Affidavit: NC still $677.8M short of Leandro education plan
North Carolina is $677.8 million short of its funding obligations for the long-running Leandro education adequacy lawsuit, according to an affidavit filed this week.
The affidavit suggests far greater bipartisan political favor for educator salary increases than for most other education endeavors; what has been funded among the lawsuit’s obligations disproportionately favors higher pay and has left other efforts — namely, increasing staff, providing permanent professional development and pre-kindergarten and early childhood education initiatives — more than $600 million short.
A judge will weigh the estimates, and forthcoming arguments related to them, before state executives are compelled to write checks to fund what’s left.
Anca Elena Grozav, the chief deputy director of the State Budget for the North Carolina Office of State Budget and Management, conducted the analysis submitted in the affidavit, which was submitted by the state. It comes after a state Supreme Court order last month called for that money to be distributed to education agencies in a move that would bypass the General Assembly. That move around lawmakers has generated considerable opposition from many of them, including North Carolina Senate President Pro Tempore Phil Berger, R-Rockingham, and state house Speaker Tim Moore, R-Cleveland, and the state controller’s office.
Little else other than Grozav’s filing has occurred in court since the Nov. 4 order. State Controller Nels Roseland has since indicated, through other parties in the case, that he intends to raise procedural questions about how he can distribute the funds. Roseland had opposed being ordered to distribute the money. The state Supreme Court will soon flip from a 4-3 Democratic majority to a 5-2 Republican majority, following the Nov. 8 elections, though its order already remanded the case back to trial court.
The state Supreme Court ordered the state to determine how much money was owed this year — and past-due last year — to education agencies to carry out a plan to expand education services and support.
That plan, often called the “Leandro Plan,” is a 2021 agreement between school boards and the state intended to fix what the North Carolina Supreme Court said in 2004 was broken with the state’s education system.
The plan, known in court as the “comprehensive remedial plan,” calls for at least $5.6 billion in new, annual education spending by 2028 to shore up school resources, as well as numerous policy changes concerning school improvement and accountability.
The order issued by the North Carolina Supreme Court on Nov. 4 applies to just the second and third years of the plan, which originally called for $1.75 billion, before the most recent state budgets partially funded elements of the plan.
Judge Michael Robinson determined in April the state still owed $785 million toward the second and third years of plan, following a budget passed and signed into law in November 2021. But in July, lawmakers approved another budget for the 2022-23 fiscal year. The state Supreme Court’s order called for the $785 million figure to be revisited in light of that new budget.
Berger and Moore, who have intervened in the case in opposition of the plan, could, as they did in the spring, ask legislative budget staff to submit their own estimates. In the spring, Robinson mostly dismissed those staff’s estimates of much higher funding.
What the budget does and doesn’t cover
Grozav’s review found the new budget didn’t make as big of a dent in the plan as the one before it.
Grozav listed $198.6 million in additional funds through the budget, nearly all for higher non-administrative educator pay.
However, Grozav considered $91.2 million of the additional educator pay to be more than what the plan required, while still listing $49.4 million from last year in higher educator pay to be “unfunded.” In other words, the budget this year does not include raises retroactive to last year and includes higher than specifically requested raises this year.
The plan did call for a study of competitive school employee pay, estimated to cost $200,000, that went unfunded. The study would result in potential additional raises in the future but were not scheduled in the plan to begin until the 2024 fiscal year at the earliest.
The latest budget, according to Grozav, also included $9 million in additional pre-kindergarten seats, $6.8 million in higher principal and assistant principal pay, and $3.9 million toward covering the cost of a school meal for children qualify for reduced-price, but not free, school meals.
That $3.9 million was sufficient to cover what the plan called for, according to the affidavit, though the funding for pre-kindergarten seats and administrators fell short.
Of the nearly $1.1 billion Grozav counts as funded, $536.9 million has gone toward higher pay for teachers and other educators, and $33.7 million has gone toward higher pay for principals and assistant principals. That’s more than 53% of funding. Grozav isn’t counting another $91.2 million that’s also for higher pay. The plan called for $586.3 million for higher teacher and other educator pay — about a third of all funding measures included in the plan.
The budget leaves several other items untouched or underfunded by tens of millions of dollars, according to the affidavit. The remedial plan calls for $20 million last year and $30 million this year for more teaching assistants. Lawmakers reduced teaching assistants several years ago.
The plan calls for $40 million last year and $80 million this year toward more support professionals, such as nurses and psychologists, and the budget funds less than half of that at $52.6 million total.
The plan also calls for more pre-kindergarten and Smart Start seats for early childhood education, to the tune of $111.9 million total between both years. The budgets, according to Grozav, funded only $34.2 million.
The plan required $36 million toward wage assistance for childcare workers, for a program called WAGE$, and the budget did not fund any of it.
What’s next in court
Since the Leandro case has been sent back to the trial court, Judge Robinson hasn’t issued any orders, such as a briefing schedule for parties to submit their arguments on how much of the remedial plan has been funded.
His docket, housed in business court, notes only the Supreme Court’s filing and what parties have submitted since.
Last week, Melanie Dubis, an attorney for the school boards that sued back in 1994, filed a report to the court saying parties had worked out their own schedule. She cited Business Court Rule 14.3, which states parties can determine a schedule among themselves for a case on remand to a lower court, if the judge does not set it himself.
Dubis wrote that attorneys for the school boards and the state — the parties that agreed to pursue the remedial plan in 2021 — decided any party in the case should file their brief by Jan. 20.
One member of that group disagreed with the schedule, however.
State Controller Nels Roseland told parties, according to Dubis’ filing, that he believes “additional procedures are needed to assure an accurate and responsible handling of any money which the Controller authorizes.”
Roseland and his predecessor, Linda Combs, had disputed — prior to the Nov. 4 ruling by the state Supreme Court — that they have the authority write a check without the General Assmebly’s express permission. Dubis wrote that Roseland planned to submit of his concerns in court. As of Thursday evening, he had not submitted anything.
The state Supreme Court’s opinion ordered the transfer of funds from state executives to educational entities, without the standard process of lawmakers appropriating funds through a bill. Executives can only access funds through appropriations, but the court’s opinion upholds an argument that the state’s Constitution — which guarantees adequate education access — suffices as an appropriation of funds in this instance.
The court order told state executives — including the treasurer, controller and the state budget director — to transfer funds to education entities, once the trial court judge determines what the remaining funds necessary are.
With five years left of the plan and negotiations of the state’s budget next year about to start, a legal dispute over whether lawmakers are complying with the plan could come up again, soon.
Democratic Gov. Roy Cooper favors the remedial plan agreed to in court, while Republican leaders of the state General Assembly do not.
After vetoing a budget in 2019 and leaving the state government in holding pattern for two years, Cooper has negotiated with Republicans on the last two budgets and signed them into law at less than what he’s asked for.
