Can a NC city or town appropriate municipal funds to help a local school board buy property that will mostly be used as a school parking lot, but that the town will also use a few days a year?

Plain-English summary

The Town of Elkin asked the AG whether it could appropriate funds to help acquire a piece of property that would mostly be used as parking for a local public school, but that the town would also use on a small number of days each year. Senior Deputy AG Edwin M. Speas, Jr. gave a tight, two-part answer.

To the extent the property will be used for parking for school purposes or school-related purposes, the Town has no authority to appropriate any funds for the purchase. NC cities and towns have only those powers granted by the General Assembly, and the funding of school facilities is the constitutional responsibility of the county and the local school administrative unit, not the municipality. Letting a town pay for school facilities by direct appropriation would expand municipal authority beyond the bounds the legislature has set.

To the extent the property is genuinely needed for town purposes, the Town may appropriate funds for the purchase, but only in proportion to the town's share of use. The AG illustrated with a worked example: if the property would be used 200 days for school purposes and 10 days for town purposes, the Town could appropriate funds for 5 percent of the purchase price (10 of 210 days), and no more.

The opinion does not say what kinds of "town purposes" qualify. Implicit is that the town's use has to be genuine municipal-purpose use (for example, parking for a town park or a town event), not a paper allocation invented to launder a school appropriation through a town account. Read together with the broader public-purpose doctrine that limits municipal expenditures in NC, the opinion stands for a tight pro-rata principle: each unit of government pays for what it actually uses, and a town cannot use shared-property arithmetic as a vehicle to fund a sister local unit's primary function.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

NC's municipal-finance statutes and the case law on the "public purpose" of municipal expenditures have evolved significantly since 1993, including the development of broader municipal economic-development tools post-Maready v. City of Winston-Salem, 342 N.C. 708 (1996), and amendments to Chapter 160A. Before relying on the pro-rata rule in any specific transaction, a town should consult current NC municipal law and counsel.

Common questions

Q: Why can't a town just hand school money to its local school board?
A: Because under NC law, the public schools are funded primarily by the State (for instructional expense) and by the county (for capital and operating expense), not by individual municipalities. A town that tried to make a direct contribution to a school facility would be acting outside the powers the legislature has given it. The town's tax base belongs to its citizens for municipal purposes, and using it to fund a county-administered school facility is a different unit's spending decision.

Q: Is there any other way for the town to help its local schools?
A: The opinion does not foreclose collaboration that does not involve a direct municipal appropriation to the school. For example, a town might enter a lease arrangement under which the school pays the town for use of municipally owned land, or a joint-undertaking arrangement that genuinely serves a municipal public purpose. The opinion only addresses the question presented: a direct appropriation for property acquired primarily for school parking.

Q: How tightly does the pro-rata math need to fit the real use?
A: The 1993 opinion uses days-of-use as the proxy, which is simple and verifiable. A town that wants to appropriate a share for genuine town use should be able to point to specific town events or programs that will use the property, not a vague "future" municipal use. If the town's share is invented or wildly out of proportion to actual use, the appropriation looks more like a workaround for the school-funding bar.

Q: What about a town park that happens to share a parking lot with a school?
A: This is a closer case. If the town genuinely uses the lot for park visitors during weekends and evenings when school is out, the town's share of use is real. The AG's example was 5 percent because the town's use was small relative to the school's. A town park with substantial weekend and after-hours traffic might support a larger share. Either way, the rule is the same: the town pays for what the town uses, and not for school use.

Q: Could a county pay for the school portion?
A: Yes, in the ordinary course. The county is the unit constitutionally responsible for funding school capital, and it can appropriate funds to the local school administrative unit for facility acquisition. The 1993 opinion is about what the town can do, not about the county's role.

Background and statutory framework

NC's school-funding architecture is split between the State and the counties. The State funds the bulk of instructional expense for public schools. The counties fund the school-administrative-unit facilities through county appropriations and through county-issued bonds. Municipalities are not part of the standard school-funding chain. A municipality's tax authority is constrained by the public-purpose doctrine and by Chapter 160A; the legislature has not authorized cities and towns to fund school facilities directly.

Property that serves more than one government function presents the recurring question of who pays. The 1993 opinion adopts a clean pro-rata rule rather than a "majority-use" rule. If a town's use of the property is one-third, the town pays one-third, regardless of whether that is a majority or a minority share. The result is administratively simple and lines up with the constitutional logic of each unit funding its own functions.

Citations

The fetched body of this opinion does not include statutory or case citations. The conclusion stands on the broader public-purpose framework for NC municipal expenditures and the statutory split of school-funding responsibility between the State and counties.

Source

• Landing page: https://ncdoj.gov/opinions/power-of-cities-to-appropriate-funds-to-local-school-boards-for-parking-lots/

Original opinion text

Full opinion text unavailable from the official source. See the linked landing page above for the complete text. The available extract reproduces only the AG's conclusion and example, not the full reasoning.

• To the extent the property will be used for parking for school purposes or school related purposes, the Town of Elkin has no authority to appropriate any funds for the purchase of the property; and
• To the extent, but only to the extent, the property is needed for town purposes, the Town of Elkin may appropriate funds for the purchase of property.

Thus, for example, if the property will be used for parking for school purposes or school related purposes on 200 days and the property is needed for town purposes on 10 days, the Town of Elkin would have authority, if it chooses to exercise that authority, to appropriate funds to pay for 5% of the purchase of the property.

We trust that our view will be of assistance to you in advising the Elkin Town Council.

Edwin M. Speas, Jr.
Senior Deputy Attorney General