Legislators begin “heavy lift” of examining funding structure of North Carolina schools

Legislators begin “heavy lift” of examining funding structure of North Carolina schools

- in Education, Top Story
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Craig Horn knows many education advocates want the school finance task force he co-chairs to weigh whether North Carolina spends enough on its public schools.

But the Union County Republican, an influential K-12 budget writer, wasted little time in reaffirming Wednesday that he considers the state’s spending levels to be an altogether separate discussion.

“Some people have taken us to task for this,” Horn said. “But adequacy is a different issue. This is an issue of what funds we have, and how they’re distributed. Because, regardless of how much money we have, if we’re not distributing it properly and for the benefit of students, then we’re wasting money.”

Horn’s comments came with legislators convening the first meeting of a pivotal joint chamber panel that, over the next year or more, is expected to overhaul North Carolina’s labyrinthine school funding system.

Horn said legislators’ work will require extensive vetting and “homework” to bypass “unintended consequences,” but lawmakers seemed prepared this week to promise major changes.

“Any system of fund distribution that’s more than 20 years in existence deserves and needs significant change,” said Horn. “Because this state has changed significantly in the last 20 years.”

The task force launched after a biting 2016 report from the legislature’s nonpartisan Program Evaluation Division (PED) skewered North Carolina’s system, which is based on 37 separate allotments used to determine how the state dispenses cash to local school systems.

Rep. Craig Horn

PED slammed “illogical” allotments for students with disabilities, small and low-wealth counties, students with limited English proficiency and more, calling on lawmakers to restructure the system or resolve the issues individually.

The legislative office ultimately recommended the state shift from its allocation framework to a weighted student-based funding system, one in which lawmakers set a base dollar amount per student and build in additional financial supports for students in need of additional services.

Yet critics say that, without ample funding for the state’s 115 local school districts, the funding structure, whatever it may be, will be hamstrung.

National benchmarks from the nonpartisan National Education Association and Rutgers University’s Education Law Center ranked North Carolina near the bottom of the nation in per-pupil funding this year.

Additionally, the Education Law Center handed out an “F” grade this year to the state for its “funding effort,” a measure of a state’s school spending relative to its fiscal capacity.

And education advocates point out funding levels in many of the state’s K-12 allotments today lag North Carolina’s recession-era spending when adjusted for inflation and increased enrollment.

It’s unclear how long the panel’s study is expected to take. Members were initially expected to complete a final report in 2018, although Horn told Policy Watch last week that, while he expects an interim report to be released next year, the group’s work could take two years or more.

“This is going to be a heavy lift for everyone in this committee, and, frankly, for all of us in the state if we are at all interested in education,” said Horn. “And when I say a heavy lift, I mean a really heavy lift.”

Talks Wednesday largely eschewed specific reform proposals, with task force leadership saying members needed to build a “knowledge base” first. However, Sen. Jerry Tillman, a powerful Randolph County Republican and former school administrator, said he hopes members will take on funding equity between traditional public schools and publicly-funded charters.

“They’re public schools too,” said Tillman. “We want to make sure we give that ample coverage.”

Charters are exempted from some state restrictions on curriculum and teacher licensing, although the often privately-run schools frequently complain of funding inequalities, pointing out that charters don’t receive state dollars for school facilities. Some have suggested charter leaders’ complaints are mostly without merit.

Sen. Jerry Tillman

Tillman also seemed to expand on a 2016 GOP proposal to fund administrator salaries with block grants, suggesting the state should substitute such grants for many of its funding allocations. That way, Tillman says, local school districts will have the flexibility to decide how they distribute the cash, rather than taking direction from the state.

“It’s basically who do you trust to do this funding?” added Tillman. “Are we going to trust the school board, the superintendent?”

It’s an idea that local school district leaders and, ultimately, lawmakers rebuffed last year, at least when it comes to administrator pay. Some suggested that, with districts presumably having to negotiate scores of contracts with school personnel, it would exacerbate pay inequities between rich and poor counties and spur more employment complaints or lawsuits.

Katherine Joyce is the executive director of the N.C. Association of School Administrators, the state’s top lobbyists for local school leadership. Joyce told Policy Watch Wednesday that she hopes legislators will come to the same conclusion on Tillman’s block grant proposal this year.

“It appears the task force is working first to understand the complexities of the current system before deciding where they go next,” said Joyce. “We hope they make superintendents and school finance officers part of their discussion and rely on their feedback and expertise with regard to any reforms they consider.”

Katherine Joyce

The Republican-dominated task force is composed of state Senate and House appointees, many of them among the most powerful K-12 lawmakers in their respective chambers, although legislators opted not to include membership from local school finance leaders.

Adam Levinson, chief financial officer for the Department of Public Instruction (DPI), the state’s K-12 oversight agency, said department leaders are prepared to assist the task force in their work, but he cautioned against “oversimplifying” the state’s funding system.

“Oversimplifying could be dangerous and could lead to unintended consequences,” said Levinson.

Levinson also told lawmakers they need to firm up what they hope to accomplish in their work, although task force Co-Chairman Michael Lee, a New Hanover County Republican, cut the DPI presentation short, saying the panel was not prepared to discuss process this week.

Some school finance experts argue that, while the state’s system is indeed complicated, the allotment system aims to direct resources to districts that need cash the most—low-wealth and rural districts that lack the tax base to afford the same K-12 investment as the state’s wealthiest school districts.

Indeed, a nonpartisan state report this year from the Public School Forum of N.C. noted an increasingly widening gap in school spending between rich and poor counties.

The task force’s next meeting is set for November 15, at which point lawmakers are expected to review funding models in other states.