This year, the Carolina Journal has been reporting on the use of “reserve funds” in the state budget: billions of taxpayer dollars that are appropriated, yet not included, in the general fund’s reported totals. The practice has allowed for sizable expansion in the state budget beyond what’s reported in the headlines.

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

The World University Games Reserve Fund was established in the budget for the fiscal year 2023, and $25 million was appropriated to the North Carolina Department of Commerce.

The $25 million was deposited into the fund in Oct 2022, according to the Office of the State Controller report.

Changes in the budget for FY24 include the fact that North Carolina will not host the World University Games until 2029, when it was initially scheduled for 2027. Additionally, the deadline for the money allocated to the Department of Commerce was moved from June 30, 2026, to June 30, 2024. South Korea will be the host nation for 2027.

According to Cash Watch reports from the state controller’s office, the money was withdrawn from the fund between Nov 3 and Nov 10, 2023. The monthly reports from the OSC back up this information, showing that the money was withdrawn in Nov 2023.

The World University Games falls under the Federation of International University Sports (FISU). World University Games is the largest global multi-sports event for student-athletes.

“The twelve-day FISU World University Games competition program includes fifteen compulsory sports,” according to the website. “To stay at the forefront of sports development and innovation, organisers may also include up to three optional sports from the FISU Recognised Sports list and the FISU World University Championships programme into their event.”

 Like the Olympics, the World University Games have both summer and winter editions. This event dates back to 1923, and this will be the fourth time that the United States will be the host nation. The US hosted the Winter Games for the first time in 1972 in Lake Placid, New York.  

The 2025 Summer Games will be held in Rhine-Ruhr, Germany, and the Winter Games will be held in Torino, a region in Italy. 

This will only be the US’s second time to host the summer edition. The previous three times the US played the host nation, the state of New York hosted. The US first hosted the Summer Games in 1993 in Buffalo, New York. In 2023, the Winter Games were hosted again in Lake Placid, New York.  Russia was set to host the Summer Games in 2023 but was canceled due to the Russian invasion of Ukraine. The Winter Games were also canceled in 2021 due to the pandemic when Switzerland was set to host. 

“Putting taxpayers on the hook for a sporting event is clearly beyond the proper scope of government,” Brian Balfour, VP of Research at the John Locke Foundation, told the Carolina Journal. “While the state’s energy and transportation infrastructure face mounting pressures from a growing population, forcing taxpayers to pay instead for an athletic competition is unjustified. And the claim that hosting such an event will generate a major economic impact is unfounded.”

Balfour points to a 2016 study examining economic impacts from Olympic games and World Cup events found that the economic impact, depending on host city, can range from significantly negative, to neutral, to “modestly positive.”

“Mega-events are far from the economic engines they are touted to be,” researchers wrote. “It is almost a universal experience that these events engender more short-run costs than short-run revenues, and that the expected long-run gains in tourism, trade and foreign investment are not forthcoming.”