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RALEIGH (MCT) — As teachers worry about job security and residents pay a penny more on the dollar in sales tax, one interest group is emerging from North Carolina's new budget unscathed: state universities' athletic booster clubs.

Taxpayers will continue to pick up the tab for granting in-state tuition to out-of-state athletes at a cost of $10 million a year.

''It's unconscionable to be bailing out these booster clubs when we're firing teachers and state employees and cutting mental health programs," said state Rep. Pricey Harrison, a Greensboro Democrat.

Under a law slipped into the budget four years ago, out-of-state athletes are charged in-state tuition. That means that booster clubs that fund the athletic scholarships, such as the Rams Club at UNC-Chapel Hill or the Wolfpack Club at N.C. State, have only to cover the lesser in-state tuition rate. The rest of the cost of the athletes' education is subsidized by taxpayers.

The difference is substantial, according to the legislative fiscal staff.

UNC-Chapel Hill tuition for the coming academic year is expected to be $3,865 for in-state students and $21,753 for out-of-state students. That means a savings of $17,888 for each of the 139 out-of-state athletes at Chapel Hill, or $2.5 million in total.

Legislators took final votes Wednesday on the budget, which includes the higher sales tax and an income tax surcharge on richer taxpayers. The budget also requires significant cuts to programs. Both actions were aimed at closing a revenue shortfall of more than $4 billion.

A News & Observer series in June, "The Generous Assembly," included the tuition break as an example of special-interest legislation that lawmakers were reluctant to touch, even during dire economic times.

Booster clubs have money

The booster clubs are in somewhat better shape than the state, though the most recent tax disclosures don't take into account last year's stock market dive.

According to the most recent tax filing available, from June 2007, the Rams Club had net assets of $47 million. The club spent $2 million on scholarships and $14 million on improvements to athletic facilities. The Wolfpack Club listed its net assets at $77 million in the fiscal year ending in June 2008, tax forms show. The Wolfpack Club spent $5.7 million on scholarships and $7.6 million on improvements that year.

John Montgomery, executive director of the Rams Club, did not return phone calls to his office Wednesday.

The tuition measure has come in for much criticism in the House, whose budget proposal eliminated the break.

Rep. William Current, a Gastonia Republican, wondered how he would explain the scheme to constituents. "There's not a spot for their kids to go to school, and yet we're giving them to out-of-state kids who are not paying these taxes?" Current asked.

Rep. Phil Haire, a Sylva Democrat, said that schools' athletic rosters were already filled for this year and that it wouldn't be fair to change the rules now. "To cut them off at this point in time, it would have caused difficulties for the schools," he said.

The budget does, however, cut appropriations to the university system by $319 million for the coming fiscal year.

Harrison said booster clubs can thank the Senate for the tuition break: "Their leadership is really dug in."

The biggest backer for the measure is Sen. Tony Rand, a Fayetteville Democrat, a Tar Heel fan and one of government's top power brokers. In an interview last week, Rand said the scholarships benefit all the universities, not just the flagship schools.

Statewide, there are 747 out-of-state athletic scholarships for the coming school year, according to the legislative staff. UNC-Chapel Hill has 139, N.C. State 133, and Appalachian State University has 112. The historically black colleges have a total of 70, less than 10 percent of the total.