Lack of new investment moves NC even further from delivering kids the education they’re owed

NC devotes a smaller share of its economy towards its public schools than any other state 

The most damning aspect of the watershed Leandro consultant’s report is the authors’ meticulous documentation of how a decade of poor legislative leadership caused our education system to regress. Specifically, the report notes North Carolina is now “further away from meeting its constitutional obligation to provide every child with the opportunity for a sound basic education than it was when the Supreme Court of North Carolina issued the Leandro decision more than 20 years ago.”

The analysis, from some of the nation’s leading education experts, echoes the 2017 Justice Center report The Unraveling, which similarly documents our state’s backwards direction on education policy.

Apparently, the analysis was ignored. After another legislative session, we have again stepped backward, continuing our slide away from meeting our constitutional obligation to provide every child in North Carolina with access to a sound basic education.

For the second year running, the General Assembly has failed pass a comprehensive budget bill that had a chance of becoming law. Instead, it passed a series of smaller bills that make small changes to public school budgets. In addition to failing to adequately address North Carolinians’ needs, this piecemeal approach makes budget decisions exponentially less transparent, particularly when coupled with the Fiscal Research Division’s decision to abandon its longstanding practice of regularly producing budget summary documents.

By my count, eight bills passed in 2020 affect the budget for public schools (SL 2020-04, SL 2020-26, SL 2020-27, SL 2020-41, SL 2020-43, SL 2020-45, SL 2020-64, and SL 2020-80). Additionally, three bills passed in prior years (SL 2018-02, SL 2019-209, and SL-2019-222) adjust public schools’ Fiscal Year 2020-21 appropriations.

The adjustments contained in these bills can be broadly categorized into three categories:

1. Adjustments to account for inflation and enrollment: The majority of “new” money in FY 2020-21 ($308 million) simply reflects additional enrollment, updated data on average teacher salaries, and the increased cost of retirement and health care benefits.
2. Budget changes that actually impact school resources: Schools are receiving additional money for the still-not-fully-funded class-size requirements ($45 million) and more cops in middle and elementary schools ($3 million). Every district will receive about one-third of an instructional support position ($3 million). These funding increases are offset by cuts to school bus replacement ($10 million), school technology ($18 million), and the expiration of certain one-time funds for prior-year school safety grants ($15 million). As a result, there’s little net change in schools’ resources from the prior year.
3. Appropriation of federal funds to address the additional costs created by the COVID-19 pandemic: The General Assembly appropriated $244 million of federal Coronavirus Relief Fund monies to help districts offset the increased costs incurred due to the pandemic. The State Board requested $381 million to meet these same needs, indicating that districts will have to find an additional $137 million to meet new COVID-related expenses. Full details can be found here.

It should be clear that these actions do nothing to move us toward meeting the goals set out in Leandro. The General Assembly made no progress on several of the benchmarks of the landmark court decision:

• Creating an adequate, efficient, and equitable school funding system;
• Providing qualified, well-prepared, and diverse educators in every school;
• Revising the assessment and accountability system;
• Directing resources, opportunities, and initiatives to economically-disadvantaged students; and
• Building a system of support for the improvement of low-performing and high-poverty schools.

A provision from the 2018 budget bill adds $9 million to NC Pre-K, providing 2% of what it would take ($421 million) to partially meet the Leandro goal of giving all at-risk children the opportunity to attend high-quality early childhood programs. So there was some progress towards this goal, but at this pace, it will take another 50 years to get to where we need to be.

It wasn’t supposed to be this way. The Leandro consultant’s report recommends an increase this year of $855 million in new resources above and beyond adjustments to account for inflation and enrollment. The Year One action plan submitted to the courts in June takes our current economic situation into account, recommending just $427 million above adjustments for inflation and enrollment. Either goal should still be achievable given that North Carolina devotes a smaller share of its economy towards its public schools than any other state in the nation.

This lack of progress must be considered in context of the added operating costs created by the COVID pandemic. As mentioned above, appropriations for COVID-related expenses were $137 million short of the State Board of Education’s estimate of schools’ needs. Analysis from the Learning Policy Institute indicates an even larger shortfall of $334 million when comparing their estimate of increased education costs ($934 million) against the federal funds NC schools have received to date ($244 million from the CRF and $356 million from the Education Stabilization Fund).

The budget hole is even bigger if we assume that schools will take the same precautionary measures as undertaken by the General Assembly itself. Lawmakers reportedly blew through $1 million over their three-month legislative session. If that number is annualized and applied to North Carolina’s 2,600 schools, it would imply a cost of over $10 billion, or a doubling of current state spending on public schools.

Clearly, North Carolina’s schools are on worse financial footing – and further from delivering all students with access to a sound basic education – than they were a year ago. What’s scary is that the situation could still get worse.

First, COVID-related enrollment decreases could result in substantial budget cuts. State law requires the reduction of school district and charter school budgets if enrollment falls short of anticipated levels. These reductions will almost certainly be triggered given the uncertain safety of returning to in-person learning.

Second, the state is still facing a predicted revenue shortfall of $2.6 billion in FY 2020-21. In failing to pass a budget based on updated revenue figures, the General Assembly has put the onus on the executive branch to make budget reductions as revenue shortfalls arise. With public schools composing approximately 40% of the state budget, it will be difficult to implement sizable budget cuts without impacting public schools.

Regardless, the General Assembly’s actions this session (or lack thereof) are already bad enough. Our constitution is clear. The state owes every child in this state access to a sound basic education; a low bar that should be readily achievable. Our current leadership continues to not only shirk this responsibility, but to actively undermine it, moving our state backwards at our children’s expense.

Kris Nordstrom is a senior policy analyst with the North Carolina Justice Center’s Education and Law Project.