Tucked into the new state budget are billions of dollars from Washington for Covid relief. The American Rescue Plan Act, for example, sent $5.4 billion to the state. These funds were placed into the State Fiscal Recovery Fund and are dispersed according to rules set by the US Treasury. 

Note that these resources are separate from the local coronavirus aid from Washington; $2 billion to counties in North Carolina, $700 million to localities, and $670 million to metro cities. 

In the state budget, the federal funds largely go to fund internet grants, bonuses for state workers, drinking water, wastewater and stormwater infrastructure programs, asbestos remediation, and state park projects.  

The funds were also used to support various sectors negatively impacted by the Covid lockdowns.  

The below pie chart shows a high-level breakdown of the nearly $6 billion in federal Covid funding in the state budget. The largest piece by far is Environmental Quality, as this includes the water infrastructure programs. 

Some examples of how the federal Covid funds are spent in the budget include: 

Water Infrastructure:

  • $1 billion to state drinking water reserve
  • $100 million to stormwater infrastructure
  • $456 million to viable utility reserve – grants to water and sewer facilities designated as “distressed”


  • $31 million for $1,000 bonuses to community college employees; and an additional $500 bonus to law enforcement officers, employees with salaries under $75,000, and other eligible personnel
  • $12 million for apprenticeship opportunities at community colleges
  • $300 million to bonuses for public school personnel
  • $18 million for enhanced safety and Wi-Fi on school buses 
  • $191 million to UNC Board of Governors Programs, including $92 million for bonuses$2 million for Ultraviolet C sterilization units 
  • $64 million for UNC aid to private institutions 
  • $80 million to community colleges for the decline in enrollment during Covid
  • $97 million to Project Kitty Hawk, a public-private partnership for digital learning courses

Health Care:

  • $19 million to Aging and Adult Services, including: bonuses for state and local employees and $15 million for rehousing and homelessness prevention
  • $133 million in bonuses to direct care workers in Medicaid or North Carolina Health Choice progra
  • $150 million to asbestos remediation in public schools and childcare facilities
  • $50 million for HVAC upgrades ($30 million for DPS facilities and $20 million for selected hospitals)
  • $100 million to reimburse the State Health Plan for Covid testing, treatment, and vaccine administration

Affordable Housing: 

  • $10 million to Winston Salem for the construction of affordable housing units
  • $35 million to Dare County for the construction of affordable housing units
  • $170 million to the Workforce Housing Loan Program (WHLP)


  • $45 million to the Office of the Courts, including $2.4 million for temporary court personnel to address the docket backlog from Covid, $5 million for video conferencing equipment to enhance courtroom proceedings by encouraging social distancing

Public Safety:

  • $117 million to public safety, including bonuses and $5 million to address increased medical costs for inmates due to Covid
  • $8 million in grants to volunteer fire departments


  • $22 million to address the impact of Covid on the operations of the legislature 

Economic Recovery Funds: 

The budget also sent $95 million to Natural and Cultural Resources to provide funding for state attractions that were shut down during the governor’s lockdown orders. Some examples include: 

  • $5.7 million to aquariums
  •  $300k to Roanoke Island festival park
  • $1.9 million to the state zoo
  • $5 million to the North Carolina Symphony society
  • $4 million to the Carolina Ballet