How are North Carolina schools funded?

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Who pays for schools?

How do governments pay for schools?

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How has funding changed since the Leandro lawsuit was filed?

Since the 1993-94 school year, the percentages of funding covered by the state, the federal government and counties haven’t really changed.

How those funds are spent hasn’t really changed, either, at least when comparing the broad categories the state uses to classify spending (salaries, benefits, services, supplies, instructional equipment and other; the state added “central office” after 1994.)

The actual dollar amounts have more than doubled from every source, outpacing inflation. Only spending on instructional equipment, from all sources, hasn’t kept up with inflation.

Salary and benefits continue to comprise more than 80% of education spending, though more of that goes toward benefits now. Services still comprise just more than 6% of spending, and supplies still comprise about 7% of spending.

The gap between the lowest-funded and highest-funded school districts has increased since the 1993-94 school year.

During the 1993-94 school year, the gap was $2,856.21 in spending per student. During the 2020-21 school year, the gap was $14,125 in total spending.

How have recessions affected school funding?

Schools are funded at a higher amount than ever before. But many people will still say the state funds certain things less than it used to for a few reasons:

The Great Recession resulted in decreases to base teacher pay and other budget reductions, such as staffing and supply cuts.

Since then, base teacher pay has risen, but not as fast as inflation.

Spending in schools has surpassed pre-Great Recession levels, adjusted for inflation. Not everything that was cut has been restored, however. The state has spent money on new projects but hasn’t funded assistant principals, instructional support or supplies at their previous levels.

How have the five original counties changed since the Leandro lawsuit was filed?

During the 1993-94 school year, the districts were all below the state average total per pupil spending. Some spent hundreds of dollars less per student than the typical North Carolina school district. Two received less per pupil from the state than most everyone else (Cumberland and Hoke, at 8% and 2% less, respectively). Robeson received only $34 more per student than average, which amounted to a 1% advantage. Vance received 3% more, and Halifax received 6% more.

During the 2020-21 school year two of the five districts continued to spend less than average per student: Cumberland, which receives hundreds of dollars less than average from the state and from the county, and Hoke, which receives more than average from the state and federal governments but which spends 57% less than average locally.

Robeson, for the first time, spent more than the state average, thanks to a tripling in federal spending. Robeson usually receives more than average from the state and federal governments but contributes far less than average locally (81% less last year).

Vance County spent 8.4% more than average, thanks to an increase in state and federal funding.

Halifax spent 36% more than average, buoyed by higher-than-average funding from all sources.

How is North Carolina different from other states in school funding?

The state is primary funder of schools in North Carolina, moreso than in most states.

But education funding has changed over the years in North Carolina and elsewhere, as nearly every state has faced at least one school funding lawsuit from lower-income families and school boards in lower-income areas.

During the 2020-21 school year, 25 states provided at least half of education revenues, excluding the District of Columbia and Hawaii, according to a National Education Association report on school finance. In 18 states, local taxes were the primary source of school revenues.

Compared to North Carolina, only 11 states had more revenue coming from the state and only 13 states had less revenue coming from local sources.

In terms of actual spending, however, the responsibility hasn’t really changed in North Carolina since the Leandro lawsuit was filed. During the 1993-94 school year, the state was the source of 67.8% of education spending, compared to 23.7% for counties and 8.5% for the federal government. During the 2020-21 school year, the state provided 66.7% of education spending, compared to 23.3% for counties and 10.0% from the federal government.

Nationally, the percentages of revenues coming from state, federal and local governments hasn’t changed much since the 1990s. But they changed quite a bit before then, following desegregation efforts and lawsuits over funding.

Six decades ago, after federal desegregation orders but before most schools desegregated, local revenues comprised just more than half of education spending nationwide (53%). Today, they’re just less than half (46%). Meanwhile, state contributions have risen from about 39% of education revenues to about 47%.

Nationwide, local property taxes have been a popular means of funding public education, and school boards often have the ability to levy property taxes. Local property taxes allow for more local control, but they also allow for wealthier areas to provide more for their schools and force lower-wealth areas to limit their offerings.

As Southern states adopted new state Constitutions when they rejoined the Union after the Civil War, and as the demand for a more educated workforce grew, the states promised free and equal educations for all. Reliance on local property taxes kept funding as segregated as the schools were.

North Carolina did not decide until the Great Depression, when many counties were unable to fund their schools, that the state would primarily pay for education. Later on, after federal desegregation orders, North Carolina schools largely consolidated into county districts, which spread state and local resources across larger and more diverse student populations.

Why have other states sued over education funding? What happened in those cases?

At least 45 U.S. states have faced a lawsuit over funding, according to a National Center for Education Statistics count of lawsuits from 1970 to 2009.

Many have resulted in significant court rulings that ordered changes. Some explicitly ordered changes to finance systems, unlike the more broad order in North Carolina that said a sound basic education was not being provided.

Changes in response to those orders haven’t always been swift, as in North Carolina.

It’s not unheard of for lawsuits to be drawn out for decades, particularly when it comes to schools. Lawsuits to force racial integration in schools are still open cases in some states.

Similarly, education funding lawsuits have dragged on for years and even decades.

But often, lawmakers in other states made efforts to comply with court rulings, though not always successfully.

It took 30 years for New York lawmakers to get a veto-proof majority to approve funding to comply with court rulings for the City of New York.

Washington lawmakers took six years to comply with a 2012 state Supreme Court ruling. That was three years after a judge held the state in contempt of court and instituted a $100,000 per day fine against the state, for each day the order wasn’t complied with.

After several adjustments and several years, the Kansas Supreme Court ruled in 2019 that Kansas was on track to comply with an education funding order.

But in Ohio, the story is similar to what’s happening in North Carolina.

There, a 1997 court ruling funding the state’s education funding system unconstitutional continues to face resistance from state lawmakers. They have increased education spending but not made fundamental changes to the funding formula.

What impact does federal COVID-19 stimulus funding have on schools?

North Carolina schools received $5.8 billion in federal COVID-19 stimulus funds, most of which last only through Sept. 30, 2024. The funds are meant to help schools buy extra safety supplies, purchase equipment for more digital and remote learning, and pay for staff and supplies needed help students whose learning has been disrupted by the pandemic. Schools have struggled to hire people for that learning recovery, and quarantines have continued to disrupt students’ learning, though not to the extent that full or partial remote learning did in 2020 and early 2021. Schools have spent money so far, largely, on retention bonuses amid higher vacancy rates, employee contracts for summer learning programs, safety supplies and technology supplies for students.