Would you bet $400 million that North Carolina’s education laws and policies are among the most innovative and reform-oriented in the country? That’s how much the state stands to win as it competes against at least 37 other states for a share of the Obama administration’s $4.35 billion “Race to the Top” education grant competition.

But while other states scramble to drop restrictions on charter schools, toughen standards, and adopt new measures of teacher and principal effectiveness to improve their chances of winning a share of the pot, North Carolina’s top education leaders are content to stand pat with the hand the state now holds.

The Race to the Top initiative is the centerpiece of the Obama administration’s education agenda. It’s designed to encourage states to adopt reform efforts, such as national standards and assessments; better use of data in education decision-making; improvements in teacher and principal training, evaluation, and distribution; and specific measures to turn around the lowest achieving schools.

Participating states are supposed to show the U.S. Department of Education that they have laws and policies in place that allow those things, and a plan for using the federal money to do them even better.

The administration will award points to states for such items as “ensuring successful conditions for high-performing charter schools and other innovative schools” and “improving teacher and principal effectiveness based on performance.” Other states have responded to the competition by loosening restrictions on their charter schools, eliminating caps on the number of charter schools allowed, or experimenting with pay-for-performance plans and other innovative teacher compensation schemes.

North Carolina’s leaders, by contrast, seem confident that the state’s current laws and policies are innovative enough. In a Dec. 11 address to leaders of the North Carolina Association of Educators, the state’s largest teachers’ union, State Board of Education Chairman William Harrison said, “When I first saw the guidelines I thought they were crafted for North Carolina.” Harrison told the group that the program seemed to be pushing states along “the path we are already on.”

Referencing the program’s requirements for a teacher evaluation system aligned with high standards, Harrison said, “We are the only state that comes close to having an aligned teacher evaluation system.” State Superintendent of Public Instruction June Atkinson added that North Carolina’s recent successes in raising test scores will also help, since the scoring rubric rewards states that can show success with their current efforts.

But there is at least one area in which North Carolina will not fare well, based on the state’s current laws and policies. Of the 500 total points a state could earn, 40 depend on how well the state “ensures successful conditions for high-performing charter schools.” Race to the Top guidelines make clear that a limit on the number of charter schools allowed, such as North Carolina’s cap of 100 charter schools, will cost the state some of those points.

States earn points based on “the extent to which their laws do not prohibit or effectively inhibit increasing the number of high-performing charter schools.” North Carolina’s cap of 100 charter schools has been in place since the charter school law first passed, and the legislature has declined numerous opportunities to raise or remove it. The cap will make it difficult for North Carolina to argue that its laws do not prohibit an increase in high-performance charter schools.

Another possible concern for North Carolina is the 58 points available for “teacher and principal effectiveness.” The guidelines appear to favor states that link pay to performance, an idea that always raises the hackles of teachers’ unions. North Carolina has no such system, but is apparently working on at least a pilot plan as part of its Race to the Top application.

In her December address to NCAE leaders, Atkinson tried to reassure the union that any reform linking teacher pay to performance would be based on multiple factors. “I would never want us to move to a system of evaluation of teachers that is based solely on student achievement,” she said.

In the end, North Carolina may get an assist from other states that fail to adopt reforms. California Gov. Arnold Schwarzenegger, whose state could win more than $700 million in Race to the Top funds, called a special session of the legislature to enact a bill that would expand the number of charters schools, allow parents to more easily move their children from low-performing schools, and include student performance in evaluations of teachers and principals. But the effort has bogged down due to strong opposition from the powerful state teachers’ union.

Teachers’ unions are also blocking Race to the Top oriented reform efforts in New York, and Florida’s two largest teachers’ unions are refusing to co-sign the state’s application (required to maintain eligibility) until they get new contracts to their liking.

If North Carolina wins a share of the Race to the Top funding it will be in spite of its charter school cap, and largely due to the inability of other states to reform their laws and policies.

Jim Stegall is a contributor to Carolina Journal.