2018 Fiscal Year State Budget, NC Budget and Tax Center

Governor’s budget for public schools limited by tax cuts in recent years

The Governor’s proposed budget for K-12 public schools reflects the reality of North Carolina’s constrained revenue landscape, which is a result of costly tax cuts in recent years. Beyond state funding provided for teacher pay raises, little progress is made to boost investments in other areas of the public schools budget. Overall, spending for public schools in this proposal is 6.1 percent above spending under the state budget for the current fiscal year. Excluding the additional state funding for pay raises, spending for public schools under the Governor’s budget is 2.7 percent above pre-recession spending.

Here are five notable spending priorities in the Governor’s budget.

  1. The bulk of new spending in the Governor’s public schools budget is for teacher pay raises. The average includes a new salary schedule that provides teachers an average 5 percent pay raise in each year of the biennial budget. The total annual cost of these two pay raises once fully in place is $542 million.
  1. Enrollment growth is funded. Full funding to account for enrollment growth in public schools is no longer a guarantee, as this funding is no longer included in the base budget. The Governor’s budget provides $29.3 million in state funding for enrollment growth. Enrollment growth is not fully funded with General Fund dollars, however. The Governor’s budget includes $2.5 million of revenue from the Civil Penalties and Forfeiture account to help fund enrollment growth in public schools.

  1. Additional funding is provided to local school systems to hire more personnel. The Governor’s budget does not directly target additional state funding for teacher assistants, school nurses, counselors, or other school personnel. Rather, $20 million in new funding is included in the budget and local school systems are allowed to hire additional school-based personnel. These new positions are intended to help improve student outcomes and can include school nurses, teaching assistants, and other instructional support personnel.
  1. Teachers get a small stipend to help pay for instructional material and supplies. State funding for classroom materials and instructional supplies for the current school year is 58 percent below peak 2010 state funding per student, adjusted for inflation. The Governor’s budget provides teachers a $150 stipend each year to help offset the out-of-pocket cost that many North Carolina teachers incur for classroom and instructional supplies.
  1. Mostly one-time dollars provided for textbooks and digital resource. State funding for textbooks and digital resources for the current school year is 49 percent below peak 2010 state funding per student, adjusted for inflation. The Governor’s budget provides $10 million in one-time lottery dollars, along with $3 million of recurring funding from Indian Gaming receipts, for textbooks and digital resources. The largely one-time nature of the additional funding does not ensure that state support will be sustained in the years ahead. Furthermore, funding for this area will remain well below 2010 peak spending.

Also, included in the Governor’s budget for the UNC System is a discontinuation of the voucher program that provides public dollars for students to attend K-12 private schools. The proposed budget provides state funding to honor scholarships already awarded for the 2017-18 school year – and for the remaining years of scholarships for those students – but does not provide additional state funding for more vouchers.

For more news and analysis during the budget debate, follow the Budget & Tax Center on Twitter @ncbudgetandtax.

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