- Even without a budget, public schools across North Carolina will welcome students to a new year.
- In his veto statement Gov. Cooper calls on Republicans to spend more for public education, teachers and healthcare.
- Education budgets developed by the governor and approved by the legislature have more in common than what most suspect.
- Differences remain regarding teacher salaries. However, the increase in pork and the steady increase in the cost of benefits should be of greater concern.
In Education Budget Part I , we described how despite not having a state budget, North Carolina public schools are opening as scheduled, schools are staffed, and students are filling their classrooms.
It’s now two months since the governor vetoed the budget. During that time, Cooper has reiterated his commitment to Medicaid expansion and offered a compromise budget. Provisions that provide state agencies with last year’s funding levels are in place and Republicans are moving a series of “mini-budget” bills to provide pay raises to state employees and teachers.
Governor Roy Cooper vetoed the state budget on June 28th saying, “we should be investing in public schools, teacher pay and health care instead of more tax breaks for corporations.”
His statement however, also makes it sound as if there are sizeable differences in the budgets recommended by the governor and what was recommended by lawmakers. For a quick comparison of the governor’s and legislative budgets see below. (For a more detailed comparison see here; click top link on page).
Four insights emerge from a quick comparison of the K-12 education budgets in North Carolina.
Education budget totals for the governor and legislature are not that far apart.
| Selected FY 2019-2020 K-12 Budget Recommendations
(Columns represent selected categories and do not equal budget totals) |
||||
| Governor | House | Senate | Conference Committee
(Budget) |
|
| State Public School Fund (Continuation) | $22,000,000 | $65,117,931 | $65,614,670 | $65,117,931 |
| State Public School Fund (Adjustments) | $132,335,000 | $123,194,202 | $142,944,670 | $128,947,931 |
| Department of Public Instruction Adjustments | $12,504,207 | $5,949,000 | ($4,910,906) | ($2,375,000) |
| Ed. Support Organizations Adjustments | $0 | $3,336,000 | $2,838,800 | $9,731,800 |
| Total Expansion/Reductions | $144,839,207 | $132,503,202 | $140,872,564 | $136,304,731 |
| Total Requirements | $11,911,779,009 | $11,899,443,004 | $11,907,812,986 | $11,903,244,533 |
| Total Expansion and Salary & Benefits Requirements | $12,334,719,942 | $12,150,579,345 | $12,126,943,583 | $12,115,985,122 |
| Ending Appropriated Budget | $10,154,153,510 | $9,954,112,913 | $9,883,377,151 | $9,857,518,690 |
| Retirement Rate | 20.43% | 19.66% | 19.76% | 19.86% |
| Health Benefit | $6,349 | $6,262 | $6,349 | $6,306 |
Source: Figures from Division of School Business, North Carolina Department of Public Instruction. Budget comparison spreadsheet available at: http://www.ncpublicschools.org/fbs/
Anyone who has lived in North Carolina for the past decade and observed the public debate over education is familiar with the allegations by Democrats and progressives that Republicans are starving the public schools. If the charges are true, they would be visible in the trendlines. In his veto message, Gov. Cooper stressed higher spending for public schools and teacher salaries. Cooper’s requested appropriation for K-12 public education is $10.154 billion. The K-12 education budget approved by both the House and Senate is $9.857 billion. The difference between the two budgets for FY 2019-20 is about $297 million or 3 percent. If either Cooper’s budget or the conference committee education budget is adopted, it will mark the ninth consecutive budget increase for K-12 public education. Yes, there are differences in policies and priorities. but when you consider the overall budget numbers it is difficult to make the case that one is dramatically different than the other, and that one budget underfunds public education. The never-ending rhetoric of the Left that Republicans are slashing educational spending and starving public education is simply not substantiated by the budget numbers. While we don’t want to gloss over the differences, what should really come to mind from any analysis is how similar the overall budgets are.
Source: North Carolina Department of Public Instruction.
Teacher Salaries and bonuses: Yes, there are differences
Two areas where there are significant differences between the governor and legislature on funding are teacher salaries and bonuses. The governor recommended boosting teacher salaries 9.1 percent over two years. He included nearly $258 million in new raises and bonuses for teacher and administrators in 2019-20 The governor’s plan includes money for teacher raises, master’s pay for teachers, money for principal recruitment as well as money for raises for non-certified and central office staff.
The House and Senate had far less ambitious salary increases. The legislature allotted approximately $74.7 million for teacher, staff and administrator salary increases and bonuses. Regarding raises, legislators provide for step increases for all teachers plus a bonus. Raises would range between $500 and $3,100 or between 1 percent and 6.2 percent. The pay plan also proposes a $500 bonus for teachers with 25 years or more experience. School counselors are provided with a state supplement of $80 per month. It should be noted that legislators did not reinstate monthly pay differentials previously awarded for master’s pay (10 percent differential), advanced ($126) or doctorate pay ($253). As stated earlier, House and Senate Republicans are expected to develop a mini-bill to increase teacher pay. It is not immediately known how the totals will differ from the original budget legislation or whether Governor Cooper will veto the legislation. No matter whose plan is ultimately adopted, it will mark the sixth consecutive year that teachers have received a pay increase.
The other major difference between the two proposals is funding allocated for the Department of Public Instruction (DPI). Gov. Cooper allotted an additional $12.5 million in funding while the conference committee report called for a reduction of $2.3 million in spending. Obviously, the numbers mirror longstanding philosophical differences regarding the role and effectiveness of DPI as an agency. Simply stated Cooper and fellow Democrats embrace the agency to run the public schools while many Republicans are openly skeptical of education bureaucracy and its ability to improve student achievement. Differences in recommended funding levels derive in large part from those differences.
Benefits: The topic no one wants to talk about
According to data from the Department of Public Instruction, in 2009, the average teacher salary was $48,454. The state paid $2.038 billion for teacher and educator benefits (e.g., retirement, health insurance and social security). The dollar value of individual benefits in 2009 was $11,807 and benefits comprised 19.5 percent of total compensation.
Ten years later, things have changed dramatically. In 2019, average teacher pay is now $53,975. The state paid $2.94 billion for teacher and educator benefits (2017-18 figures, the latest year available). The value of individual benefits increased to $20,412 and now comprise 27.4 percent of total compensation. That’s a lot of numbers, but the important point to remember is that the cost of employee benefits for teachers and other educators keeps increasing.
Earlier this year, Cooper recommended raising the percentage of total employee salary allocated for retirement from 18.86 percent to 20.43 percent, an increase of 8.3 percent. The governor also recommended raising the cost the state pays for employee health insurance premiums from $6,101 per month to $6,349, an increase of 4 percent. The other benefit, Social Security, will remain the same at 7.65 percent of employee salary, a rate that has been the same for years. Cooper’s budget recommends spending an additional $422.9 million for salary and bonuses ($264.8 million) and benefits ($158.1 million).
Lawmakers recommend spending significantly less on salaries and bonuses than the governor. The conference committee report recommends an additional $212.7 million in spending. That includes $90.1 million in additional spending for salary increases and bonuses and $122.6 million in additional spending to meet revised healthcare and retirement benefits. Retirement benefits are pegged to 19.86 percent of salary. Under the conference committee report, the state will also pay a slightly lower monthly health insurance premium than what the governor wanted, at $6,306 per month. Once again Social Security remains the same at 7.65 percent of total income.
No matter what plan is adopted the cost of employee benefits will continue to rise. A review of the past decade-and-a-half reveals neither Republican or Democrats can do much about keeping costs down, which might explain why it is a topic that is seldom talked about.
North Carolinians like their pork
The budget spreadsheet comparison (top link on page) referenced above cites a category called Education Support Organizations. People familiar with the budget frequently call state money allocated to these organizations “pass throughs.” They represent dollars provided to nonprofit or other organizations to perform a function or service. While many of the organizations listed here perform worthy services, Civitas believes private organizations should not receive public funding — no matter how noble the cause.
It is not the job of government to assist nonprofits. The fortunes of such organizations should rise, and fall based on their own merit and not on the aid or assistance of the government. If the cause is important, and the organization supporting the cause is effective, individuals will support it. Unfortunately, state government is doing a poor job of following this philosophy.
While the governor’s budget recommended no funding for educational support organizations, the House budget provides $3.6 million in funding, the Senate budget comes in at slightly less at $2.8 million. However, what’s noticeable is that the final legislative budget approved by both the House and the Senate contains $9.7 million in educational support organization funding – or pork. The funding ranges from $3.1 million for a new SEA Tech High School in New Hanover County to $10,000 for the Robeson County Career Center.
Conservatives rightfully railed against such abuses a decade ago when Democrats controlled the legislature. Then Democrats used “pass throughs” to direct money to any number of projects directed by politically friendly organizations. In recent years, Republicans have slowly begun to fall into the same pattern. In 2018, Republicans approved about $13.2 million in pass-through grants for education support organizations. In 2017, that number was about $9 million. While the money can be used for designated purpose, veteran politicos know the money is the main instrument used to help win budget votes. My guess is that is exactly why the number of educational pass-throughs is so high. Republicans no longer enjoy super-majorities in both houses. In order to overturn a veto from the governor they need the help of Democrats. Distributing pork to lawmakers is usually one of the best ways to change minds. How much pork is involved? Leah Byers of Civitas found $125 million dollars’ worth of pork projects in the legislative budget – including pork in parts of the education budget. If you’re interested in reviewing individual projects see here.
Some say distributing pork projects is a reality of politics. Still, taxpayers should be incensed at the money spent and how it is distributed. What’s even more appalling is to hear lawmakers dole out political goodies and then tell voters how they are trying to protect taxpayer dollars. It’s just as wrong for Republicans to add pork to the budget as it is for Democrats. Only when North Carolinians know the many ways their hard-earned tax dollars are wasted, will taxpayers rise and seek to end this practice. Unfortunately until then, pork-peddling will continue to serve the interests of lawmakers.
Over the next couple of weeks public schools throughout North Carolina will be opening their doors for another school year. While lawmakers and the governor have yet to agree on a budget bill, lawmakers have taken steps to allow schools to operate. While the media has focused much of the attention on the question of Medicaid expansion, and the governor’s veto, a review of the K-12 education budgets proposed by the governor and the legislature shows great similarity in the overall budget levels. Still, differences do exist; Cooper’s salary proposals for teachers and educators and funding for the Department of Public Instruction are much more generous than lawmakers’ proposals and reflective of basic philosophical differences. The rising cost of benefits and the prevalence of “pork” in the education budget failed to gather the attention from the media that both subjects warrant.
Kudos to legislators who wrote a provision in the 2016 budget bill with the foresight to create provisions that allow state government to continue functioning while still awaiting a final budget. It helped to avert what certainly would have been a more disruptive development. That said, lawmakers in North Carolina still have a budget impasse to resolve.
It’s a process that needs improvement and a good dose of perspective. It’s something we all can benefit from regardless of whether you are a Republican or Democrat.
