2017 Fiscal Year State Budget, NC Budget and Tax Center

Making college affordable by possibly killing off public universities

One of the major issues that Senator Berger and Brown have heard from their constituents is that the rising cost of tuition at the state’s public universities is making it difficult for parents to send their kids to college or for kids to complete their degrees. The Senate’s answer in the form of Senate Bill 873 is unlikely to make sure that a four-year degree remains affordable and accessible. Instead, it will almost certainly limit access to public universities for students of color and those living in more rural parts of the state, as well as harm their communities’ economic development efforts.

Senate Bill 873, included in the Senate’s budget proposal, targets students at five specified colleges and universities, which have a rich history as HBCUs, the state’s university serving American Indians, and a rural institution. These five institutions would see their tuition capped at $1,000 for the year for in-state students and $2,500 for out of state students. Capping tuition at these institutions would mean a significant loss of revenue for each respective institution – ranging from an estimated nearly $3.9 million to more than $29 million among the five institutions.

Copy of Senate Bill 873 (HBCUs)_tuition cap analysis

And if the tuition cap is not a big enough hurdle to overcome, the mandatory reduction in fees (combined with the tuition reduction and cap) will certainly heighten the financial challenges faced by these institutions. These fee reductions would mean additional estimated annual revenue loss that ranges from around $6 million to $15 million.

For the majority of these institutions, which have faced the challenges of building endowments,sustaining their institutions through segregation and Jim Crow, and serving a disproportionately low-income student body, the tuition cap is a blunt instrument that will only serve to erode the institutions’ fiscal stability and ability to support every student’s completion of a four-year degree.  It fails to ensure that those who can afford to pay do so, and instead delivers a benefit to all students regardless of income. A better strategy to keep college affordable would be to increase the state’s need-based grant program to close the gap for students struggling to afford an education and only able to access federal grants.

Of course, it is hard to believe that keeping college affordable is the true intent.  After all, why then are just these five institutions targeted with a tuition cap? If the tuition cap is the policy choice of the Senate to achieve affordability, it should be applied to UNC Chapel Hill and NC State, too.

All UNC institutions will face a limit on fee increases. Students at all UNC institutions will be able to freeze tuition to what it was when they entered until four years later under this proposal. Such an approach fails to anticipate needs that may arise or the possibility that tax cuts will phase-in and further erode the state’s aspiration to be a first-rate public university system.

Steady erosion of state support for higher education in recent years has played a direct role in the increasing cost of college in North Carolina as colleges make up for state funding cuts on the backs of college students and their families. State funding per student at public four-year universities remains more than 15 percent below its 2008 pre-recession level –– equating to hundreds of millions of dollars in funding cuts. In response, public universities have increased tuition and fees in part to offset the funding cuts.

And while the bill allows for up to $70 million in state funding to be requested from lawmakers to replace the revenue loss from the tuition cap, it is unlikely that these funds will be sustained because of the priority given to poorly targeted tax cuts. It is also unlikely that they will be sufficient. The tuition cap means that any enrollment growth in the years ahead will result in greater revenue loss that otherwise could be generated from in-state and out-of-state students. A growing student body amid limited and constrained financial resources compromises the ability of these institutions to ensure quality education services that promote student success.

Ensuring an affordable college education for North Carolina students and families is important to North Carolina remaining an attractive place to live and do business, as well as in retaining the talented young people who will lead our state in the future. This short-sighted and limited budget proposal is not the road map to make college access and completion a reality for more North Carolinians despite the economic imperative to do so.

NC Budget and Tax Center

Affordable higher education should be a priority for North Carolina

As state support for higher education has eroded, North Carolina students and families have shouldered more and more of the cost of a post-secondary education. A new report by the Center on Budget and Policy Priorities highlights how years of reduced investment by North Carolina in higher education has helped drive up tuition at public colleges, jeopardizing the ability of many students and families to afford an education that is key to their long-term financial success and essential to a growing economy.

State support for higher education remains well below the 2007-08 school year — 20.1 percent when adjusted for inflation, the report notes. Amid an improving national and state economy, state lawmakers have chosen tax cuts over restoring and boosting investment in higher education. These tax cuts have significantly reduced revenue that otherwise would be available to make a college education more affordable. Revenue loss will top more than $2 billion each year once all tax changes passed since 2013 are fully in place.

State and local dollars make up a significant portion of public colleges and universities budget. As such, large cuts in state funding for public universities in recent years have resulted in a steady increase in tuition. North Carolina is among the top of states for the percent increase in tuition at public four year colleges since 2008. Average tuition at four-year public colleges in North Carolina is up by $2,051, or nearly 42 percent, since the 2007-08 school year, among the highest increases in the nation. Meanwhile, federal and state financial aid for the average student has not kept up with the rising costs of earning a college degree, the report found. Read more

NC Budget and Tax Center

Gaining one spot in teacher pay rankings is nothing for NC to celebrate

North Carolina continues to tread water when it comes to ensuring our teachers can make ends meet, merely inching up the national rankings for average teacher pay this year compared to last year, from 42nd to 41st, according to a recently released report by the National Education Association.

North Carolina may have moved up a spot, but the problem is that rankings rarely help us to understand the actual state of things. For example, Missouri (42nd from 43rd), New Mexico (43rd from 44th), and Idaho (48th from 49th) could also similarly celebrate their respective inch forward. The reality, however, is that all these states, including North Carolina, remain among the worst states for average teacher pay.

The more important take away from this ranking is that much work remains to be done in public education in North Carolina.

All of our neighboring states – Georgia, Kentucky, Virginia and Tennessee – rank higher for average teacher pay. Among states in the Southeast, all but three – West Virginia, Oklahoma and Mississippi – rank higher for average teacher pay than North Carolina.

In a broader context, ranking 41st for average teacher pay is not a competitive position. Moving up one spot among the bottom is not impressive. Ranking near the very bottom in the Southeast is disappointing. North Carolina has chosen to inch along when we could be making greater strides. Read more

2017 Fiscal Year State Budget, NC Budget and Tax Center

House K-12 education budget reflects impact of prioritizing tax cuts over reinvestment

North Carolina’s education needs are once again going unmet in the public schools budget proposed by House leaders for the upcoming fiscal year because tax cuts for the wealthy and profitable corporations have taken priority over reinvestment. Beyond funding that will likely be included in a final budget for teacher pay increases, the public schools budget includes a paltry 0.15 percent increase in spending over the original budget passed by state lawmakers last year. This modest spending for public schools fails to address ongoing unmet needs such as adequate funding for textbooks, classroom materials and instructional resources, professional development for teachers and school leaders, and schools nurses, among other areas.

State leaders continue to face a self-inflicted constrained revenue landscape that presents false choices regarding state budget decisions. Highlights from the House budget for K-12 public schools include:

  • Provides $46.7 million to account for enrollment growth of more than 5,800 students in public schools.
  • Replaces $57.3 million in General Fund dollars with lottery dollars for non-instructional support personnel. State lawmakers replaced $345 million in General Fund dollars with lottery dollars for this area for the current school year. The proposed change would result in this area of the public education budget being fully supported by lottery funding and continues the trend of a greater reliance on lottery dollars for public education.
  • Provides $5 million in one-time, non-recurring funding for instructional supplies. Under the House budget, state funding for instructional supplies would remain nearly 50 percent below peak 2009 spending when adjusted for inflation.
  • Provides $11.6 million in one-time, non-recurring funding for textbooks and digital materials. Under House budget state funding for this area of the budget would remain 34 percent below pre-recession spending when adjusted for inflation, which results in NC students being limited by out-of-date resources.
  • Provides $25 million for Literacy Coaches to support Read to Achieve initiative, which provides additional educational services to third-grade students who are not reading at grade level by the end of third grade. State lawmakers expanded the initiative to 1st and 2nd graders last year.
  • Cuts state funding for 1st and 2nd grade reading camps in half to $10 million from $20 million. Also changes nature of this funding from recurring to one-time, non-recurring funding.
  • Cuts $26.8 million in state funding for additional 1st grade teaching positions that were supposed to be filled beginning with the upcoming 2016-17 school year. The cut means that these would-be state-funded teacher positions are no longer available.
  • Provides $1.3 million to reinstate state funding for salary supplements to instructional coaches who have earned National Board certification.
  • Changes nature of state funding for Communities in Schools to one-time from recurring funding. Communities in Schools is a local-based dropout prevention initiative dedicated to keeping kids in school and helping them to succeed.
  • Provides $5.8 million to increase funding for Special Education Scholarship grants (vouchers), more than doubling the current budget. The program provides scholarship grants of up to $4,000 per semester for eligible K-12 students.
2017 Fiscal Year State Budget, NC Budget and Tax Center

Justice and public safety budget proposed by House doesn’t address unmet needs

The revised Justice and Public Safety budget proposed by House leadership for the upcoming fiscal year entails a 0.29 percent, or $5.3 million, increase to the original JPS budget passed by state lawmakers last year. Despite many unmet needs in North Carolina such as re-entry services for ex-offenders returning into local communities, this bare-bones budget continues an austerity approach that favors tax cuts over reinvestment.

Additional spending items in the proposed revised budget largely consist on one-time funding for various initiatives, including:

  • Provides $350,000 in one-time dollars to update Alcohol Law Enforcement radios.
  • Provides $507,784 in one-time dollars for the construction and development of first generation School Risk Management Plans for public schools.
  • Provides a one-time $187,070 appropriation to expand the Center for Safe School’s pilot tip-reporting program for middle and high schools.
  • Provides a one-time $1.1 million appropriation and a recurring $301,276 appropriation to equip and operate the new Western Crime Lab in Edneyville, NC.
  • Provides a one-time $640,000 appropriation for equipment at the State Crime Lab.
  • Provides a one-time $2 million appropriation for outsourcing forensic analysis services, including toxicology and DNA, at the State Crime Lab.
  • Provides a one-time $250,000 appropriation to digitize mental health records in the judicial branch.

Two items that are not in this budget proposal:

  • Provides no funding for drug treatment courts, which provides a more cost-effective treatment option for drug offenders and cost a fraction of the cost to keep these individuals in prison. The Governor’s budget included funding for these courts.
  • Provides no additional funding to Indigent Defense Services for counsel assigned to those unable to pay for legal representation.