A Sober Look at Education Reform in NC

Republicans slashed the education budget, offered teachers no pay raise and passed vouchers to allow kids to take public school dollars to private schools! We’re witnessing the dismantling of public education!

That’s the liberal/left explanation of Republican legislative policies and their impacts on public education in North Carolina. The overheated PR engines of many liberal education advocacy groups have done an effective job of raising doubt about the commitment of conservatives to public education. Regrettably, recent poll numbers reflect those fears. While Republicans succeeded in getting education policies enacted; they were less than successful in explaining their actions. The current liberal narrative dominating much of the debate is based on distortions, lies and selective interpretations of the facts.

This two-part series will answer some of the current claims. Part I will address claims regarding spending cuts and include additional information frequently ignored in the budget debates. Part II will address concerns about student achievement, teacher pay and school vouchers.

Part I:   Budget Reductions: What’s Behind the Numbers?

I frequently hear, “Six years of budget cuts have left the state 46th in teacher salaries and 48th in per-student spending.”  It’s a steady mantra. The claim paints a picture of constant budget-slashing and a lack of concern toward public education that is at odds with the facts. If you look at the latest available figures for state school expenditures for 2006-07 to 2011-12 — the money North Carolina schools actually spent on public schools, not including capital costs – year-to-year spending levels declined only twice during the period. Considering those realities, the outcry by activists and professional education associations against the Republican education budget is surprising. Where was the outcry in 2009-10 and 2010-11? Budgets for both years were written by Democratic legislators and approved by a Democratic Governor.

And what about budget figures for this year? There have been many competing answers to the question: Does the budget for public education increase or decrease in 2013-14? First, it’s important how you decide to answer this question. If you want to make year-to-year comparisons – and we do – analyses must use appropriations figures.  That is the money the General Assembly actually appropriated for public education in a given year. Expenditure figures are not used because end-of-year audits are not yet completed and the figures will not be available for several months.

Table I lists budget appropriations figures for FY 2007-08 to FY 2013-14. If we look at appropriations, the education budget has actually increased every year since 2010-11. The 2013-14 state budget for public schools was $7.8 billion. The budget for 2012-13 was approximately $7.5 billion. The 2013-14 education budget was approximately $300 million higher than the previous year. Expenditures are actually a better gauge of what was spent. However, because that figure is not currently available, appropriations figures can be used. It should be noted that no figure is perfect. Appropriations figures are frequently different from what was actually spent and the legislative budget usually only includes money for current operating costs. It does not include capital costs, which can add on average another 12 to 25 percent in total costs. Imperfections and all, appropriations figures are still useful for measuring year-to-year changes in education funding.

So what is the basis of the claims that Republicans continue to cut the education budget? State budgets are constructed using a continuation budget. A continuation budget is a baseline that allegedly provides what it would cost to provide the “same level of services” and staffing for the next year, after accounting for expected student population changes. As such, the baseline is not the previous year’s budget but the continuation budget — what it would supposedly cost to continue the same level of services into the next year. It’s a cute gimmick that makes assumptions that the average person or company would never make when budgeting. It assumes that current services will be continued over into the next year – no matter the level of resources.

Continuation budgeting ignores hard questions that require a program to justify funding on a year-by-year basis. This practice also explains the counter-intuitive claims of budget “cuts” in spite of increases of actual budgeted spending over the previous year. The 2013-14 K-12 education budget of $7.8 billion includes about $117 million in reductions from the 2013-14 continuation budget. Still, as we said previously, the $7.8 education budget for 2013-14 is $300 million higher than the $7.5 billion appropriated in 2012-13. Most people understand $7.8 billion is more than $7.5 billion. Squabbling over differences in the efficacy of programs and levels of funding are just the sorts of questions that should be argued on a year-by-year basis by representatives in the General Assembly. Aren’t those exactly the sorts of issues our legislators were elected to decide?

Education Budget Reductions: Behind the Numbers

For the past couple of weeks NC Policy Watch has tracked the impact of fewer dollars in the schools in “Tracking the Cuts and the Dismantling of our Public Schools.” When I checked the site, data was reported from 27 LEAs as well as budget and staffing cuts and anecdotal evidence assessing the impacts from each. What isn’t mentioned in any of the information is enrollment. As I said, when I checked the 27 LEAs on the list, 20 had enrollment declines in the past year, ranging from 11 (Brunswick County) to 553 (Cumberland County). In addition, 16 of the 27 LEAs listed had net enrollment declines over the past three years.  What does this mean? Revenue for education is tied primarily to enrollment. When enrollment declines, overall revenue will decline. Overall enrollment changes are consistent with other data that suggest the major growth areas for enrollment are North Carolina’s largest urban areas and selected suburban areas. Rural areas have and will continue to lose population and thus budgets in those areas will continue to be affected – even though state funding formulas enable local schools to partially conceal [JT1] enrollment declines by allowing LEAs to actually claim higher enrollment numbers than actually present. As long as education funding is largely tied to enrollment, enrollment changes are a factor that must be considered when explaining budget changes. To ignore enrollment is to display a significant misunderstanding of school finance.

State Appropriations for K-12 Public Education FY 2007-08 – FY 2013-14
2007-08	$7,714,429,569
2008-09	$7,802,046,538
2009-10	$7,456,261,240
2010-11	$7,085,588,912
2011-12	$7,464,492,057
2012-13	$7,506,553,067
2013-14	$7,867,960,649
Source: Legislative Fiscal Bureau

 

Coming Next: Part II – Addressing concerns about student achievement, teacher pay and school vouchers.