This article is Part 4 of a series that examines the policy prescriptions coming from the left-wing group Carolina Forward. With North Carolina at a crossroads, it’s a good time to evaluate the sort of policies advanced by those who desire to move our state in a more “progressive” direction.

You can read the complete introduction in Part 1 here, responses to their recommendations regarding population shifts, housing, and transportation in Part 2 here, and an evaluation of their recommendations on health care and public education in Part 3 here.

This article focuses on Carolina Forward’s recommendations for North Carolina regarding public finance and the rural/urban divide.

Public Finance

Carolina Forward’s public finance section hits the reader with misleading claims, important omissions, and self-contradiction right out of the gate.

In the section’s first paragraph, the author highlights the significant tax reforms that began in 2013, cutting income taxes that had topped out as the highest in the Southeast to a low, flat rate (with a generous standard deduction) and placing the corporate tax on a path to zero.

The report begins by insisting that “[t]hese tax cuts very disproportionately benefited higher-income earners and corporations.” But this claim is misleading. In terms of dollar amount, those who pay sizeable tax bills will of course receive a larger reduction than those who pay very little to no taxes already. As a percent reduction of taxes paid, however, a strong case could be made that middle- and lower-income taxpayers benefited more. In particular, the steady increase in the state’s standard deduction moved perhaps hundreds of thousands of low-income households to a zero-tax liability. This benefit goes unmentioned.

Moreover, corporate taxes don’t just benefit “corporations.” As has often been said, corporations don’t pay taxes, people do. Ample research has shown that the majority of benefits from a corporate tax cut go to workers. Corporate taxes eat away at a company’s bottom line, forcing it to cut expenses, and the biggest expense of most companies is payroll, meaning corporate taxes have a depressing effect on worker wages.

As a result of these tax reforms, according to the report, “the state shifted more of the state’s financial burden to consumption taxes like the sales tax.” According to state controller reports, last year the individual income tax made up 51.5 percent of total state tax collections, compared with 33.6 percent for the sales tax. In Fiscal Year (FY) 2012, the year before the reforms in question, the ratio was 55.6 percent to 28.5 percent. A change, to be sure, but not necessarily a sizeable “shift.”

Moreover, heavier reliance on a tax on consumption can reap benefits for the state because consumption tax revenue is more stable than individual and corporate taxes, which are far more volatile when the economy experiences boom and bust cycles.

The second paragraph isn’t any better. The report points out that legislators have “pointed to a growing economy and large nominal budget surpluses as proof of success” for tax reforms but then insists that these claims are “misleading.”

Here’s where the contradiction comes in. The report downplays North Carolina’s economic growth by saying it “actually under-performed many other nearby states,” but in the very next sentence writes that the “surpluses have largely resulted from underinvestment and a strong economy” (emphasis added).

Somehow, North Carolina’s economy is simultaneously underwhelming and underperforming the economies of neighboring states while also being robust enough to create substantial surpluses.

Moreover, the correlation between years of tax cuts and surplus-creating economic growth is ignored. Recent data show North Carolina’s economic performance to be stronger than Carolina Forward is willing to admit. For instance, according to this Carolina Journal article, from “mid-2016 to mid-2026, North Carolina posted a 17.3% increase in employment, larger than the national average of 9.9% and the employment gains of our neighboring states of South Carolina (17%), Tennessee (13.7%), Georgia (13.6%), and Virginia (8%).” The article adds that North Carolina “also experienced a 20% real gain in personal income per North Carolinian over the past decade, again beating the national average and most of our neighbors.”

The report then warns of a “looming fiscal cliff” coming in the next several years due to low tax rates supposedly being unable to generate sufficient revenue. But critics of tax cuts have been warning of this problem since 2013 and have been wrong by orders of magnitude. Indeed, in the decade following the 2013 tax cuts, backing out the Covid year, the state budget experienced more than $12.6 billion in surpluses.

The report includes a chart predicting a revenue shortfall for the current FY 2026–27, but even since the Carolina Forward report was published last November revenue projections have been revised upward by more than $700 million.

With such an abysmal predictive track record, there’s no reason anyone should take Carolina Forward’s “fiscal cliff” warnings seriously.

The report then claims that because the state has “not supported school capital funding, county governments have been forced to raise property taxes to build schools.”

This is a major oversight because in North Carolina, school construction costs have traditionally — and by statute — been the responsibility of county governments. Specifically, G.S. 115C-408(b) states: “It is the policy of the State of North Carolina that the facilities requirements for a public education system will be met by county governments.”

Despite this clear directive, the state created the Needs-Based Public School Capital Fund, the Public School Building Capital Fund, and the Public School Repair and Renovation Fund, which are financed primarily with lottery revenue and direct money to local governments to aid in public school capital expenses. The current year’s state budget appropriated more than $400 million to these funds.

Arguing that the state is somehow shirking its responsibility (which, according to statute, it does not have) to support school capital funding is either highly misleading or willful ignorance. Neither option reflects well on this report.

The report then suggests that the state should provide more funding to county governments, in large part because the state has more tools to raise revenue (i.e., income, corporate, and sales taxes) compared with local governments that rely very heavily on just the property tax.

Funding could then be distributed across counties more “equitably,” according to the report. The author does not, however, explain why taxpayers in Brunswick or Dare County, for example, should be forced to finance local amenities in Watauga or Buncombe County.

This suggestion further exemplifies the emphasis by Carolina Forward on the principle of more centralized, top-down control of people across this diverse state.

Based on the report’s misguided analysis of North Carolina’s economy and public finances, it comes as no surprise that its recommendations would hurt, not help, our state’s economic growth and working families.

“Rebalance the Tax Code for Adequacy and Fairness”

This phrase is a euphemism for raising taxes. Specifically, the report calls for “pausing” scheduled personal income tax rate reductions and maintaining the state’s corporate tax instead of allowing it to zero out. How much these moves would cost taxpayers isn’t specified, but we can get some indication from Gov. Josh Stein’s FY 2026–27 budget recommendation, which projects that freezing the individual income tax rate at 3.99 percent and keeping the corporate tax rate at 2 percent would drain roughly $20 billion out of the state’s economy over the next five years. Such a significant tax burden would weaken economic growth and job creation, disproportionately harming low-income households.

“Increase State Investment in State-Level Responsibilities”

Here the report echoes its call for more state spending to be sent to local governments. The claim is that it would help localities fill funding gaps created by a supposed decrease in state support, but that implies that increases in state support will not be offset by lower local government spending. Instead, increased state spending will supplement spending by local governments. The report does not give a price tag for how much this additional spending would cost state taxpayers, but it does recommend fully funding the Leandro decision regarding public school funding, which itself was originally estimated to cost more than $6.8 billion over eight years.

The report also recommends increasing (by an unspecified amount) funding to local governments for local infrastructure. The state is already heavily involved in such funding, but to Carolina Forward no amount of government spending will ever be enough. This recommendation is consistent with the report’s prevailing theme of calling for more spending of taxpayer dollars with no estimate of what the recommendations would cost while refusing to acknowledge the negative effects of raising the tax burden on North Carolina workers and entrepreneurs.

“Improve Fiscal Planning and Collaboration”

“Establish a state-local government commission or task force to study the allocation of costs” is the recommendation here. Basically, this recommendation represents a desire for the state to send more taxpayer dollars to local governments. Once again, the report offers no specific amount of spending or cost-sharing, making this just another recommendation for a blank check that taxpayers would be forced to cover.

Rural/Urban Divide

This section rightly points out that economic and population growth in North Carolina has not been spread evenly throughout the state. While urban centers like Raleigh and Charlotte have seen rapid increases in both categories, many rural parts of the state are losing population and, as a result, suffer from shrinking economies. This much is true, but North Carolina is far from unique in this regard.

This rural/urban contrast is problematic, according to the report’s author, primarily because of negative “perceptions” that rural communities may harbor against thriving metro areas.

The divide also manifests itself politically, as rural counties tend to be more Republican, while urban centers — and increasingly suburban communities — tend to be more Democratic. The tension between the interests of these “two Carolinas” threatens the state coming together to support “a statewide vision for growth,” according to the report. Once again, Carolina Forward’s preference for a singular, top-down, and centralized plan to be imposed across the state is made clear.

The report’s policy recommendations to ensure that the benefits of economic growth are “shared” among urban and rural communities alike involve increased government micromanagement of the economy and ever-increasing government spending.

“Deliberately Share the Benefits of Growth”

The main recommendation here is to focus more corporate welfare programs in rural areas. The blatant unfairness of forcing taxpayers to fund politically connected businesses is not addressed. Moreover, this recommendation is still further evidence of the report’s prevalent desire for greater central planning of the state’s economy through empowering politicians and government bureaucrats to pick winners and losers in the marketplace.

The report also ignores the terrible track record of government “economic incentive” programs. A 2025 brief by the John Locke Foundation reported that more than 80 percent of grants from North Carolina’s largest incentive program that have concluded ended in failure to produce the promised number of jobs.

“Invest in Rural Infrastructure and Human Capital”

The word “invest” is used a lot in this report, but it’s important to remember that its use of this term really just means “force taxpayers to fund something.” This recommendation seeks more taxpayer dollars to fund high-speed internet in rural areas, along with a “significant” increase in funding for rural public schools and community colleges. Internet access is already near universal, even in rural areas, and with companies like Starlink providing affordable internet virtually anywhere, a government program does not seem necessary here. Moreover, low-income, mostly rural public school districts already receive — on average — higher amounts of funding per pupil than higher-income urban school districts. According to the most recent data from Best NC, the least affluent school districts in the state received 24 percent more funding per pupil from the state than the most affluent. It’s a significant oversight for the report not to acknowledge this fact.

The report also recommends rural areas “expand access to renewable energy where possible to attract new industry.” This is nonsensical because renewable energy is more expensive and unreliable than traditional forms of energy. Why new industry would be attracted to nondispatchable and more costly forms of energy goes unexplained.

“Foster Rural/Urban Partnerships”

The recommendations here are quite vague, suggesting “collaboration” between urban and rural areas “to develop common issues like transit connections, supply chain development, or tourism trails.” No further specifics are mentioned. Also included is a suggestion to “promote” idea exchanges between experts from rural and urban communities. How these exchanges are supposed to be “promoted” is not specified, but one can speculate the taxpayers would be footing the bill.

The report also recommends that political leaders from both rural and urban communities should be included in “advisory councils for major state initiatives,” but there’s no evidence presented that this isn’t already happening.

“Craft a Unifying Narrative”

Here the report recommends that state legislators and other leaders “should intentionally frame policies in terms of One North Carolina, emphasizing how every region contributes to the state’s success.” Once again, there’s no evidence presented that this thinking is lacking or otherwise opposed by current popular rhetoric. Nevertheless, the author insists such rhetoric would somehow bridge divides between communities he already acknowledges have very different and at times conflicting challenges and needs.

Conclusion

This series of articles has taken a closer look at what is presented as a vision for North Carolina’s future by the “progressive” group Carolina Forward. It’s sold as a package of policy prescriptions to ensure a “shared prosperity” for the citizens across our state.

What it delivers, instead, is a mostly vague list of demands for unchecked government growth and unaccountable spending of taxpayer dollars. Making matters worse, it provides no estimates detailing how much each of their initiatives would cost taxpayers and fails to recognize the negative consequences that would follow the massive tax hikes that no doubt would be required to fund this wish list.

It is also telling that the subtitle to the report includes the phrase “harnessing growth.” To harness something means to control it. So, who should “control” the growth of North Carolina, both its economic and demographic growth? Carolina Forward clearly provides the answer: politicians.

While the report is correct in diagnosing many of the challenges facing North Carolina, its prescriptions not only miss the mark but would make things worse. Just because something is not right does not mean government is the best means to make it right. Indeed, most of the time society’s — and the economy’s — problems are caused by government interference in the first place.

Regardless, more government control over our paychecks, education, health care, transportation, and much more is the consistent theme throughout this report. This vision lies in stark contrast to the vision of the John Locke Foundation, which prioritizes individual freedom and the removal of government barriers to ensure North Carolinians flourish. Free markets and voluntary cooperation should take precedence over coerced taxation and government mandates enforced by threats of punishment.

The vision for North Carolina’s future should be shaped by its people, not its government.

The post The fight for tomorrow: Assessing conflicting visions for North Carolina’s future, Part 4 appeared first on John Locke Foundation.

Matthew Continetti explores the potential long-term impact of Republican losses in this year’s US Senate races.

Impeachment may be the least of Mr. Trump’s worries. After all, he’s been through it twice. What he hasn’t experienced is full Democratic control of Congress. It would make all his problems worse.

The president might believe he would be able to dismiss a Speaker Hakeem Jeffries as a nuisance, as he did Speaker Nancy Pelosi in his first term. He won’t have that luxury if Chuck Schumer is also Senate majority leader. A Democratic Senate would be impossible to ignore.

Nor would the pain end for Republicans when Mr. Trump leaves office. Senate elections have a long tail. Six-year Senate terms are spread across presidential administrations, giving senators many chances to serve in the majority, influence policy and cast defining votes.

The senators who win this year won’t be up for re-election until 2032, the end of the next presidential term. They will become the base of support for, or a bulwark against, the legislation and appointments of Mr. Trump’s successor. Some may try to become that successor.

This has happened before. Democrats netted six seats in 2006 and gained Senate control. Sherrod Brown, Bob Casey Jr., Claire McCaskill, Jon Tester, Jim Webb and Sheldon Whitehouse opposed George W. Bush during his last years in office, for sure. But their true impact wasn’t felt until 2009, when they voted for President Obama’s stimulus bill and ObamaCare.

Conversely, Republicans gained nine seats and a Senate majority in 2014. The class of ’14 included conservative stars Ben Sasse, Tom Cotton and Joni Ernst, who helped sustain Majority Leader Mitch McConnell’s 2016 hold on Merrick Garland’s nomination to replace Justice Antonin Scalia. And when Donald Trump became president, they all voted for Mr. Trump’s Supreme Court nominees and the Tax Cuts and Jobs Act.

The post Damage from GOP Senate losses would extend beyond Trump term appeared first on John Locke Foundation.

Mackenzie Eaglen assesses the need for long-term action on Pentagon reform.

The Pentagon bureaucracy has historically proved resistant to sustained change despite repeated reform efforts. Institutional incentives tend to favor continuity over experimentation, reinforcing a risk-averse culture that limits rapid innovation, agility, and adaptation. Combined with political challenges across Washington, this has often stifled well-meaning efforts at defense reform.

The Trump administration and its leadership team in the Pentagon have begun yet another drive for change aimed at making goods, tech, and services better, faster, more abundant, and cheaper. While most of these reforms are individually necessary and overdue, combined, their pace and volume risk overwhelming the workforce required to implement them. The risk is that the volume, pace, and scale of change being imposed will foster inaction over risk-taking due to uncertainty, fear, turnover, and disjointedness.

This report analyzes almost 300 changes to the Pentagon from January 2025 to June 2026. It examines what policy areas are targeted, which part of the government is executing the change, and the level at which reform has been implemented. By quantifying reforms to acquisition, supply chains, the relationship between the Pentagon and the defense industry, workforces, the defense budget, and force structure, this report demystifies the churn and explains what could move the needle.

Staying above water in the flood of defense reform means achieving reform that lasts to avoid a series of similar repetitive efforts later. Lasting, successful reform is binding and supported by both political parties, multiple administrations, and those in uniform. It prioritizes revolutionary initiatives over many small, individual efforts or guidance. It measures not ideas but outcomes, and it changes incentives and processes. Sweeping reform also alters the Pentagon’s rigid budgetary structures and adjusts the flow of resources.

Serious defense reform is overdue, and the latitude for disruptive action is now. … Implementing these recommendations and making them last will ensure the War Department is prepared to deter or win a conflict against a formidable peer adversary that has not similarly fallen into complacency.

The post Locking in long-term reforms for American defense appeared first on John Locke Foundation.

Angela Stent and Daniel Hamilton scrutinize the American response to two dangerous enemies.

When Chinese President Xi Jinping enjoyed an elaborate state dinner at the White House in September, one of the most important items—China’s relations with Russia—was not on the menu. It was an odd omission by his American host: Both China and Russia are supporting Iran, and Beijing is the key enabler of Moscow’s war against Ukraine.

More broadly, Beijing and Moscow have united to oppose American primacy and replace it with a “post-West” order, a joint goal that they touted yet again at the recent BRICS summit in New Delhi. Xi’s “no-limits” partnership with Russian President Vladimir Putin damages U.S. interests and constrains U.S. global influence. Their alliance enables both Xi and Putin to deal with U.S. President Donald Trump from a position of greater strength.

Early in Trump’s second term, the White House defended its desire to improve ties with Russia because it hoped to engineer a so-called reverse Nixon and pry Moscow away from Beijing. That argument disappeared because the strategy failed. Despite the president’s vow to “un-unite” Moscow and Beijing, his administration seems to have concluded that there is little it can do. In fact, Trump’s tariffs, sanctions, and war against Iran have pushed Russia and China even closer together.

It is time for the United States to reassess its passive approach to the two powers that most threaten U.S. interests and values. Given the depth and breadth of the Russia-China alliance and its centrality to both Putin and Xi, Washington cannot easily drive wedges between its two main antagonists, much less pit them against each other like the reverse Nixon argument suggests. Washington should avoid the false choice between a grand realignment on the one hand and a solidified China-Russia partnership at the United States’ expense on the other.

The post Addressing the dangerous Russia-China alliance appeared first on John Locke Foundation.

Hal Brands ponders President Donald Trump’s recent actions involving Russia and Ukraine.

President Donald Trump’s deal to purchase diesel fuel from Russia is a moral outrage: It rewards an aggressor that is terrorizing Ukrainian cities with drones and missiles, while punishing the victim for fighting back. Its economic benefits for America will be modest at best. Above all, the deal is sadly indicative of a deeper failing in Trump’s Ukraine policy. The president genuinely desires peace in that country. But his strategic blinders and indiscipline keep making that task harder.

The details of the deal are dispiriting. The US has agreed to temporarily lift sanctions so Russia can bring around two million barrels of diesel to market immediately (with around 13 million barrels committed in total), in hopes of driving down prices at the pump in the US before the midterm elections next month. The deal follows growing US frustration with Ukraine’s drone and missile strikes on Russian energy infrastructure, which have added to stress on global markets. It isn’t clear that the agreement will ease that pressure, given that the volumes involved are relatively small and the real problem in global energy markets is the president’s war with Iran.

But the deal will have a strategic impact, by weakening the push to cut Western purchases of Russian energy. It threatens to undo a year’s worth of European efforts to convince Trump that Russia, not Ukraine, is the primary obstacle to peace. And it creates a perverse scenario in which Trump fills the coffers of a neo-fascist autocracy while penalizing Ukraine for targeting Putin’s war economy in self-defense.

A bipartisan group of senators has already condemned the deal. Trump has defended it and announced an “energy ceasefire” between Ukraine and Russia—a breakthrough more imagined than real.

Whatever comes of this episode, it illustrates how election-year incentives and economic blowback from the Iran War are affecting US foreign policy in theaters far beyond the Middle East. It’s also a window into the frustrations of Trump’s bid to end the war in Ukraine.

The post Trump has no path to peace in Ukraine appeared first on John Locke Foundation.

Tim O’Brien writes for PJMedia.com about the latest shenanigans of the political left.

If you think you’ve been seeing the term “lifelong Republican” bandied about in some of your social media and legacy media content lately, it’s no accident; it’s by design. You are the target of this very comprehensive leftist demoralization campaign.

We’ve talked before about how the left uses polls to suppress Republican turnout and voting. The left has had its 2026 voter suppression polling machinery in place for some time. What’s emerging fast and hard is this term that clearly has come out of some of their own attitude research: “lifelong Republican.”

Apparently, the term is performing quite well in Democrat research when coupled with related content on how said “lifelong Republican” is dissatisfied with President Donald Trump, his administration, and Republicans in general. By “performing quite well,” I mean it’s effectively working to give Republicans pause and perhaps influence them to give up on voting in the midterms.

You may not be giving up, and we’ll get to what you can do about all of this in a moment, but based on how the Democrats are using this term to suppress the Republican vote, it is very likely working on people you know.

To be sure, it’s not just a social media campaign. Pay attention to how the legacy media is assembling live focus-group style panels of voters that include “lifelong Republicans” who inevitably will express their frustration with the president, and oddly, decide they now have gone full Democratic Socialists of America (DSA). Seriously, no matter how unhappy he or she is with gas prices, no lifelong Republican is going to do an about-face and go full commie.

But that is not what the legacy media and the left want you to think. Make no mistake, the cable networks and all of the major legacy news media are in on this one. This is a coordinated effort to suppress Republican turnout.

The post Left unleashes its canned ‘lifelong Republican’ campaign appeared first on John Locke Foundation.

• Microschool founders and operators report facing a number of regulatory barriers, including land use and zoning regulations and permits, that limit their growth
• Utah shows how states can encourage the growth of microschools by addressing zoning and occupancy barriers in state law, while the town of Gibsonville, North Carolina, shows how local communities can do something similar in their municipal codes
• Policymakers can also examine Learning Pod Protection Acts from states like Tennessee and Texas for ways to loosen regulatory burdens that may not be applicable to microschools

School choice has been receiving a lot of attention lately. Earlier this month, the U.S. Department of the Treasury released regulations that provided some much-needed clarification on how the Federal Tax Credit Scholarships will operate in 2027. North Carolina has opted to participate in this program next year.

Meanwhile, at the state level, participation in North Carolina’s Opportunity Scholarship and ESA+ programs has reached record levels (see here and here, respectively), and enrollment in private schools is higher than ever.

Are there enough seats in private schools to satisfy such demand? One way to increase seat capacity is to address barriers preventing microschools from opening and expanding to meet the needs of students and families. States like Utah and West Virginia show North Carolina how to do so.

Defining microschools and identifying the barriers they face

What are microschools? As the John Locke Foundation’s “Room to Grow” report explains,

Microschools typically involve “a small group of families bringing their children together to be taught by one or a few dedicated educators.” They are different from homeschool co-ops, which tend to be parent directed, and because of their small size, they can offer the personalized education that many families want. Some consider microschools to be a revival of the one-room schoolhouse.

Microschools became popular during the Covid-19 pandemic and have remained so, but a number of barriers stand in the way of their growth and expansion. In a 2025 survey by Locke and EdChoice, education entrepreneurs identified land use or zoning regulations and permits as common policy constraints to starting or expanding schools.

Regulations/Policy constraints facing ed entrepreneurs in North Carolina

Source: “Room to Grow: Evaluating Private School Readiness for School Choice Demand in North Carolina”

Given growing private school enrollment and participation in school choice programs, it’s more important than ever to address the barriers facing microschools so that they can grow and expand to serve more students.

Addressing zoning and occupancy barriers in state law

States like Utah show how policy reforms can help address some of the barriers that limit the supply of microschools. One way is by amending zoning laws and ordinances to recognize microschools as a permitted use in more areas.

In Utah, state law defines a “home-based microschool” as a person or group of people registering as a business and providing K–12 educational services for compensation to no more than 16 students meeting in a home or other residential property. Daycares are specifically excluded from this definition.

Utah law also defines a “micro-education entity” as a person or group of people registered as a business and serving no more than 100 students. Daycares, home-based microschools, private schools, and schools operating within the public education system aren’t included in this definition.

Crucially, Utah law states that home-based microschools and micro-education entities “shall be considered a permitted use in all zoning districts within a county.” This makes it easier for microschools to find a suitable location from which to operate, which can be difficult when most zoning laws and ordinances weren’t designed with entities like microschools in mind.

A bill similar to Utah’s law was introduced in California this year but has not progressed out of committee. In its original form, the bill would have defined microschools (serving 16 or fewer students) and micro-education entities (serving between 16 and 101 students) in state law. It would have permitted microschools to operate on any land allowed for residential use and allowed micro-education entities to operate on any land zoned for “residential, mixed-use, commercial, or industrial use.” Microschools would have been subject only to residential building and fire codes, rather than the educational ones by which larger, traditional schools must abide.

Addressing zoning and occupancy barriers in municipal code

In the absence of microschool laws at the state level, one community in North Carolina has taken matters into its own hands. In 2025, the town of Gibsonville, North Carolina, amended its zoning ordinances to define a “micro school” as “[a] deliberately small community-based learning environment, with typical small class sizes operating outside of the traditional school system designed to prioritize personalized learning, flexible instruction, and values-based education.”

The ordinance allows microschools to operate within “designated commercial zoning districts,” such as those zoned for light office, neighborhood business, and shopping center use. It also clearly spells out the development standards for microschools, including relevant building and fire safety standards, parking requirements, and noise restrictions. Assuming that microschools meet the standards in the ordinance, the city will allow them to operate by right in the designated zones without requiring them to have a special conditional use permit.

Gibsonville’s actions show that local communities can take steps to promote entrepreneurship and innovative educational options even when state laws are unclear or outdated.

Drawing from Learning Pod Protection Acts

Learning pods are similar to microschools but seem to be slightly less structured or formal. During and immediately after the Covid-19 pandemic, Tennessee, Texas, and Georgia all moved to address and protect microschools in state law.

Tennessee’s law defines learning pods as “a voluntary association of parents choosing to group their children together at various times or places to participate in or enhance their children’s kindergarten through grade twelve (K-12) education, regardless of whether payment is made for any services provided to the children participating in the learning pod.” It also specifies that a learning pod is not a nonpublic school and exempts learning pods from state and local regulations governing educational facilities (class size and teacher licensure requirements, fire and building codes applicable to schools, etc.).

Similarly, Texas law defines learning pods and exempts them from local regulations governing schools and child-care facilities (including building and fire codes).

In Georgia, learning pods are seen as providing ancillary or supplemental educational services. Like in Tennessee and Texas, however, they are exempt from certain regulations, in this case those relating to operating a child-care center or day care.

In all these states, learning pods remain subject to regulations governing the facilities where they meet, even though they are exempt from many school-specific requirements.

Although enacted in response to the pandemic, these Learning Pod Protection Acts still offer a useful model for policymakers. By recognizing the nontraditional nature of learning pods and exempting them from regulations designed with traditional schools in mind, they encourage more microschools to open or expand.

Conclusion

Locke’s “Room to Grow” report suggests several ways to increase the supply of private schools and microschools so that North Carolina can accommodate growing demand. Policymakers in North Carolina could help meet this demand by defining microschools in state law, removing zoning and occupancy barriers that limit their growth, and exempting them from regulations that are unnecessary or inapplicable.

The post Removing regulatory roadblocks to help microschools grow appeared first on John Locke Foundation.

• The Education Freedom Tax Credit establishes a dollar-for-dollar tax credit of up to $1,700 for taxpayers who make donations to scholarship granting organizations (SGOs)
• Scholarships can be awarded to students in private and public schools and can be used for a variety of educational expenses
• Federal regulations give SGOs latitude in setting how dollars will be distributed, and states are prohibited from imposing regulations on SGOs that are more restrictive than federal ones

In July 2025, the Education Freedom Tax Credit Scholarship (EFTCS) was approved as part of the Trump administration’s One Big Beautiful Bill Act. Earlier this month, the U.S. Department of the Treasury released long-awaited proposed regulations for the first-of-its-kind federal school choice program. The program empowers families to enrich and improve the educational experience of their children and in so doing has brought hope to millions. What follows is a primer on what we know to date about EFTCS.

What is the Education Freedom Tax Credit?

The tax credit incentivizes taxpayers to donate money to organizations that grant scholarships to school-age children. The incentive is a nonrefundable, dollar-for-dollar tax credit of up to $1,700 on federal taxes. Married couples filing jointly can claim a credit up to $3,400. Contributions must be cash and cannot be earmarked for specific students. There is no annual nationwide cap on the number of donations. Unused credits carry forward for up to five years. States must choose to participate in the program in order for students to receive scholarship funds, but donors can contribute to any eligible SGO and receive the tax credit whether their state has opted in or not. Scholarship granting organizations (SGOs) that are certified by the state will distribute scholarships to students in public and private schools. Scholarships can be used to pay for a variety of educational expenses for students.

Why are federal tax credit scholarships significant?

The EFTCS has the potential to infuse billions of dollars into the nation’s education system. The exact dollar amount depends on how much money American taxpayers donate to SGOs. Recent national estimates from the American Federation for Children (AFC) found that if only 5 percent of eligible donors participate, the tax credit would raise $13.2 billion in 2027 for K–12 scholarships. Contributions from 10 percent of eligible donors nationally would raise $26.3 billion, and contributions from 20 percent of eligible donors would raise approximately $52.6 billion in K–12 scholarships, which would exceed federal spending on Title I and IDEA (special education) combined by billions of dollars.

 AFC also estimated how much money each participating state could raise. According to the report, North Carolina has 3,727,886 eligible taxpayers who could claim a full or partial tax credit. If 5 percent of eligible taxpayers contributed, $404.9 million would be raised. Twenty percent participation would raise $1.6 billion. That is about equal to the value of all K-12 federal grants for the public schools in North Carolina for 2025–26. Equally important, the EFTCS has the power to revolutionize education and be a lever of transformation and reform both for public and private education.

Who is eligible to receive scholarships?

Students in public and private schools are eligible for EFTCS funds. To qualify for a scholarship, students must be eligible to enroll in a public elementary or secondary school and also reside in a state where the governor has opted in to EFTCS. According to the EFTC Credit website, 31 states have either opted in to EFTCS or are on track to do so. In addition to these requirements, the household income of applicants for the prior year must not exceed 300 percent of the area’s median gross income (adjusted for family size).

Any student whose family participates in federal benefit programs for food, cash assistance, and subsidized housing, including SNAP, TANF, WIC, Section 8, and SSI, are also automatically eligible for EFTCS without needing to show any other income paperwork. In addition, foster children receiving tutoring or special education services from schools located in low-income areas are also automatically eligible.

What can scholarship funds be used for?

The law allows scholarship dollars to cover a variety of expenses at public, private, and religious schools. Students at private schools will be able to use scholarship funds to pay tuition, room and board, tutoring, services for students with disabilities, books, supplies, equipment, transportation, and educational technology. Since public schools do not charge tuition or room and board, acceptable expenses could include tutoring, after-school programming, testing, summer programming, and extended-day services. Options for using the scholarship funds are expected to vary to fit the child’s unique academic needs or the focus of a particular SGO.

How will scholarship funds be distributed?

According to the law, scholarship funds in each state will be distributed by scholarship granting organizations (SGOs). The law states that the governor of each participating state must compile a list of SGOs that are authorized to accept donations from taxpayers. To be approved, SGOs must comply with all federal and state laws. SGOs are tax-exempt organizations that serve as intermediaries between donors and scholarship recipients. An SGO must be a 501(c)(3) public charity. It must spend at least 90 percent of its income on scholarships and serve at least 10 students who don’t all attend the same school. According to the latest regulations, each state has until Feb. 27, 2027, to submit a final list of approved SGOs.

What conditions govern how SGOs distribute scholarship money?

SGOs are free to design the conditions of their own scholarship programs, raise money from donations, vet recipients, process applications, and distribute funds. SGOs must also comply with federal laws, IRS oversight, and state reviews. The IRS has made the primary responsibility of the states to decide whether to participate and to provide a list of SGOs operating within state lines. States will have to certify that SGOs meet state requirements for charitable organizations and make annual audits. IRS regulations stipulate that states won’t be able to write state laws that are more restrictive than the requirements laid out for SGOs in federal law.

What does that mean? States will not be able to direct funding to just one type of school or to a specific program. States also will not be able to require that private schools receiving public funds abide by accountability requirements like state testing mandates. Decisions regarding populations to be served, income requirements, testing, administration, and the like will be made by the SGOs.

Does the tax credit take money from local public schools in North Carolina?

No, the tax credit does not divert money from local and state taxes, which comprise approximately 90 percent of public-school funds in North Carolina. The EFTCS encourages voluntary charitable giving from American taxpayers to support educational services for qualifying students from a variety of public and private schools. This is a new funding source that does not draw from existing federal programs.

What questions still remain unanswered?

The regulations released in early October by the U.S. Department of the Treasury are only proposed regulations. Many questions remain unanswered. These include: What are legitimate educational expenses for public-school students? Can students attending pre-K programs receive scholarships? Are homeschoolers eligible for scholarships? How much flexibility do states have in establishing SGOs and the conditions under which they operate? Does the Department of Education have any role in administering EFTCS? Is there a limit on the size of a scholarship? Look for answers to these and other questions in the coming weeks.

Where can I go for additional information about federal tax credit scholarships?

For additional information about EFTCS, see here, here, and here. Information about EFTCS in North Carolina specifically can be found here.

The post Education Freedom Tax Credit Scholarship: What is it and how does it work? appeared first on John Locke Foundation.

The latest edition of Hillsdale College’s Imprimis features Kimberly Strassel’s assessment of a dangerous political movement’s growing popularity.

Of the many alarming statements uttered this past year by America’s rising tide of “democratic” socialists, pay closest attention to the one that landed in early August, via the godfather of this modern movement, Vermont Senator Bernie Sanders.

Democratic political strategist James Carville had criticized Hasan Piker, the socialist provocateur who claims that “America deserved 9/11,” that the terrorist group Hamas is “a thousand times better” than Israel, that communist Mao Zedong (whose policies killed 65 million Chinese) is “one of the great leaders of this world,” and that his critics are “rabid, ultra-Zionist pigs.” Carville made clear: “I have no intention of ever being in the same political party with [Piker],” adding that he believed “an overwhelming majority of Democrats agree with me.”

Sanders shot back: “If Mr. Carville doesn’t want to be in my party, the party I belong to, that Piker, that [Michigan’s socialist-aligned Democratic Senate candidate] El-Sayed belongs to, he can start his own party.”

The “my party” construction is striking, given that Sanders has long expressed contempt for both our major political parties, disparaging them as captured interests. Since his first successful election in 1981, he has styled himself a “democratic socialist” and run as an Independent on the Vermont ballot. He’s endured the Democratic Party only to the extent that it allowed him to leverage its resources to his advantage—caucusing with it in the Senate to gain seniority and using it as a platform for his presidential runs. Always while holding his nose.

But things have clearly changed. Sanders is done raging against the machines. His goal now is to own and operate one of them. His growing army of democratic socialists are working to capture the Democratic Party from within, replace its agenda with their own, and purge it of dissenters. It’s a time-worn tactic: if you can’t beat them, infiltrate them. And the elected leadership of the Democratic Party is doing nothing to stop the takeover.

The post Documenting the rise of democratic socialism appeared first on John Locke Foundation.

M.D. Kittle writes for the Federalist about a disturbing report involving major American banks.

Major financial institutes were “debanking” all manner of right-of-center individuals and organizations during the Biden years, a scary era of prosecution and persecution of the left’s political enemies. 

Bank of America, JPMorgan Chase, U.S. Bank, Citibank, Wells Fargo, and several other mammoth U.S. financial institutions cited “reputation risk” in denying service to American consumers between 2020 and 2025, according to a damning new report issued by the Office of the Comptroller of the Currency (OCC). The 45-page report titled, “Debanked: Guaranteeing Fair Banking for All Americans,” is an indictment on the left’s cancel culture fury and the Goliath banks that were “willing or unwitting accomplices” in the sweeping silencing treatment, said Jeremy Tedesco, special counsel for Alliance Defending Freedom.

ADF and other First Amendment defenders had for years warned of a growing debanking effort targeting “disfavored” organizations and industries — aka the left’s ideological enemies. Tedesco said critics scoffed. They said the red flag raisers “didn’t have the goods.” 

“Well now we have the goods,” the civil rights attorney says in an upcoming episode of The Federalist Radio Hour. “We have the biggest banking regulator in the U.S. government saying, ‘This is happening, and it’s happening at a wide scale at the biggest banks in the country.’”

ADF has represented several clients that have had their bank accounts shut down “unexpectedly with minimal or hollow explanations.” Its website provides a page for victims to report debanking incidents.

ADF’s clients include Indigenous Advance Ministries, a Christian organization akin to the Timothy Two Project that serves Uganda faith communities. The organization received similar letters in 2023 from its financial services provider, Bank of America, notifying the ministry that its accounts would be closed. Why? The big bank determined Indigenous Advance was “operating in a business type we have chosen not to service.” After an eight-year relationship, why did BOA suddenly decide not to provide financial services to the Christian organization?  

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