Putting moneyed interests over people

Legislative leaders are knowingly violating the constitutional rights of North Carolina’s 1.5 million public school students in order to help fund tax cuts for the corporations and wealthy North Carolinians who finance their campaigns.

North Carolina’s constitution requires the state to provide all students with access to decent schools that provide all students with meaningful opportunities to thrive. In 1994, the state was sued for failing to meet this constitutional obligation to students. This litigation, known as the Leandro case, has lingered in the North Carolina courts for nearly 30 years. 

In every Leandro ruling, the courts have agreed that state lawmakers are failing to meet their constitutional obligations to adequately and equitably fund our public schools. In the most recent ruling in November of 2022, the State Supreme Court ordered lawmakers to fully fund a detailed, research-based plan (the Leandro Comprehensive Remedial Plan) to achieve constitutional levels of funding by 2028.

While past iterations of the General Assembly have responded to such rulings by increasing funding for public schools, this General Assembly has ignored the courts. They have adopted the radical (and dangerous) stance that they can simply ignore the parts of the state constitution that they don’t agree with.

As a result, North Carolina’s public schools are arguably the worst-funded schools in the nation.

• For the 19-20 school year, North Carolina’s per-pupil spending ($11,052) ranks 42nd, falling 31% short of the national average ($14,512).
• When adjusted for appropriate school cost factors, North Carolina’s per-pupil funding rank for the 19-20 school year falls to 48th, 43% below the national average per-pupil funding level.
• Our school funding effort is dead last in the nation. The average state dedicates 3.6% of its GDP to public schools. In North Carolina, public school spending accounts for just 2.3% of GDP.
• 92.3% of North Carolina students attend districts spending less than the estimated amount necessary to achieve national average test scores. North Carolina has the most students in inadequately funded districts.

The Leandro Plan, which was based on an intensive two-year study from the nation’s top nonpartisan researchers, concluded that state funding needs to increase 45 percent just to meet constitutional standards of providing all students access to a “sound basic education.” Fully funding the Plan will require state funding for public schools and early learning opportunities to increase by approximately $6.5 billion in 2028.

Students continue to pay the price for this lack of investment. After smart investments spurred dramatic improvements in the late 90s and early 00s, test scores have now fallen back to the national average. Lack of equitable investment has created large, persistent opportunity gaps across income and race.

Teacher vacancies have more than tripled in recent years. Lack of investment and a series of policies negatively targeting teachers have left nearly one in every 18 classrooms without an appropriately licensed teacher. These vacancies are a key contributor to the racial and economic opportunity gaps, as Black students and students from families with low incomes are more likely to be impacted by vacancies.

The budget approved last week shows that legislative leaders remain wholly uninterested in fulfilling their constitutional obligation to provide all students with decent schools. 

Year-over-year, this budget cuts overall public school funding by 0.6 percent. Adjusted for inflation, this budget would leave per-pupil state funding 3 percent below pre-Recession levels.

This lack of investment means that legislators are ignoring their constitutional obligation to fully fund the Leandro Plan. The budget funds just 7 percent of the Leandro Plan in year one, dropping to less than 4 percent in the second year of the biennium. It is a budget that shows utter contempt of our students and last November’s Supreme Court ruling.

But why neglect our public schools to such an extent? The answer to that question is found in the section of the budget related to taxes. There, this General Assembly’s preferences are revealed: students are being denied constitutionally funded schools because the General Assembly prefers handing out tax cuts to corporations and wealthy North Carolinians.

Over the coming years, this budget reduces the personal income tax rate from the current rate of 4.75 percent to 2.49 percent after 2029. This budget further reduces business taxes by phasing down the franchise tax. Both changes primarily benefit the same wealthy North Carolinians who fund the campaigns of current General Assembly leadership.

According to the Office of State Budget and Management, these new changes will drain $7.2 billion from state coffers by 2031. This number closely approximates the $7.0 billion needed to fully fund the Leandro Plan in 2031.

Of course, tax cuts aren’t this budget’s only giveaway to the donor class in this budget. The budget also includes tripling of funding for the Opportunity Scholarship voucher program. The program had previously been limited to families with incomes less than 3.7 times the federal poverty level ($111,000 for a family of four). This budget eliminates any income eligibility requirements. As a result, millionaires who have already enrolled their children in private schools will now be eligible for $3,246 worth of public subsidy in the form of vouchers.

An additional provision will enrich operators of charter schools. Charter operators will now be allowed to convert their schools to low-cost (and low quality) “virtual academies.” Virtual charters face much lower costs than brick-and-mortar schools. Yet legislators have modified the formulas to ensure that virtual charters will now receive the same funding as brick-and-mortar schools. That extra funding will benefit wealthy charter operators, not their students.

Additionally, virtual charter schools open new avenues for fraud. In California, Indiana, Ohio, Oklahoma, and Pennsylvania, wealthy virtual charter school operators have fraudulently inflated enrollment figures to steal hundreds of millions of taxpayer dollars.

By any rational assessment, these budget changes are a massive betrayal. Legislators are violating the constitutional rights of 1.5 million public school students to enrich their political donors. Tax cuts, vouchers, and virtual charter school funding formulas have simply replaced handoffs of cash-filled envelopes in bathroom stalls. That it’s happening in plain sight – for all to see in budget documents – doesn’t lessen the harmful impact on our students and our state.