2017 Fiscal Year State Budget, Back to School Series, NC Budget and Tax Center

Back to school – Ensuring a high quality education for all students

This is the first of a Back to School blog series (see Part 2, Part 3, Part 4 and Part 5) that highlight various issues to be aware of as the 2016-17 school year kicks off.

It’s back to school time, and more than 1.5 million students are preparing to embark upon a new school year. Currently the 10th largest public school system in the nation, North Carolina has experienced steady growth in the number of students entering school doors in local communities across the state – enrolling more than 100,000 additional students over the past decade. This makes it more important than ever to increase investment in schools to ensure the growing number of students in North Carolina receive a high quality education.

The makeup of students in public schools has changed over time. Last school year, no single race or ethnic group represented a majority of North Carolina’s student enrollment—a reflection of the changing demographic trend in the state’s broader population. Furthermore, one of every two students in public schools qualified for free or reduced school meals, which indicates that a significant number of students reside in low- and moderate-income households and face persistent economic challenges.

One way to ensure that our schools have the resources to provide a quality education to all students, regardless of their socio-economic background, is through the state budget, which serves as an important source of education funding for our schools. For the upcoming school year, the state budget under which schools will operate is a mixed bag of incremental progress in some areas and persistent lagging support in other areas. For the 2016-17 school year, state funding per student remains 8.1 percent below 2008 pre-recession level, with more than 81,000 additional students enrolling in public schools during this time. Consequently, our schools are challenged with educating more and more students with fewer resources.

Back to School - State Budget

 

Lawmakers limited their ability to boost investment in public schools by passing costly tax cuts in recent years that largely benefit the wealthy and profitable corporations. The state’s ability to invest in public education will continue to be limited in the years ahead as the cost of the tax cuts grow larger. For the current fiscal year, these tax breaks reduce available revenue by $1.4 billion, dollars that otherwise would have been available to lawmakers to boost investments that promote student achievement. Once all tax changes are fully in place, this annual cost grows to more than $2 billion. Read more

NC Budget and Tax Center

More than 20 percent of NC students attend a high-poverty school

According to data from the National Equity Atlas, one out of every five children in North Carolina attends a high-poverty school. Among students of color, that number is one in three. High-poverty schools are defined as schools in which 75 percent or more of the student body qualifies for the federal free or reduced priced lunch program. Because many high-poverty schools are faced with having limited resources to educate and care for students who often need extra supports, they often struggle to provide a quality education equal to their middle-class and wealthier counterparts.

The concentration of low-income students in high-poverty schools cannot simply be explained as a rise in poverty. Over the past decade, North Carolina has seen only a modest increase in the number of students who are eligible to receive free or reduced lunch. Prior to the beginning of the recession, just over 48 percent of students applied for the free or reduced lunch program in the 2007-08 school year. That number peaked at 58 percent in 2013 school year and has since decreased to 53 percent this past year.  In the same time period, the percentage of students enrolled in high-poverty schools has nearly doubled.

Rather than an increase in the number of low-income households, concentrated high-poverty schools are often the result of economic and racial segregation. Rising income inequality and a deterioration of the social safety net has contributed to a decline in middle class and mixed-income neighborhoods. Although this trend in socioeconomic and racial segregation is not exclusive to North Carolina, it is particularly damaging in a state that ranks 43rd in the nation in per pupil funding. To make matters worse, there are large gaps in per pupil spending across counties; in 2012, the highest spending county spent $2,280 more per student than the lowest-spending county.

The gap in student achievement between low- and high-income students has grown. A large part of this expanding achievement gap is explained by the increasing segregation of schools. If we do not address the proliferation of high-poverty schools, many of our students will leave high school unprepared for post-secondary education and underqualified to participate in the workforce.

While a the achievement gap and an unprepared workforce are real problems, the reality is that the increased concentration of students in high-poverty schools is only a symptom of a larger issue. When we fail to make adequate public investments and address systemic barriers, inequality expands and opportunity shrinks. And far too often, children, especially children of color, pay the costs.

NC Budget and Tax Center

Three key points in assessing the Carolina Comeback

Our annual State of Working North Carolina report will be out next week and detail the ways in which the national recovery has yet to reach all North Carolinians and every North Carolina community. In the meantime, a debate playing out on the pages of the News & Observer deserves attention today

As Labor Day approaches, it is clear that a more careful consideration of the state’s economic well-being is needed instead of declarations of a “Carolina Comeback.”

Let’s be clear: There is nothing partisan about reviewing the data and considering whether the state is experiencing a strong recovery.  North Carolinians deserve an accurate accounting of how the economy is doing and where policy choices have fallen short of supporting better outcomes.

There is no debating that the state has seen employment growth, that wages appear finally to be growing, and that productivity (aka GDP) is on the rise. The latter is a fundamental requirement of an economic expansion (at least nationally) and the growth in jobs and wages should follow suit now that we are seven years past the start of the national recovery.

The issue is not whether these things are happening, but whether they have met our expectations for what an expansion should look like. When looking at the numbers relative to our neighbors, our nation and even our past performance, the current national economic recovery is failing to live up to expectations and our state’s great potential.

Here are some key data points that should be front and center when claims of the state’s robust recovery are cited. Read more

NC Budget and Tax Center, TANF 20 Years Later

Redesigning TANF to lift more families out of poverty

The 1996 welfare law that created Temporary Assistance for Needy Families (TANF) has many shortcomings, as we’ve detailed in a blog series over the past week. Primarily, TANF fails to adequately support families with children who are poor through cash assistance and meaningful work activities—despite the law’s two core missions of providing a basic safety net and promoting work. The result has been grim, including a shocking spike in the number of destitute families living in crisis despite doing their best to get by.

Some folks ignore poor families’ lived experience over the past two decades and have declared that TANF has been a success overall. They often point to the impressive employment gains—often in low-wage jobs—among single mothers in the immediate years following the law’s implementation. Yet, they ignore the booming economy and the pro-work incentives built into an EITC expansion. Those benefits eroded in the aftermath of the 2007 economic downturn, which resulted in fewer jobs, deeper levels of poverty, and a sharp drop in TANF cash assistance. Economic context is key, and the uneven and weak economy has exposed the fault lines in the TANF design.

Overall, there is broad bi-partisan consensus that Congress needs to redesign the 1996 welfare law to strengthen TANF and support pathways to work that allow families to afford the basics. Big picture reforms should include ensuring that North Carolina and other states (1) serve a minimum level of families and children living in poverty and (2) set minimum levels for cash benefits. These floors would help prevent the drops in TANF’s reach that we experienced over the past 20 years, and, if set at a decent level, would restore some of the purchasing power that has since been lost. Congress should also require states to use more of their TANF dollars on core activities — work, work supports, and basic cash assistance. This reform would ensure that states use TANF to serve truly needy families, rather than supplant state funding and pay for tax cuts. Read more

NC Budget and Tax Center, TANF 20 Years Later

Welfare reform doesn’t reflect our best ideas about addressing poverty

This blog is the 4th post in a series that will detail how lawmakers have weakened Temporary Assistance for Needy Families (TANF) over the past 20 years, explain why TANF is a cautionary tale rather than a model for other work and income support programs, and map out a better way forward.

As North Carolina and the country continue to contend with elevated poverty levels despite seven years of an economic recovery, many have suggested that the principles of the 1996 reform of welfare (then AFDC, now Temporary Assistance for Needy Families or TANF) should serve as a model for addressing poverty in our state and nation.

The changes, made 20 years ago this week, to the way in which we ensure that people living in poverty can meet their most basic needs and have a pathway out of poverty were based on three core ideas:  that work was the pathway out of poverty, that states would know best how to meet the needs of their communities, and that services—from training to marriage counseling—could effectively replace cash assistance. While these ideas may not have been inherently wrong, they resulted in concrete policy directions:  time limits, work requirements, block granting and funding for services to agencies over direct payments to poor people.

A review of the evidence suggests that the guiding ideas behind welfare reform fail to deliver better economic outcomes across the board and have in fact increased the number of people living in deep poverty,  fallen short in times of economic distress and generated a whole host of unintended and negative consequences because poor households continue to lack income to meet basic needs.

It is these same ideas that have been suggested for every program that seeks to deliver support to low-income households, from food assistance to Medicaid.

Here are the problems with these specific ideas about poverty and the policy choices that stem from them: Read more