Counties can establish special taxing districts in North Carolina to fund projects and services for that area. In these districts, an additional tax on property located within the area can be used for a variety of uses allowed by the North Carolina General Assembly. Some of the currently allowable uses include beach erosion, hurricane protection, public transportation, public schools, and downtown revitalization. (Districts created for downtown revitalization are often called Business Improvement Districts.) For example, in 2021, the Dare County Board of Commissioners approved two special taxing districts to fund a beach nourishment project.

Currently, state law does not allow local governments to create districts to collect revenue for early education purposes. Legislation was introduced in the North Carolina House in 2021 that would add “early childhood education programs” to the list of purposes that a county can create a special taxing district for. If this or similar legislation passes, these special taxing districts could become a source of local early childhood funding.