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.

Judge Howard Manning’s misguided views on education should also be retired

Retired Judge Howard Manning

Now-retired North Carolina Superior Court Judge Howard Manning’s chief claim to fame during a lengthy judicial career came from overseeing the landmark Leandro school funding case from 2000 to 2015. Over this period, Manning held several hearings, often scolding state officials for failing to provide North Carolina’s students with the education they are owed under our state constitution.

While these hearings helped highlight the state’s unwillingness to live up to its constitutional responsibilities, particularly for low-income students, the judge never placed concrete demands on state lawmakers. As a result, his hearings produced few tangible results for North Carolina’s students. Independent school experts concluded that this period moved our state “further away from meeting its constitutional obligation to provide every child with the opportunity for a sound basic education than it was when the Supreme Court of North Carolina issued the Leandro decision more than 20 years ago.”

Since Manning’s retirement, dramatic advancements in the Leandro case are bringing us much closer to a school system that meets the needs of our students. In 2017, the Leandro plaintiffs and the state agreed that North Carolina had been failing its children for far too long and that the state needed a clear, comprehensive plan. Judge David Lee appointed some of the nation’s leading education experts to develop the plan. Their report, referred to as the WestEd report, provided the state with the long-overdue roadmap of investments and reforms necessary to deliver a “sound basic education” to all.

As a result, the state is now better positioned to meet its constitutional obligations than we ever were when the case was led by Manning. We now know exactly what needs to be done. This information has invigorated stakeholders across the state who are now mobilizing to pressure the General Assembly to enact these long overdue measures.

Enter Howard Manning, who has emerged from a quiet retirement to offer a recent interview and an op-ed, where he expresses skepticism towards the court’s current approach and lauds a failed Republican program focusing on early-grade literacy. Republican leaders are now seizing upon Manning’s misinformed commentary to justify their own inaction and unwillingness to improve our schools.

Manning’s op-ed claims the answer to delivering a sound basic education to all students is not money, but “competent management” from principals and “effective teaching.” In other words, it’s not the General Assembly’s well-documented decade of austerity and incompetence that’s to blame, it’s those no-good teachers.

Manning’s view flies in the face of overwhelming academic research, our own history in North Carolina, and his own past views.

In recent years, research has shown conclusively that increases in state funding, particularly those brought about in school funding cases like Leandro, boost test scoresraise graduation ratesreduce the likelihood of both poverty and incarceration in adulthood, and improve intergenerational social mobility. Notably, almost all of these studies show that the benefits from state funding increases tend to be larger for Black students and students from families with low incomes (i.e., the very children who were systematically denied access to a sound, basic education while Manning oversaw Leandro).

We don’t only have to look to policy experts. Our own experiences in the 1980s and 1990s also show how smart increases in state investment can improve achievement and narrow opportunity gaps. A recent report from the Learning Policy Institute detailed how “North Carolina’s sustained investments over two eras of reform in the 1980s and the 1990s enabled it to become the first high-poverty Southern state to achieve above national norms and to make more progress in closing the achievement gap during the 1990s than any other state.”

There was a time not so long ago that Judge Manning himself understood that adequate funding is a necessary component of student success. Read more

General Assembly’s latest spending proposal fails to meet schools’ basic needs

This week offered the General Assembly an opportunity to address two glaring needs in our public schools:

  1. Making progress towards delivering every child the education they are owed under our constitution, as required under the long-running Leandro court case; and
  2. Helping schools meet the increased costs of operating under the COVID pandemic.

In both cases, they have fallen well short of what this moment requires.

Earlier this week, we published analysis showing the extent to which the Governor’s budget proposal addresses Leandro. Now, the General Assembly has released its own spending plan, a proposed committee substitute for HB 1105. Not surprisingly, it does little, if anything, to try to provide students with the education they are owed under our constitution.

It is important to note that neither the Governor’s plan, nor the General Assembly’s, provide the sustained recurring investment necessary to deliver a sound basic education. But the one-time funding under the Governor’s spending plan potentially provided a bridge for building sustained investments in the next legislative session. Unfortunately, the General Assembly couldn’t even muster a short-term fix.

The General Assembly also gets a failing grade for addressing schools’ pandemic-related operating costs. The State Board of Education presented its additional funding needs last week. The Governor’s budget proposal satisfied nearly all of the State Board’s request. The General Assembly’s plan, however, falls well short.

In addition to inadequate funding, the General Assembly’s plan includes expansion of school choice schemes that will make it more difficult for traditional, inclusive public schools to meet their students’ needs. The plan would expand funding for North Carolina’s two virtual charter schools, despite their being consistently among the worst-performing in the state. The General Assembly also wants to expand eligibility for the state’s three voucher programs, largely by opening these programs to students who were already planning on attending a private school.

The lone bright spot in the General Assembly’s plan is a provision that would hold schools harmless for COVID-related enrollment decreases. This well overdue measure would certainly help our schools and deserves a stand-alone vote.

Ultimately, this spending proposal is par for the course for this General Assembly. They continue to pair a series of half-measures that fall short of meeting our state’s needs with toxic, controversial proposals that would benefit the donor class at the expense of regular North Carolinians. Come November, we’ll see if this approach continues to have success politically. In the meantime, however, we can all recognize that it’s an abysmal strategy for meeting people’s needs.

Kris Nordstrom is a Senior Policy Analyst with the North Carolina Justice Center’s Education & Law Project.

How the governor’s budget proposal would advance a sound basic education

Despite fits and starts over the years, North Carolina lawmakers have consistently failed to provide children with the sound basic education that they are owed under our state constitution. Since the Leandro court case was filed in 1994, the courts have consistently found the state falling short of meeting this basic obligation.

The December 2019 publication of the Leandro consultant’s report marked an important turning point by offering lawmakers a clear pathway to delivering children the education they are owed. The report outlines a series of investments and reforms needed to deliver a constitutionally-compliant public school system by the 2027-28 school year.

Of course, the COVID-19 pandemic has changed things. While our state constitution makes no exceptions for delivering basic rights during a pandemic, the Leandro parties agreed to a short-term plan for the 20-21 school year that was dramatically pared down from the recommendations of the Leandro consultant’s report. Whereas the consultant’s report recommended increasing early childhood and public school budgets by $1 billion this year, the short-term action plan called for only $431 million in new spending this year.

With the release of Gov. Cooper’s 20-21 budget proposal, we have our first look at the extent to which lawmakers are prioritizing the delivery of a sound basic education against the other challenges faced across the state. The table below compares the short-term plan submitted to the courts in June against the governor’s proposed budget.

From a total dollar standpoint, the governor’s plan falls a bit short of meeting the funding goals outlined in the short-term action plan.

For those hoping the state will make progress towards meeting its constitutional obligations under Leandro this year, there are two additional concerns with the governor’s plan.

First, all appropriations under the governor’s plan are nonrecurring. The money Gov. Cooper would provide to public schools would go away at the end of the school year. That means that the plan – even if adopted by the General Assembly – would represent just a one-year bandage rather than a sustainable, long-term investment. While the additional funding under the governor’s plan would certainly help for this school year, it will not help long-term planning. Nonrecurring would leave us back at step zero next year.

Second, the governor’s plan uses two revenue sources to fund its Leandro activities: state General Fund dollars and federal Coronavirus Relief Funds (CRF). It is unclear whether federal guidelines would permit using this revenue source for the actions detailed under the governor’s budget. These funds must be used for expenses incurred due to the COVID-19 pandemic. However, providing a sound basic education is a long-term obligation independent of the COVID-19 pandemic. There is substantial room for interpretation here, but it seems hard to argue that something like “expanding support and mentoring for first-year teachers” is a new expense incurred due to the pandemic.

Ultimately, the governor’s proposal would do little to help the state make real progress towards providing every child in this state with the education they are owed under our state constitution. Largely, this is because the General Assembly’s poor tax and budget have left the state with little money and glaring needs. Partly, this is because the governor is unwilling to propose a tax increase during a recession. All told, it leaves lawmakers with few good options. Regardless, meeting our constitutional obligations requires sustained, long-term investments, not short-term band-aids.

With the General Assembly all but certain not to provide such investment, it appears increasingly unlikely the state will make meaningful progress toward meeting its constitutional obligations under Leandro this year.

Kris Nordstrom is a Senior Policy Analyst with the North Carolina Justice Center’s Education & Law Project.

Legislature must act to hold school budgets harmless for COVID-related enrollment decreases

For the second year running, the General Assembly has left town without fulfilling a basic role of state governance: passing an updated budget bill to meet the needs of North Carolinians. What this means for our public schools is that – at least initially – they will once again be operating under a budget that is essentially unchanged from Fiscal Year 2018-19.

School finances, however, are far from safe. Unless the General Assembly acts within the next few months, COVID-related enrollment decreases could decimate the state budgets for districts and charter schools.

At issue are state laws and State Board of Education policies that mandate the reduction of school district and charter school budgets if enrollment falls short of anticipated levels. There’s substantial evidence that enrollment may drop precipitously this school year. A recent survey from Elon University found that 29% of respondents preferred full-time remote learning over in-person or hybrid models and the state’s nonpublic education system’s website crashed earlier this month, apparently due to a surge of parents applying to home school their children. If enrollments crater, so will school budgets, jeopardizing not just the education, but the safety of our students.

Under normal conditions, there is some logic to adjusting school budgets mid-year based on enrollment data. School budgets are based partially on projected enrollment figures. In a normal year, some of those projections will be high and some will be low. The current laws allow the state to reduce budgets in districts or schools where projections were too high and re-allocate those funds to districts or schools where projections were too low.

That line of logic falls apart, however, in the face of a pandemic when all of our schools are facing substantial enrollment decreases. Current law will create large mid-year cuts to school budgets. Barring additional action, this money won’t be redeployed to meet other vital needs, but instead sit unused in state coffers.

State leaders have been aware of this issue since they returned to Raleigh in late April to appropriate federal funds and make other changes to school laws necessitated by the pandemic. However, they failed to make the changes necessary to hold school budgets harmless for pandemic-related enrollment decreases. They again failed to act when they returned to Raleigh in June.

Luckily, there is still time to act. Enrollment-based budget adjustments are not made until the after the first full month of school. Still, lawmakers should act soon to provide district and charter school leaders – who all find themselves in impossible positions – with one less thing to worry about. A little budget stability will go a long way towards helping school planning through a volatile, uncertain period.

Below is a more detailed description of how enrollment changes impact state funding of our schools. Read more