RALEIGH, NC (February 19, 2019) – A study released today by the Public School Forum of North Carolina once again illustrates a chronic and growing gap in public school funding between the highest and lowest-wealth counties in the state.

The 2019 Local School Finance Study found that the ten highest spending counties spent on average $3,200 per student compared to $755 by the ten lowest spending counties, with a gap of $2,445 per student. That gap is the largest since the Forum began tracking this figure in 1987.

These funding disparities have tangible impacts in North Carolina classrooms. Local salary supplements for teachers, for example, are generally greater in high-wealth and larger districts, better positioning them to attract and retain top talent. Rural districts, which already face challenges in recruiting and retaining highly skilled teachers, are at an even greater disadvantage if they are not able to offer competitive pay.

“Year after year, our poorest counties fall further behind our wealthier ones in terms of resources available to their local schools,” Keith Poston, President & Executive Director, Public School Forum of North Carolina. “These funding disparities have a real impact on educational opportunity for students, particularly in in terms of the ability of lower wealth counties to fund local supplemental pay to attract and retain the teachers they need to serve students.”

In 2016-2017, the ten highest-spending counties spent more than four times more per child than the ten lowest-spending counties. Orange County, at the top of the list, spends more than 11 times more per student than Swain County at the bottom. The bottom seven counties combined spend $396 less than Orange County spends on its own. Fifty-nine of North Carolina’s 100 counties spend below the state average of $1,652 per student in local support.

For more than 30 years, the Public School Forum of North Carolina has isolated local spending from state and federal spending to examine the capacity and actual effort of counties to support public schools. The annual Local School Finance Study focuses not only on the amount that counties spend on schools, but also on each county’s investment in the context of that county’s taxable resources.

In 2016-2017, the ten poorest counties taxed themselves at nearly double the rate of the ten wealthiest counties — $0.81 compared to $0.44, a 37-cent difference. Because of the disparities in real estate wealth, however, the revenue that the poorest counties could generate — even at their higher tax rates — was substantially lower than what the wealthier counties could generate.

“Policy decisions at the state level have helped by providing additional funds for the state’s smallest and lowest-wealth counties, yet investments in schools still vary dramatically by zip code,” said Public School Forum’s Senior Director of Policy, Lauren Fox. “North Carolinians living in lower wealth districts face an impossible financial burden to support public education; consequently, their schools are more poorly resourced than those in wealthier counties.”

School finance officers across the state tell the Public School Forum there is need for greater state funding across the board. They say reductions in state funding for instructional resources, greater restrictions on spending flexibility across allotments, and increased state mandates such as the K-3 class size restrictions are putting additional strains on all districts. Greater equity and flexibility in spending across local districts would certainly help low-wealth districts better serve their students’ needs, but it is critical, based on the Forum’s conversations with district leaders, that the state increase funding for education for all schools.

In 2018, work by several entities ramped up in ways that may soon lead to fundamental shifts in the state’s funding for public schools. In the landmark court case Leandro v. State, Judge David Lee ordered independent consultant WestEd to create an in-depth report, to be released in 2019, which will review and analyze North Carolina’s performance on the dimensions of adequacy and equity in school finance. Separately, the Governor’s Commission on Access to Sound Basic Education has been examining the key areas highlighted in the Leandro case and will engage in implementation of the remedial process. In addition, the General Assembly’s Joint Legislative Task Force on Education Finance Reform continues its consideration of a major overhaul to the state’s school finance system based on a weighted student funding formula, with a final report due in October 2019.

“It is imperative that the Governor, the State Board of Education, DPI, and the General Assembly be prepared to act on the recommendations of the independent consultant, WestEd, and to reconcile them with the separate work being done by the Governor’s Leandro Commission and the Joint Legislative Task Force on Education Finance Reform,” said Poston. “It is past time the state moves toward satisfying its obligation to provide every North Carolina child with access to sound basic education.

As North Carolina considers reforming its school finance model, the Public School Forum believes a new method for funding our public schools should include the following:

  • Ensure both the adequacy and equity of statewide public school funding. Lawmakers should implement a school funding model that goes further than simply providing a more efficient way of distributing an inadequate amount of state funds to public schools in an inequitable manner. Instead, any funding mechanism must direct a larger share of state resources to all of our school districts, as they have repeatedly made a compelling case for the need for more resources to educate our children. In addition, a new model must go toward greater lengths to close the wealth gap between our rural and urban districts. One way to do this is to increase and reformulate the low-wealth and small county funding streams to close the increasing gap in school funding.
  • Address infrastructure. With an estimated need of $8 billion+ when it comes to addressing facility costs for North Carolina’s public schools, both of the current funding proposals on the table–a statewide $2 billion bond and a Senate-backed $2 billion school construction fund–are inadequate. With counties spending $3 billion on instructional expenses, or 24 percent of the total share of federal, state and local dollars, the Forum calls for a new funding model that either fully funds instructional expenses, as it is the state’s obligation to do so, or more directly fund public school capital expenses based on a county’s need and ability to self-fund.
  • Streamline allotments. We have a funding model that includes 37 different budget allotments, which makes matters far more complex than they need to be. Let’s combine allotments based on feedback and expertise from our superintendents and local school finance officers, but keep in place certain core allotments, in particular the teacher position allotments. The position allotment is critical for local districts to be able to hire the best educators and leaders who can lead our children down the path toward academic success. We should also restore flexibility associated with these funding categories, so that local school leaders are empowered to make funding decisions based on local needs. They are in the best position, closest to the students and schools, to make those calls and should be trusted and empowered to do so.
  • Level the playing field when it comes to teacher recruitment. High-wealth, typically urban districts are in a much better position to attract and retain high quality educators because they can provide more competitive, high dollar salary supplements. To enable low-wealth districts to do the same, a new funding model should include a new needs-based funding stream that will allow low-wealth counties to boost local teacher salary supplements to attract top talent.

North Carolina is uniquely situated when it comes to school finance because it is one of the few states where schools are majority state-funded. Under the state constitution and the post-Depression School Machinery Acts, among other laws, it is the state’s responsibility to adequately fund public schools. It is this unique North Carolina history and law that allow school finance reform at the state level to be a real game changer in each school child’s opportunities, regardless of zip code. Let’s not miss what 2019 offers us — an historic opportunity to revise our school funding model in ways that finally level the playing field for all of North Carolina’s children.

The full report is available for download as a PDF at https://www.ncforum.org/local-school-finance-study/

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About the Public School Forum of North Carolina

Since 1986, the Public School Forum of North Carolina has been an indispensable and nonpartisan champion of better schools and the most trusted source in the state for research and analysis on vital education issues. We bring together leaders from business, education and government to study education issues, develop ideas, seek consensus, and ultimately inform and shape education policy. We do that through research, policy work, innovative programs, advocacy, and continuing education for educators and policymakers. Follow us on Twitter @theNCForum and visit our website at http://www.ncforum.org/.

The full report is available for download as a PDF below.

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