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Without legislative action NC schools could soon lose $132 million

The pandemic has created untold new challenges for our public schools. From managing multiple modes of delivery, being forced into making public health decisions, absorbing abuse from unhinged parents, addressing widespread student trauma, and coping with widespread staff vacancies…the last thing our schools need is for lawmakers to add to their plate. But if the General Assembly fails to act soon, North Carolina schools may see destabilizing mid-year budget reductions totaling $132 million.

Under state law and State Board policy, district budgets are reduced mid-year if enrollment falls short of anticipated levels. According to initial enrollment data released late last week, actual enrollment in the first month of school fell substantially below anticipated levels in 95 of the state’s 115 school districts. Unless there’s an odd uptick in enrollment in the next month’s data, these districts will see their state funding – already amongst the lowest in the nation – reduced by a further $132 million.

A final decision on budget reductions will not be made until data is collected for the second month of school. But if there is no change in the enrollment data – and past years show very little change – then the following would occur:

  • 95 of 115 LEAs would see their allotments reduced.
  • In total, LEAs would lose about $132.3 million.
  • Charlotte Mecklenburg Schools would experience the largest dollar reduction: $15.2 million, or the equivalent of about 220 teachers
  • Asheville City would experience the biggest percent reduction at 3.6 percent. Tyrell and Bertie Counties follow behind Asheville City with reductions of 3.5 percent and 3.2 percent, respectively.
  • The average Black student’s district would see a budget reduction of 1.58 percent while the average white student’s district would experience a reduction of just 1.37 percent.

See how your district would be impacted here.

In a normal year, there is some logic to making mid-year budget adjustments based on enrollment: the budget reductions in districts with lower-than-expected enrollment help provide additional funds to the districts with higher-than-expected enrollment.

However, this year, only six districts have initial enrollment levels that meet the criteria to be considered for possibly receiving additional funding. Unlike the laws governing budget reductions for lower-than-expected enrollment, additional funding for districts with higher-than-expected enrollment is not automatic. Budget increases are at the discretion of the Department of Public Instruction.

A detailed description of the state’s policy on calculating enrollment-based budget adjustments can be found here.

Legislators can still act before these destabilizing budget reductions are implemented. They can simply extend the prohibition against mid-year enrollment-based school budget adjustments from last year or adopt the language included in this year’s Senate budget proposal (see Section 7.23). If the language is not included in the soon-to-be-released conference budget proposal, legislators can include the language in a stand-alone bill.

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

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