Measure would let cities fund charter, traditional schools

A section of the budget expected to pass this week opens the door for municipalities to invest property tax revenue in schools that serve their residents. The money could go to public schools operated by the county or to charter schools, and the schools wouldn't have to be within the city limits.

Critics were surprised to find the measure dropped into the budget by the General Assembly's Republican majority, and Democrats in the minority at the statehouse said they fear unhealthy competition will result, along with unforeseen consequences.

The North Carolina League of Municipalities, which wasn't part of negotiations on the change, called it "a monumental policy change in North Carolina that is receiving very little vetting."

Most cities are prohibited from funding schools, which is generally a state, county and federal function. This has become an issue because several suburban towns in Mecklenburg County are unhappy with the way Charlotte-Mecklenburg Schools has handled their area.

Separate legislation would allow those four towns, and only them, to set up their own charter schools and break away from the local school system. But this effort ran into the funding prohibition, prodding the budget change. While House Bill 514 only affects four towns, the funding change would be statewide.

State Rep. Bill Brawley, R-Mecklenburg, who represents Matthews and Mint Hill, said schools there have become overcrowded, in part because the school district earmarks extra funding for poorer areas of the county.

"The school board can’t really fund all their needs," Brawley said Tuesday. "This provides cities with an opportunity."

There are cities all over the state that could benefit, he said. Relatively well-off cities in otherwise rural counties could help upgrade local schools, if allowed, he said.

But Democrats said they fear more inequality if cities are able to break away from countywide systems. Even just the new funding mechanism will cause problems, Rep. Graig Meyer, D-Orange, said.

School systems could play county commissions and city councils against each other, Meyer said. Some schools would have revenue streams others don't, he said. Magnet schools might compete for students from cities willing to send along more per-pupil funding, leaving fewer slots for other students.

"Why do we want cities to be picking and choosing individual schools that they fund better than others?" Meyer asked.

Even some Republicans, expected to vote for the budget and this provision en masse, struggled with its details Tuesday. Sens. Ralph Hise, R-Mitchell, and Jerry Tillman, R-Randolph, questioned whether cities would have to hold referendums to increase taxes to pay for schools.

"My lawyer friends and I have been debating this issue," said Tillman, a former educator.

Tillman said he's not against the bill, but "the mechanics of this thing are not that simple." After Hise asked a similar question in committee, Brawley said it would not take a referendum to increase taxes.

Scott Mooneyham, the director of public affairs for the League of Municipalities, said the change also raises questions about whether the state's constitutional duty to fund public education may eventually shift.

"Will this remove pressure from income taxes only to put more pressure on property taxes, forcing property tax increases over time?" he asked in an email.