Education

NC families and school boards argue state should move $1.7B from general fund to schools

Posted October 31, 2021 6:00 a.m. EDT
Updated November 2, 2021 1:59 p.m. EDT

A gavel next to a stack of court records.

— North Carolina budget and finance leaders should take “the necessary actions” to transfer hundreds of millions of dollars from the state’s general fund to schools, attorneys for five school boards and families of students in six school districts argued in court filings late Monday.

The money should go to three state entities to use as prescribed in a plan approved in state Superior Court in June, they wrote. The state would have 30 days to make this happen, according to the court filings obtained by WRAL News.

That money includes $1.5 billion to the North Carolina Department of Public Instruction, $189.8 million to the North Carolina Department of Health and Human Services and $41.3 million to the University of North Carolina System.

The court-approved plan is designed to fund education more equitably and more robustly. It’s part of the so-called Leandro lawsuit, filed in 1994 and which has led to state Supreme Court orders, as recently as 2004, to fix what justices have determined to be a broken school funding system.

“The status of this case is both distressing and avoidable,” the parties wrote in their filing Monday. “For seventeen years, the children of North Carolina have waited for the State to fulfill its constitutional obligation of ensuring that all students have the opportunity of a sound basic education. The right to a sound basic education cannot be understated. It is one of the few rights recognized in North Carolina as a ‘fundamental right’ and one whereby the State has an express, affirmative obligation to deliver.”

The proposal comes from all plaintiffs and plaintiff intervenors. That includes school boards in and students enrolled in the low-wealth Cumberland, Halifax, Hoke, Robeson and Vance county school districts (who originally sued), families in Charlotte-Mecklenberg Schools known as the “Penn Intervenors,” and Charlotte-Mecklenberg Schools. Charlotte-Mecklenberg Schools is also a "realigned defendant" in the case because the Penn Intervenors had alleged the district had also fallen short of its education obligations.

The Penn Intervenors separately filed a brief in support of the order.

By law, the state is supposed to fund education, while counties fund facilities. But many counties are using local funds to pay for education funds they say they need from the state but aren’t getting.

State lawmakers have proposed funding only some of requirements outlined in the plan. Republican leadership has argued the courts can’t set the budget, and those lawmakers aren’t sold that the plan would close achievement gaps among students and schools. Proponents of the plan have called those gaps “opportunity gaps,” stemming from disparate resources.

Last month, Superior Court Judge W. David Lee, growing impatient with legislative inaction on the court case, asked plaintiffs to submit orders that they think he should issue to force lawmakers’ hands. Monday's proposed order from all three plaintiffs and intervenors were in response to that request. The state has until Nov. 8 to respond.

This year and next year, per the plan, the state should work toward increasing and improving the pipeline for teachers and administrators and diversifying that pipeline. The plan also calls for studying competitive employee salaries while providing interim boosts in pay, among other things.

North Carolina's average teacher salaries are below most states’, though they remain above the average salaries in most of the rest of the Southeast. Average starting teacher pay remains below neighboring states, according to the latest National Education Association report on teacher pay, compiled from 2019-20 school year data.

Earlier

Groups fighting for more equitable education funding will tell a judge Monday how to incentivize lawmakers to change laws and spend more on schools.

State Superior Court Judge W. David Lee has ordered the state to change how it funds schools and to spend billions more doing so.

It’s part of the 27-year lawsuit known as the “Leandro” case, which resulted in courts finding that the state wasn’t giving counties the money they needed to provide a “sound basic education” to students.

Since lawmakers have not proposed, nor agreed upon, a plan to comply with the court order, Lee asked plaintiff attorneys Oct. 18 to propose a way for him to use his “remedial powers” to force lawmakers’ hands.

Lee approved a plan agreed upon by the plaintiffs and defendants in June that would resolve the case, if implemented.

“I think everyone knows I’m ready to pull out of the station and see what’s at the next bend,” Lee said at the Oct. 18 hearing.

Plaintiff attorneys have until Monday to submit their proposed order for Lee to issue. The state will have a week to respond, and then Lee will schedule another court hearing.

Republican Senate President Pro Tempore Phil Berger, R-Rockingham, and House Speaker Rep. Tim Moore, R-Cleveland, have said they don’t intend to fund the court-approved plan as requested.

They say Lee doesn’t have the authority to force the legislature into a funding plan, and that lawmakers are constitutionally designated to create the state’s budget. Legal experts have said standoffs between legislative and judicial branches are murky waters but have taken issue with the notion that lawmakers aren’t beholden to court rulings.

In advance of the filings Monday, WRAL News below has summarized the plan, what the law says about who funds schools, what the data says about who is funding schools, and what led to this point.

What the so-called 'Leandro' plan would do

The plan calls for more than $5.6 billion over eight years, with some permanent annual spending. In the two-year budget being negotiated now, more than $1.5 billion would be needed.

North Carolina House and Senate proposed budgets fund about a third and an eighth of that, respectively.

The state has $5.7 billion in unspent revenue from last year. But other plans and proposed tax cuts totaling $2.5 billion in the next two years would reduce the state’s budget flexibility.

The goal of the plan is better teachers and principals, more support for struggling students and more learning opportunities — especially for the state’s low-wealth counties.

The Leandro plan calls for meeting seven basic goals:

  • Developing, recruiting and retaining teachers
  • Developing, recruiting and retaining principals
  • “Adequate, equitable, and predictable” funding and resources to schools
  • Student performance and accountability that meets a “sound basic education”
  • Creating an assistance and turnaround system for low-performing schools
  • Improving and expanding early childhood education and pre-kindergarten
  • Aligning high school and postsecondary and career expectations and opportunities

Within the plan are numerous suggestions for adding or changing laws and policies, such as removing the cap on funding to educate children with disabilities.

Who is responsible for paying for education in North Carolina?

By law, the state is supposed to pay for education, while counties pay for educational facilities and other capital needs. The federal government provides some funding for federal programs, like special education or Title I lower-income schools. Counties are permitted to raise local funding for endeavors beyond capital needs.

But school districts alleged in the 1994 lawsuit, and on other occasions, that state funding is insufficient and that counties are having to supplement the necessities the state isn’t providing.

The plaintiffs in the five low-wealth counties that filed the lawsuit further claimed they didn’t have the tax base to provide what they needed and weren’t getting from the state, unlike wealthier counties that can raise more money on lower tax rates.

The state contributes about two-thirds of the money that goes toward North Carolina schools. Last school year, that was about $10.3 billion, according to North Carolina Department of Public Instruction data.

About another $1 billion came from the federal government, and $3.1 billion came from counties. County funding has dropped since the pandemic began, from about $3.4 billion, while state and federal funding has not.

A timeline of events in the Leandro case

The lawsuit is based on the North Carolina Constitution, which says “equal opportunities shall be provided for all students.”

  • 1994: Parents, students and districts in low-wealth Cumberland, Halifax, Hoke, Robeson and Vance counties sue the “State of North Carolina” over inadequate education funding
  • 1997: The state Supreme Court adopted the term “sound basic education” to describe the quality of education they believed the Constitution had promised. That meant students should have fundamental skills and knowledge to allow them to function in society, make informed decisions and compete for jobs or post-secondary education.
  • 2002: A superior court ruling found the state had violated students’ rights to a “sound basic education.” The ruling ordered the state to fix it by providing high quality teachers in every classrooms, high quality principals in every school, and “resources necessary” to make sure all children can have what they need to obtain a “sound basic education.”
  • 2004: The North Carolina Supreme Court upholds that ruling.
  • December 2019: The first formal plan to address the order is submitted for review. It’s produced by WestEd, with input from the Learning Policy Institute and NC State’s Friday Institute for Educational Innovation.
  • March 2021: Plaintiffs and defendants submitted an agreed-upon version of that plan to Lee in March of this year.

CORRECTION: An earlier version of this article incorrectly stated how North Carolina ranks in average teacher salary compared to nearby states. North Carolina's average teacher salaries are below most states’, though they remain above the average salaries in most of the rest of the Southeast. Average starting teacher pay remains below neighboring states, according to the latest National Education Association report on teacher pay, compiled from 2019-20 school year data.

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