Last year, North Carolina state government spent a whopping $11.6 billion on K-12 public schools. Federal and local spending added nearly $7 billion more. K-12 public education is by far the largest expense in North Carolina’s budget.
Of course, financial resources are important. They turn on the lights and the teacher is in the classroom. But so are the systems that help fund public schools and determine the efficiency of how that money is distributed and the effectiveness of how it is used.
Given the importance of this truth, one wonders why North Carolina policymakers have long chosen to generally ignore how the state funds its public schools.
It’s not because people aren’t trying. Over the past 15 years, various reports have criticized the system’s complexity, lack of transparency, lack of accountability, and unfair treatment of students and school districts. For example, a 2016 state evaluation of North Carolina’s quota system found that the system was too complex for school administrators to understand how their schools financed their operations. It turned out that it would take more than two years. Recommendations include overhauling teacher pay schedules, tying school allocations more closely to student enrollment and weighting student funding towards research.
Fifteen years after the first report was released, unfortunately not much has changed in the way North Carolina public schools are funded.
North Carolina continues to be one of the few states that funds public schools through a top-down, centralized method of resource allocation called the resource allocation model. It relies on approximately 50 different allocations, each with its own funding formula and objectives. Funding models are complex, inefficient, and lack accountability. Simply put, school finance is the problem child of North Carolina government.
Hoping to shed light on the challenges of how North Carolina funds its public schools, the John Locke Foundation published earlier this month “Financing our Future: North Carolina’s Schools.” A study on public finance was published. The report is built around important questions. The two most important are: Does our system of funding public schools ensure that students and schools are treated fairly and that schools get the resources they need when they need them? Is it transparent, accountable, and respectful of the growing number of public and private education options?
This report provides a wealth of evidence to help answer these questions. The report also highlights problems in some of the biggest systems, including the allocation of subsidies to classroom teachers, children with disabilities, and low-wealth groups. Most notably, the report shows how North Carolina’s quota system undermines the state’s ability to meet its constitutional obligation to provide an effective, fair, and uniform public education system. This is what is happening.
Thankfully, this report also provides solutions. The report urges policymakers to overhaul the current system, connect funding to students, and provide districts with a base amount per student and additional funding for students with special needs. We recommend a system to do so. Doing so, the authors say, is the best way to ensure that students and schools not only have the resources they need, but also distribute them in an efficient and responsible manner.
So how is North Carolina achieving these goals? This report provides case studies of Tennessee, California, and Indiana, which have successfully implemented student-based funding systems. and provide useful lessons for policymakers in North Carolina.
Public schools continue to be North Carolina’s largest budget item, reflecting North Carolina’s constitutional responsibility to educate our children. Funding Our Future highlights how North Carolina’s public school funding system lacks efficiency, equity, and accountability, and provides substantive recommendations and clarity to address these challenges. It shows you the path. Policymakers would do well to make this part of this most important discussion.
Bob Luebke
Dr. Robert Luebke is director of the Center for Effective Education at the John Locke Foundation.
