National experts highlight how much tax cuts for the wealthy have cost NC schools

Two new reports from researchers at the Education Law Center document the extent to which North Carolina’s legislative leaders have shifted state resources out of our schools, and into the pockets of their wealthy benefactors.

The first report, Making the Grade 2020, provides an important snapshot comparing school funding in North Carolina to other states. The report assesses each state along three measures of school funding:

The failing marks North Carolina has received from ECS are consistent with findings from other researchers such as the Albert Shanker Institute and Education Week.

Sadly, North Carolina’s scores along these measures have remained largely unchanged over the past several decades. Going back to at least the late 2000’s, North Carolina has consistently ranked near the bottom of all states for funding level and effort. Consistently poor rankings have failed to inspire state lawmakers to create a funding system that’s more adequate or equitable.

As the ELC’s second report, $600 Billion Lost, makes clear, North Carolina’s lawmakers are doing far less for our schools than they were prior to the Great Recession.

The report calculates that in the decade following the Great Recession, students across the U.S. lost nearly $600 billion from states’ disinvestment in their public schools. That is, if states had maintained their pre-Recession effort levels, school funding would have been $600 billion higher in 2018.

The problem is particularly acute in North Carolina where the state’s school funding effort fell from 45th to 49th in the decade following the Great Recession.

As the economy recovered from the Great Recession, state leaders enacted a series of large tax cuts that have drained funding from schools and other state services. These tax cuts have largely benefitted wealthy North Carolinians and corporations. For example, the ELC reports that revenue from progressive the corporate income tax is 52 percent below pre-Recession levels, while the revenue from the regressive sales tax remains unchanged from pre-Recession levels.

Our schools have been paying the price from these decisions. If North Carolina had simply maintained its anemic pre-Recession funding effort levels (when we ranked 45th), our schools would have had $4 billion of additional revenue in 2018. That equates to lost funding of $2,771 per student.

Reductions in school funding have been found to disproportionately harm Black students and those from families with lower incomes. When coupled with the changes to North Carolina’s tax code, state leaders have greatly exacerbated inequality in the past decade.

North Carolina does not need to continue down this path. The 2019 WestEd report offers state policymakers a roadmap for improving the adequacy and equity of state funding, as well as additional reforms that would strengthen our public schools. The courts – as part of the long-running Leandro case – are expected to issue an additional, more detailed eight-year spending plan in the coming months.

For additional information on school funding in North Carolina, ELC has created state profile reports which can be found here and here.

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