Reserve Fund Spotlight: State Capital Infrastructure Fund

Over the last year, the Carolina Journal reported on the use of “reserve funds” in the state budget: billions of taxpayer dollars that are appropriated yet not accounted for in the general fund’s headline numbers. This has allowed sizable expansion in the state budget while keeping the headline budget number at a more acceptable level. 

So, where is the money going, and how do reserve funds work? 

Carolina Journal is examining some of these “reserve funds” to explain how the process operates. This reserve fund deep-dive edition examines the State Capital and Infrastructure Fund (SCIF). 

Examining both the North Carolina House of Representatives Appropriation Committee Report on the Current Operations Appropriations Act and the North Carolina Senate Appropriations/Base Budget Committee Report on the Current Appropriations Act will spotlight some of the unique expenditures in each proposal, as well as similar expenditures worth examining.  

The SCIF was created in the 2017 budget to create a stable funding source for a growing state’s ongoing capital and infrastructure needs.  

“The Fund shall be maintained as a special fund and administered by the Office of State Budget and Management…” according to the budget.  

The SCIF currently has a balance of $4.16 billion. 

“Both the House and Senate make significant recommendations for SCIF spending in FY 2026 and FY 2027, reflecting substantial commitments to infrastructure investment despite differing totals in their proposed allocations,” Joseph Harris, fiscal policy analyst for the John Locke Foundation, told the Carolina Journal. 

The House and Senate Appropriations Committee Reports propose allocating the exact dollar amounts to the SCIF in 2026 and 2027; however, the distribution of these dollar amounts differ between the House and the Senate. Both propose allocating $1.12 billion in FY26 and $1.16 billion in FY 2027. However, the Senate proposes more spending than the House. The Senate proposes spending $1.97 billion in FY26 and $1.52 billion in FY2027. The House only proposes spending $1.64 billion in FY26 and $1.45 billion in FY27. 

The revised requirements indicate the total proposed spending.

Both House and Senate reports include several line-item expenditures worth examining. Firstly, $9.6 million is proposed for security stun fencing inside prisons in FY26.   

Additionally, $2 million in FY26 and $4 million in FY27 are allocated for improvements to the Raleigh Farmer’s Market, bringing the total to $13 million.  

The Department of Natural and Cultural Resources (DNCR) was also allocated $86.8 million in FY26 and $40 million in FY27 for the expansion and renovation of the North Carolina History Museum. The DNCR was also allocated $30 million in FY26 and $24 million in FY27 for a new aviary exhibit building at the NC Zoological Park. 

Another item of note is the $26 million allocated in FY26 and $16.32 million allocated in FY27 to the North Carolina General Assembly (NCGA) for the Downtown Education Campus Parking Deck. 

The final item of note in both reports is $8.3 million in FY26 to the Johnston Regional Airport.  

There are a couple of line items in both the House and Senate committee reports, but with different expenditure amounts proposed, that are worth highlighting. First, there is funding for the continued maintenance, repair, and overhaul of the NC Global TransPark Hangar. The House proposes $60 million in FY26 and $65 million in FY27. 

Meanwhile, the Senate proposes spending $125 million in FY26 and $50 million in FY27.

“A notable difference between the proposals includes the Senate’s recommendation of an additional $20 million for the renovation and expansion of the Fort Fisher Aquarium, increasing the total project funding to $65 million, an allocation not reflected in the House proposal,” continued Harris. “Moreover, the Senate recommends allotting $175 million to complete the NC Global TransPark Aircraft Maintenance, Repair, and Overhaul (MRO) facility, while the House proposes a smaller investment of $125 million to support continued construction.” 

The second item of note with differing expenditure amounts is the allocations to the NCGA for the Downtown Education Campus. The House proposes to allocate $76.6 million in FY26 and $74.8 million in FY27.  

The Senate, however, proposes spending only $62.3 million in FY26 and $74.8 million in FY27. 

Both reports include some line-item appropriations that are not included in the opposing report. The House, for example, proposes allocating $2.5 million for the North Carolina School for the Deaf superintendent’s house. 

An additional $2.3 million is appropriated in FY27 for the National Guard Constable Building restoration. 

Similarly, the Senate includes a few appropriations not included in the House proposal. First is $20 million in FY26 to the DNCR for the Fort Fisher Aquarium expansion. 

Additionally, $6 million to the Wildlife Resources Commission (WRC) for the Setzer Hatchery renovation in FY26. 

Finally, $2.5 million is allocated in FY26 to Richmond Community College. 

These are just a few highlights from the many line-item expenditures from the SCIF fund. The next Reserve Fund Spotlight will examine the SCIF appropriations specifically earmarked for the University of North Carolina (UNC) System.  

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