Press Release

School-Funding “Gap” Misstated

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RALEIGH – The Public School Forum’s annual Local School Finance Study provides little useful information for policymakers regarding funding disparities and educational equity in North Carolina, according to two analysts with the John Locke Foundation.

Lindalyn Kakadelis, a former schoolteacher and member of the Charlotte-Mecklenburg Board of Education, directs JLF’s school-reform project, the North Carolina Education Alliance. Terry Stoops, also a former schoolteacher, is education policy analyst at JLF. Both point out that county governments provide only about a quarter of the budgets of North Carolina public schools, so focusing only on differences in county spending drastically exaggerates differences in actual educational resources.

“Reporting differences in county funding alone is like measuring the length of elephant tails while ignoring the rest – it tells us little of practical significance,” said Kakadelis. “No students attend a North Carolina public school funded only by property taxes. They all attend schools where the vast majority of funding comes from state and federal sources.”

What makes the Local School Finance Study even less applicable to reality, Stoops added, is that it ignores pots of funding already set aside to assist communities with significant economic or educational challenges. For example, districts receive millions of dollars in federal grant programs as well as state funding approved by the General Assembly for projects to reduce class size in “high priority” schools.

“Leaving out state and federal funds means rendering the analysis virtually useless,” Stoops said. “What if the state increased funding for high-priority schools by $100 million? The following year’s study would report the same purported disparities.”

Regarding the county-only numbers themselves, Kakadelis and Stoops pointed out that the Public School Forum has not considered differences in real-estate prices across North Carolina that have a bearing on educational costs – differences also reflected in the property-tax base. In this sense, differences in dollar amounts contributed by counties actually reflect an equalization of real resources, not a disparity, because it costs more to build schools and compensate employees in higher-cost jurisdictions.

“Higher per-pupil spending in urban and suburban counties help to offset their higher cost of living,” Kakadelis said. “These school districts could not recruit and retain teachers or build schools if their budgets bore no relationship to real-estate values.”

In a 2004 report, the John Locke Foundation found that funding differences between county systems were too small to be educationally meaningful and were shrinking over time due to overall increases in state and federal spending. With a handful of exceptions – mostly small, mostly lower-income counties where per-pupil spending was higher than average due to low enrollments – spending across North Carolina school districts is within a few percentage points of the statewide average. In real, inflation-adjusted dollars, the JLF report showed, the original plaintiff counties in the Leandro school-funding lawsuit are now better funded than North Carolina’s wealthiest urban districts were when the lawsuit was filed more than a decade ago.

“Unless every school district in North Carolina was unconstitutionally under-funded in 1994, the Leandro funding standard has been met,” Stoops said. “We should be debating how best to spend the significant investment taxpayers have made in their schools, not trying to force them to surrender even more money.”

Kakadelis and Stoops emphasized that they did not doubt the good intentions of the Public School Forum in conducting its Local School Finance Study, but they had grave reservations about the outcome.

“Our policymakers and taxpayers are getting a message about school-funding disparities that is wildly out of sync with reality,” Kakadelis said. “Other states may have vast differences in school spending across districts, but North Carolina is not one of them.”

The North Carolina Education Alliance and the John Locke Foundation have produced reports and informational brochures explaining the school-equity issue in greater detail. The latest are available here and here. Please contact Communications Director Mitch Kokai at 919-828-3876 or [email protected] for more information or to schedule interviews with Kakadelis, based in Charlotte, and Stoops, based in Raleigh.

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About John Locke Foundation

We are North Carolina’s Most Trusted and Influential Source of Common Sense. The John Locke Foundation was created in 1990 as an independent, nonprofit think tank that would work “for truth, for freedom, and for the future of North Carolina.” The Foundation is named for John Locke (1632-1704), an English philosopher whose writings inspired Thomas Jefferson and the other Founders.

The John Locke Foundation is a 501(c)(3) research institute and is funded solely from voluntary contributions from individuals, corporations, and charitable foundations.