1. Education Briefings for Candidates for Office
School Finance

2. School Finance Overview
Impact of the Lottery
Budget Overview
School Finance Litigation

3. School Finance Overview

4. Data from OSBM Recommended Adjustments 2008-09, Figure 1, p. 3

5. 2006-07 Sources of School Funding
Source: DPI, Financial & Business Services, Highlights of the NC Public School Budget, February 2008
Source: DPI, Financial & Business Services, Highlights of the NC Public School Budget, February 2008

6. 2007-08 Federal Funds Provide ($2.84 B)
Who Pays For What?
Federal Funds Provide ($2.84 B)
Title I – all programs ($328.6 m)
Child Nutrition ($325.0 m)
Children w/ Special Needs ($297.0 m)
Teacher Quality ($62.4 m)
Vocational Education ($21.8 m)
Technology Grants ($5.8 m)
After School Programs ($20.9 m)
Safe & Drug Free Schools ($5.8 m)
Data from Highlights of the NC School Budget, Feb. 2008

7. 2007-08 Local Funds Provide ($1.16 B)
Additional teachers, instructional support & teacher assistants (11,432 positions)
Central Office Administrators (33.6% of total)
Salary Supplements $5,000+, Average=$1,993, $0)
School Construction, Maintenance & Debt Service
Utilities, Housekeeping, Technology, & Garage Costs
Data on supplements from DPI supplement schedule ; data on locally funded instructional and administrative staff from Highlights of the NC Public School Budget (Feb. 2008)

8. 2007-08 State Funds Provide ($7.37 B)
Who Pays For What?
State Funds Provide ($7.37 B)
Instructional Personnel ($4.1 B)
At-Risk Student Services ($220.3 m)
Children w/ Special Needs ($663.3 m)
Transportation ($360.6 m)
Low-Wealth supplemental funds ($195.4 m)
ABCs Bonus ($70 m)
Limited English Proficient ($61.2 m)

9. Largest Expense in the State Budget (37.3%)
Just the Facts. . .
Largest Expense in the State Budget (37.3%)
Enormous Business ($7.91 B)
Largest Employers in the State
Charlotte Mecklenburg Schools is among top 10 employers
Half of all districts have 1,000+ employees
Transportation (13,696 buses178,297,253 miles)
Counseling (4,380 counselors & psychologists)
Food Provider (186,564,780 breakfasts & lunches)
Maintenance staff (26,748 service workers, drivers & other laborers)
Budget data from budget report,
Transportation, staffing & meals data from DPI’s Statistical Profile.

10. NC History and how we got here…
Article IX: Education
Sec. 2. Uniform system of schools.
(1) General and uniform system: term. The General Assembly shall provide by taxation and otherwise for a general and uniform system of free public schools, which shall be maintained at least nine months in every year, and wherein equal opportunities shall be provided for all students.

11. School Funding Responsibility
School Budget and Fiscal Control Act (1975)
“To insure a quality education for every child in North Carolina, and to assure that the necessary resources are provided, it is the policy of the State of North Carolina to provide from State revenue sources the instructional expenses for current operations of the public school system as defined in the standard course of study. It is the policy of the State of North Carolina that the facilities requirements for a public education system will be met by county governments.”

12. School Budget and Fiscal Control Act (Responsibilities Are Blurred)
School Machinery Act &
School Budget and Fiscal Control Act
(Responsibilities Are Blurred)
State=current expense & programs
Counties Paid for 6,621 teachers (7%)
3,052 teacher assistants (10.6%)
2,276 instructional support (17.9%)
437 administrators (25.8%)
(16.2% of all personnel)
Counties=capital (building & maintenance)
State Has Paid $2 Billion for capital outlay since 1995 (25% of the total)

13. Data from DPI Statistical Profiles; 2007-08 based on DPI staff estimates

14. Data from the Office of State Budget & Management, http://www. ncleg

15. Data from NC Fiscal Research budget notes, http://ncleg

16. Data from NEA’s Rankings & Estimates, December 2007

18. Enrollment data from DPI Statistical Profile and UNC headcounts; General Fund and total budget numbers from OSBM’s Post-Legislative Budget Summaries

21. Budget Overview

22. Data from Governor’s Budget recommendations ; House Ed Budget as passed on third reading; State Board of Ed. Comparison of budgets posted 5/15/08; Senate budget as passed by committee 6/17/08
Source: Public School Forum based upon information from the Governor's Office & the General Assembly

23. Items of Concern…
With only $150 million in surplus for , money available for expansions of supplemental funding programs are limited.
Proposal
State Board
Governor
House
Senate
Low Wealth Expansion NO
$2.9 m
DSSF Expansion
$86.2 m
$6.0 m
$5.0 m
TOTAL $0
$8.9 m
$7.9 m
Data from budget documents (summarized in KJ’s budget comparison spreadsheet, 5/29/08)

24. 2008 Short Session: Key Issues
Teacher salary debate
Whether / how to bring to national average?*
How to balance against increases for other state employees?
Guaranteeing ABC bonuses to teachers
Funding enrollment growth – also for UNC and Community Colleges
Expanding dropout prevention grants ($15M)
Raising DSSF, AIG, special education allotments
LEA concerns with child nutrition, fuel costs
Modest expansions for More at Four, Learn and Earn Online, and other education programs
*7% increase to national average for teachers = $116M

26. Data from DPI and Fiscal Research
* The General Assembly gave additional flexibility to raise prize amounts over 50% of the total IF that will increase the absolute amount available for education transfers.
Data from DPI and Fiscal Research
Note: Reserve fund (5% of original total) is fully funded and requires no additional contributions.

27. Lottery Revenue Realities
Original estimates of $1.2 B in revenues
Projected
Actual ( )
Off by…
Scholarships
$40.4 m
$32.6 m
-$7.8 m
Class Size/ More at Four
$201.9 m
$162.7 m
-$39.2 m
Construction
$161.5 m
$130.2 m
-$31.3 m
TOTAL
$403.8 m
$325.5 m
-$78.3 m
But even if projections had been right…
82 years to finance the $9.7 B construction backlog (based on projected funding levels)
49 districts would still have gotten less than $500,000

28. North Carolina Education Lottery
1996 School Bond
2005 Lottery Act
25% high growth
35% ability to pay
40% ADM
65% ADM
A Comparison of the Models shows:
87 LEAS received LESS money under the Lottery Act model

29. Counties’ “Ability to Pay” Qualifies
Them for Approximately $49 M in Extra Lottery Revenue (35% of Available Construction Funds)
57 shaded counties qualify for the extra revenue based upon an ability to pay component
SOURCE: NCGA, Fiscal Research Division

30. School Finance Litigation

31. School Finance Litigation…
Red=Low Wealth Plaintiffs
Blue=Urban Plaintiff-Intervenors

32. Changing Needs of Students & Adequate Resources
Every classroom be staffed with a competent, certified, well-trained teacher…
Every school be led by a well-trained competent Principal…
Every school be provided, in the most cost effective manner, the resources necessary…
-Leandro mandates

33. Who's Accountable?

34. School Finance Case ISN’T Over
State Responsibility: “The State must step in with an iron hand and get the mess straight. If it takes removing an ineffective Superintendent, Principal, teacher, or group of teachers and putting effective, competent ones in their place, so be it…The State of North Carolina cannot shirk or delegate its ultimate responsibility.”
Judge Howard E. Manning, Jr.—4/4/02 memorandum

35. DSSF Resources Then… And now… Started with 16 pilot districts
Funded at $22.5 million
New model approved by plaintiffs, defendants & judge
And now…
Covers all 115 LEAs
Funded at $191.6 million for school
year

36. Kendall Jordan kjordan@ncforum.org 919-781-6833 x 102 www.ncforum.org