FY 2009-10 Education Budget Recap

Education Spending Down Only 1 Percent  From Last Year’s Actual Spending, Opportunities Missed for Much-Needed Spending Reform

FY 2009-10 Budgeted Spending: $11.7 Billion

FY 2008-09 Estimated Actual Expenditures: $11.8 Billion

Despite high volume rhetoric about massive budget cuts, the FY2009-10 North Carolina state budget for public education (K-12, UNC and community colleges) reduces total spending for all public education by only about 1 percent over last year’s actual expenditure levels.

State spending for all public education is reduced from $11.8 to $11.1 billion. However the addition of $517 million in federal stimulus funds for K-12 and higher education offsets state budget reductions and actually increases total spending to approximately $11.7 billion.

While the economic downturn produced a variety of budgeting challenges, it also afforded the opportunity to reexamine spending priorities. Rather than focus on ways to improve efficiency, eliminate waste, and boost student learning, instead lawmakers opted to save jobs and minimize cuts to current programs. Following is a list of budget highlights and selected.

K-12 Public Education

• FY 2009-10 State spending is reduced from $8.1 billion (FY 2008-09 actual expenditures) to $7.5 billion.   
  • Combining state and stimulus money, however, boosts total spending to about $7.8 billion, approximately a 4 percent reduction from FY2008-09 actual expenditures.  
  •  $380 million in stabilization funds will be distributed to LEAs to offset dollar-for-dollar reductions in non-instructional support personnel allotments.
• New budget also includes $225 million reduction for LEAs. The reductions will be distributed on the basis of ADM. LEAs will be given flexibility to manage reduction. Class-size increases, teacher layoffs or program reductions are likely.   

Missed Opportunities:   

Do we need to layoff teachers?  Since, 2000 ADM (average daily membership) enrollment increased 15 percent, the number of instructional support personnel increased by 37 percent and the number of administrator positions increased by 21 percent. Since 2000, North Carolina has hired nearly 10,000 state-funded non-teaching positions.

Charter School Cap:  On average the per student cost of educating a child in a charter school is about half what it is in a traditional public school. Five thousand children are on charter school waiting lists.  Despite these realities, the legislature still failed to lift the cap on charter schools.

Teacher Pay Scale: Once again lawmakers failed to update the teacher pay plan to tie compensation to job performance — not seniority.  The current pay schedule limits district’s ability to reward excellence and respond to market changes.

UNIVERSITY OF NORTH CAROLINA

UNC budgeted state appropriations for FY2009-10 is $2.7 billion, up slightly over FY2008-09 actual expenditures.

• Stimulus Funds: Federal stimulus revenue ($138 million) will offset reductions in general fund appropriations. Stimulus revenue boosts actual UNC spending to $2.84 billion, an increase of 6 percent over FY2008-09 actual expenditures.   

• Enrollment Growth: Budget plan includes additional $44 million in spending to account for anticipated UNC enrollment growth FY2008-09 and FY2010-11.

• UNC Tuition: Increases UNC tuition at all campuses by the lesser of $200 or 8 percent in FY2010-11.

• Student Financial Aid: Adds $23 million to UNC Need-Based Student Financial Aid program to account for increased need.

Missed Opportunities: 

Review and Consolidate Academic Programs: UNC has 2,262 approved academic programs. A close examination reveals lots of overlap and numerous programs with relatively low numbers of graduates. Does North Carolina really need 45 different programs in parks, recreation, leisure and fitness studies?

UNC has close to 300 Research Institutes and Centers. Instead of thoroughly reviewing state appropriation levels for nearly 300 UNC centers and research institutes, the General Assembly cut funding by $12 million and required each UNC campus to reduce budgets for centers and research institutes by a specific amount. The fact is, many research institutes and centers have simply outgrown the purpose for which they were created and only siphon off state appropriations for staff and facility costs.¹

UNC Community Colleges

The FY 2009-10 budget for NC Community Colleges comes to $1 billion. The new budget is 5 percent over FY2008-09 actual expenditures ($957 million).

Enrollment Growth: Budget provides an additional $58 million to fund for enrollment growth.

Tuition: Tuition per credit increased from $42 to $50 for part-time students and from $1,344 to $1,600 per year for full-time students, an increase of 19 percent.

Source: Office of State Budget Management
Figures include state appropriations for public schools, UNC system and community colleges.
Note: Figures for 2009-10 include $517 million in federal stimulus spending which offset state spending reductions