(The Center Square) – For all that has been haggled and did get inclusion to North Carolina’s budget, one item not in keeps its $500 million endowment untouched.
NCInnovation, per negotiations and conversations, was at risk. In 2023, the private nonprofit was created aiming to help commercialize university research and get technologies from campuses into the marketplace.
Investment earnings would fund grants and operations. There would be no equity stake in the projects.
“We had conversations,” said Sen. Phil Berger, R-Rockingham, the president pro tempore of the upper chamber. “There just wasn’t an agreement on making changes. So, it just continues as it was originally set up.”
And remains at risk with a two-year state budget due to be enacted on July 1 next summer. While NCInnovation is not included specific to this year’s 2026 Appropriations Act, known also as Senate Bill 257, it was in last year’s budget proposals by way of returning money to the state.
NCInnovation, from the outset, was lined up for critique. Public tax dollars in venture capital and private marketplace investments rubbed against the role of state government. Then, Hurricane Helene brought urgency to find dollars for relief as mountain counties face $60 billion to $80 billion in damage.
Another evolving tussle involved transparency, lobbying disclosures and internal spending by NCInnovation. Oversight committee hearings at the General Assemblly did not go well for NCInnovation.
All came together against the initiative that lifted it off the ground in the first place – getting projects from innovation to economic development. The appropriation in 2023 was just under a third of the $1.4 billion wanted by NCInnovation leaders.
The House of Representatives, led by Speaker Destin Hall, R-Caldwell, in the long session last year passed legislation to reclaim the money and redirect it. First-term Democratic Gov. Josh Stein also wanted to spend it elsewhere.
Joe Harris, fiscal analyst at the John Locke Foundation in Raleigh, in April told the Carolina Journal, “Taxpayer money shouldn’t be used for speculative venture capital-style research at universities, especially when North Carolina has far more pressing and immediate responsibilities.”
Senators, in their budget proposal last year, wanted to reclaim money and send it to the new hospital project of Duke and Carolina. Budget writers still found a way to get North Carolina Children’s Hospital funding.
“There has been broad agreement from the House, Senate, and governor that all or most of NCInnovation’s taxpayer-funded endowment should be clawed back, yet this budget appears to make no explicit statutory change to NCInnovation,” Donald Bryson, CEO of the Locke Foundation, told the Carolina Journal last week ahead of budget passage. “The NCInnovation endowment is nearly three years old, and taxpayers should not have to wait longer for accountability on $500 million that rightfully belongs to them.”
