K-12 Education Budget: What They Don’t Tell You

There has been much talk from lawmakers about the need to spare North Carolina public schools from large budget cuts and protect teachers’ jobs. The General Assembly’s budget provides $7.5 billion for K-12 education, about 93 percent of fiscal 2008-09 actual K-12 expenditures. While much disdain is generally expressed when there is a reduction in state funding levels, what frequently is left out of the discussion are the millions of federal dollars North Carolina public schools will receive as part of the American Recovery and Reinvestment Act of 2009, commonly known as the federal stimulus plan. An additional $380 million in federal stabilization funds will increase actual general fund spending for public education to $7.8 billion. The new budget totals mean proposed spending is only four percent less than actual spending levels for fiscal 2008-09.

$1 billion in Federal Aid.  The Department of Public Instruction (DPI) estimates North Carolina public schools will receive over $1 billion in federal stimulus funds in fiscal 2009-10, that’s approximately a 40 percent increase in federal revenue over and above the previous year.
Types of Assistance. Under the federal stimulus plan, the states and schools will receive two types of revenue. First, North Carolina will receive money from the Education Stabilization Fund (ESF). ESF provides states and local education agencies (LEAs) with broad discretion over how to spend the money. Much of these funds are designed to help maintain existing funding levels and to save jobs in education. Second, in addition to ESF monies, schools will also receive millions in federal funds targeted for specific programs.¹
GENERAL BUDGET ASSISTANCE

• Education Stabilization Fund: $380 million. Federal monies will be used to replace state reductions in noninstructional support personnel. In other words, $380 million itemized in the state budget as a “cut” will still be spent – the source will just change. The funds will be distributed via the state’s regular funding formula where LEAs will have considerable flexibility in how money is used.

ASSISTANCE DESIGNATED FOR SPECIFIC PROGRAMS

• Impacts. In addition to helping to offset  reductions in state appropriations, federal stimulus revenue is also directed at bolstering spending in specific categorical programs    Since Federal stimulus money is over and above normal federal support levels, federal stimulus will dramatically increases spending levels over last year (Title I: At-Risk students 44 percent; Special Education: 58 percent ).

• At-Risk and High Poverty Students: $247 million. Improve teaching and learning of high risk populations and to reduce the achievement gap.

• School Improvement Grants: $87 million. Further school improvement efforts and cover administration, evaluation and technical assistance costs.
• Pre-School Education for Special Education Students: $326 million. Provides pre-school services for special need populations.
• Education Technology: $16 million. Funds formula and competitive grants to integrate technology into the classroom and improve student learning.
• Student Homelessness: $1.6 million. Provides resources to help meet “educational and related needs” of homeless students.
• Child Nutrition Equipment: $3 million. Supports the upgrading of equipment used in the daily production of meals for child nutrition programs.

 

SCHOOL CONSTRUCTION ASSISTANCE

• Special Bonds for School Construction: $198 million. Provides communities access to lower cost financing for school construction through the Qualified Zone Academy Bonds and Qualified School Construction Bonds programs.

The recent economic downturn has made it necessary for many state agencies to reduce spending, including public education. However, $1 billion in new federal revenue for education has not only helped to protect service levels and jobs, the new funding has also increased overall spending levels – when compared to last year – in certain areas like special education and at-risk programs. Furthermore, the additional funding has allowed North Carolina budget writers to delay difficult education budget decisions for now.
While the new revenue has helped to soften cuts to public education this year, next year lawmakers won’t have the same luxury of pushing off tough decisions about education spending until the following year. Several questions can help guide those decisions:  Are our educational programs producing the desired outcomes?  Is there duplication within the system? Are resources kept in the classroom or diverted for non-classroom services? Are programs administered efficiently and effectively?  These questions will not only help to guide lawmakers, they will also help us to move past the knee jerk refrain, and “don’t cut education spending” we too often hear out of the governor and legislative leaders.