NC Budget and Tax Center

North Carolina is among 14 states that have cut per-student state funding by more than 10 percent for the current school year compared to before the Great Recession, a new report by the Center on Budget and Policy Priorities (CBPP) highlights. This waning commitment to public education by state lawmakers in recent years has heightened the challenge of public schools having to do more with fewer resources.

K12_CBPP Ed Report 2014

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Falling Behind in NC, NC Budget and Tax Center, Poverty and Policy Matters

This is the ninth post in a series that takes a detailed look at the 2013 US Census Bureau poverty data released on September 18th. Previous posts examined: 1) how North Carolina is faring overall; 2) how poverty varies by race, 3) poverty by County; 4) child poverty; 5) the impact, or lack thereof, of the current economic recovery on poverty in our state; 6) the public success of Social Security in bringing down poverty rates for older North Carolinians; and 7) poverty among working-age North Carolinians; and 8) work and income supports help combat poverty.

New data released by the US Census highlight the pervasiveness of poverty nationally and in North Carolina. In 2013, one in six North Carolinians lived below the federal poverty rate – less than $24,000 a year for a family of four and  $12,000 a year for an individual. For communities of color, the poverty rate is far worse: 32.5 percent for Latinos, 28.9 percent for American Indians, and 28 percent for African Americans.

These daunting poverty rates highlight that far too many individuals and families across the state face economic hardship. The persistence of poverty has been accompanied by a rise in income inequality, which poses consequential implications for the overall economy and North Carolina’s state economy. The bulk of economic gains from the ongoing economic recovery have flowed to a small group of high-income earners. In the first three years of the economic recovery, the top 1 percent of income earners captured 95 percent of the income gains nationally. Here in North Carolina, income for the top 1 percent of income earners in the state grew by 6.2 percent from 2009 to 2011 while the bottom 99 percent saw their income decline by 2.9 percent. The latest US Census data show that this early post recovery trend is likely to hold. By 2013, the top 20 percent of households in North Carolina captured more than half of all income earned by all households in the state (see graphic below). Read More

Falling Behind in NC, NC Budget and Tax Center

This week the Budget & Tax Center released a new report on North Carolina’s 2015 fiscal year budget. While other states across the country are beginning to reverse the worst cuts made during the Great Recession, North Carolina continues to underfund crucial public investments in order to pay for tax cuts that took effect this year. Lawmakers failed to provide a high-quality education for all children, protect natural resources, support community-based economic development, or provide adequate health and human services to North Carolina residents.

Under the final budget, state investments are 6.6 percent below pre-recession levels five years into the official economic recovery. The new budget for the 2015 fiscal year is the 7th budget enacted since the Great Recession hit, and North Carolina has yet to bounce back to its pre-recession investment level. This is in contrast to spending during previous economic recoveries – spending did not dip after the 1981 and 2001 recoveries and state lawmakers restored investments to the levels that were in place when the 1990 recession hit within three years. Read More

NC Budget and Tax Center

 

The final budget for fiscal year 2015 – which runs from July 2014 through June 2015 – includes a pay raise for public school teachers for the first time in several years. What the pay raise translates into regarding additional dollars in teachers’ paychecks is unclear based on differing comments by the governor and state lawmakers. Whereas Governor McCrory proclaims an average pay increase of 5.5 percent for teachers, state lawmakers tout a 7 percent average pay raise.

Beyond the on average presentation of the teacher pay raise by state policymakers, the amount of additional money teachers will see in their paychecks varies greatly – particularly among early-career teachers compared to more experienced teachers.

Not all teachers are provided a long-awaited, meaningful pay increase under the new teacher pay structure. The new six-step pay structure for teachers included in the final budget replaces the existing 36-step pay scale – these steps are based on years of teaching experience and determine when a teacher gets a pay increase. Reducing 36 steps down to six entailed much maneuvering by state lawmakers, resulting in some teachers getting a boost in pay at the expense of other teachers.

Under the new pay scale, the starting pay for early-career teachers jumps to at least $33,000 from $30,800 under the old pay schedule—a 7.1 percent increase. However, salary increases for more experienced educators are much lower. In fact, some teacher would actually earn less under the new pay scale compared to the old pay scale; these teachers will continue to earn salaries based on the old pay scale for the 2013-14 school year along with a flat annual $1,000 bonus. Read More

NC Budget and Tax Center

Each year public schools across the state experience changes in their student enrollment levels – some see an increase, others a decline, while enrollment in some schools remain steady. A policy change included in the budget approved by state lawmakers for the current fiscal year 2015 means schools experiencing growth in student enrollment are no longer guaranteed to receive full state funding for the additional students when state lawmakers create a budget for the next school year.

The new provision in the budget no longer includes enrollment adjustments for public schools as part of the baseline budget, also referred to as the continuation budget. Prior to this policy change the state’s budgeting process took enrollment adjustments into account when determining how much state funding is required to maintain education service levels. Doing so more accurately reflect the actual level of state funding that should be invested in K-12 education.

Public schools that experience an increase in student enrollment from one year to the next must now wait until state lawmakers finalize a budget for the next fiscal year to know if enrollment growth is fully funded. Many public schools across the state could potentially feel the impact of this deceptively subtle policy change. Read More