at an aging school building could include roof leaks, plumbing problems and classrooms that get too hot or too cold. Outside, the playground includes broken swings and a rusty metal slide.
Hollister Elementary Principal Lorane Johnson explains what it’s like to educate young people in a building like this.
"Anything can stop working at any minute," she told WUNC News. "Many of our teachers know how to flip a breaker. We have learned how to work through heating and air challenges, we know how to open windows as necessary. Our kids are resilient, and our staff is resilient because of it."
Students won’t be returning to Hollister and nearby Pittman Elementary School this fall. The schools are being replaced by the new pre-K-through-8th grade Eastman Leadership Academy. The new state-of-the-art campus was funded by about $48 million in lottery revenue.
Halifax County Schools Superintendent Eric Cunningham says the new building will solve a lot of problems. "Your roofs aren't going to leak anymore, so kids won't have to move their desk and put a little bucket down to catch the water," he said. "Those days are gone with this new building, and I'm very proud and grateful for it."
State grant program leaves 80% of applications unfunded
Replacing the two aging schools took so long because Halifax doesn’t have the local tax base to build schools on its own. It’s one of many rural counties that rely on the Needs-Based Public School Capital Fund, which typically funds about $400 million in construction projects each year.
Other proceeds from the lottery are divided up between school districts based on population. While that can help fund construction in larger districts, Nathan Maune with the N.C. Department of Public Instruction says it doesn’t add up to much in smaller districts.
"It's about $70 per student in round numbers, so if you've got 500 students, you're not getting very much money each year," said Maune, who serves as the director of the Office of School Facilities.
The Needs-Based Capital Fund was created nearly a decade ago and prioritizes projects in lower-wealth counties. Districts are more likely to win grant funding if they’re building a new school that consolidates several smaller ones, like the project in Halifax.
"The projects that tend to not score as well are going to be typically small renovation work, roof replacement, building systems — partial renovations," Maune said.
School districts applied for nearly $2 billion from the grant program during the latest funding cycle, so about 80% of those requests didn’t get funded.
The grant program’s budget varies from year to year based on lottery revenue, and that revenue has been under scrutiny from State Auditor Dave Boliek. Boliek's review found that while overall lottery revenue is increasing, its contributions to public education have been stagnant.
"North Carolinians have a reasonable expectation that if the Education Lottery’s ticket sales go up, money going toward our public schools would increase as well," Boliek said in a news release in December. "Over the last three years, total revenues have increased by a total of over $3 billion, while contributions to public education have been flat."
In a response to Boliek's report, N.C. Education Lottery officials said that their profit margins decreased in 2025, but they didn't dispute the auditor's findings or explain why education funding didn't increase.
Stein's construction bond plan goes nowhere
Gov. Josh Stein wants to see other funding sources help support what he estimates is a $10 billion backlog of public school infrastructure needs.
Last year in his State of the State speech, he called on the legislature to borrow money for school construction, arguing that a $4 billion public school construction bond measure is needed because "we need safer, healthier, and more modern schools."
But lawmakers never took action on the proposed bond. Senate leader Phil Berger says he thinks local governments – not the state – should fund school construction.
"I just think that with all of the other things that the state has as its obligations, and the longstanding tradition that we've had, that but for the lottery money, public school construction is a local obligation — that that's something that we need to continue to adhere to," Berger said.
Stein's more recent funding request is more modest than the original bond proposal. His budget proposal this year included $136 million for school construction, much of it coming from the state's primary fund for government construction projects rather than from lottery revenue.
"Every child in North Carolina deserves to learn in a school that’s safe and built for their success, whether they’re in Halifax County or any other county," said Onotse Omoyeni, a spokeswoman for Stein. "When the air conditioning breaks or the roof is leaking, it’s harder for students to focus on learning. We know that North Carolina has more than $10 billion in public school infrastructure needs. That’s why the governor has proposed a budget that funds needed repairs and renovations to public school facilities, and he is eager to work with the General Assembly to ensure all students have safe and fully supported learning environments.”
Budget includes school grants to a few GOP counties
The new state budget continues directing lottery funding to the school construction grant program, but it doesn’t increase the amount.
Stein's request for more school funding to be distributed "evenly" among districts isn't in the budget. But state lawmakers did fund some school construction projects in individual communities, many of them for school athletic facilities in counties represented by Republicans.
Caldwell County — home of House Speaker Destin Hall — will receive $1.2 million for "facility improvements" at three high schools. Mount Airy Schools will receive $3 million for "athletic field improvements." And Haywood County will receive $500,000 to renovate a middle school stadium.
None of the budget allocations for capital projects are headed to Halifax or neighboring low-wealth counties like Warren, Northampton and Hertford that typically elect Democrats.
Back in Halifax County, Superintendent Cunningham says he’s thankful the legislature reduced the matching funds required for the construction grants. But his county still has other facility needs that will require more funding.
"I'm always going to have my hat in my hand — that's just what you do here in Halifax County," Cunningham said.
