Dramatic Change to School Funding Hidden In Budget Deal

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The News and Observer reports on a massive change to the way public schools are funded that was inserted into the budget deal, apparently without the knowledge of key leaders in the General Assembly. The provision makes fully funding enrollment growth optional, instead of using it as a baseline for future budgets. From their article,

Philip Price, chief financial officer for the state Department of Public Instruction, called the provision “the largest change in the budget in my lifetime.” The state has had a law since 1933 that builds student enrollment estimates into the foundation of state education budgets.

Since paying for student growth will no longer be automatic, funds that schools use to help pay for more students will have to compete with other ongoing costs.

“It’s the No. 1 concern in the budget,” Price said. “It opens the possibility they won’t fund total enrollment growth. They’re going to have limited funding and you’re going to be competing with every other priority.”

DPI in March of each year sends local districts planning documents letting them know what they’ll have to spend based on enrollment numbers plugged into formulas. Those numbers come with the caveat that the legislature may make changes, but districts use them as a basis for their own budgets and to start hiring teachers.

The school districts will now be flying without instruments as they prepare their local budgets.

DPI won’t send out planning documents next year, Price said.

Surprise for Wake

The budget change surprised Wake County school leaders, who said it would have a significant impact on them and other growing school systems. Wake, the largest school district in the state with 153,000 students, grows by more than 3,000 students annually.

“There are a lot of HR issues wrapped up in this,” David Neter, Wake’s chief business officer, told the school board on Tuesday. “This is huge.”

In the best-case scenario, administrators said they’ll get state funding for new students months later than normal, hurting their ability to plan for each new school year. This could particularly impact the year-round schools that begin in early July.

What's incredible is that the second highest ranking member of the NC House, Speaker Pro Tem Skip Stam, says he wasn't even aware of the change when he voted for the bill. 

On Wednesday, House Speaker Pro Tem Paul “Skip” Stam said he didn’t know the budget he supported included the change in how future student growth is funded.

“The first I read about that was in today’s paper,” he said. “But we always fund based upon student growth. Obviously the number of students you have will be an important factor in what you appropriate.”

Rep. Marilyn Avila, a Raleigh Republican who helps write the health sections of the budget, said Wednesday she didn’t know about the provision on education funding.



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