Trump tariffs will have negative impact on NC public schools

• President Trump’s tariff proposals have created economic chaos at home and abroad. 
• Although personnel costs comprise the largest expenses, North Carolina public schools still spend a lot on supplies, transportation and facilities, items likely to be significantly impacted by the imposition of tariffs.
• Because tariffs will  raise prices for American consumers, drive up costs for public schools and weaken the economy, conservatives should continue to oppose the president’s tariffs. 

President Donald Trump’s tariff proposals have put the country on edge. While many conservatives have rightly applauded the president’s efforts to downsize government, eliminate the Department of Education, and end DEI, tariffs are splitting the president’s supporters. 

The opposition is based on the principle that tariffs are bad for business and American workers and weaken the American economy.

A lot of ink has been spilt on these pages in recent years on how tariffs would adversely impact North Carolina and the economy (see here, here, and here). But how might tariffs impact public education in North Carolina? Less has been written about this topic. Nevertheless, a tariff is essentially a tax, which raises the price of affected goods and has ripple effects on other goods and services. For that reason, it’s safe to say tariffs would negatively impact school budgets in North Carolina.

How tariffs could affect spending on supplies and materials and capital outlay

The major budget item for schools is personnel. Ninety-three percent of all expenditures by school districts in North Carolina were for items related to salaries and benefits. Still, schools need to spend a lot on supplies, transportation, and facilities. Very importantly, each of those expenditures is likely to be significantly impacted by the imposition of tariffs.

The North Carolina Department of Public Instruction (DPI) reports that in 2023–24 North Carolina public schools spent $298.7 million on supplies and materials and another $22.1 million on capital outlay (expenditures).

Here is the  breakdown of the major components of how $298.7 million is spent on on  Supplies and Materials: 

• Textbooks: $20.5 million
• Computer software and supplies: $43.8 million
• Supplies and materials (general): $98 million
• Repair parts, materials and related labor: $32.2 million
• Gas and diesel fuel: $48.3 million
• Furniture: $13.1 million
• Computer equipment: $30.1 million

Manufactured goods of the types mentioned above are prime candidates for tariffs, so many of these goods could be significantly impacted by the imposition of tariffs.

Likewise, capital outlay could incur dramatic cost increases from the application of tariffs. According to DPI, North Carolina local education agencies (LEAs) spent $22.1 million in this area, including $13.9 million on furniture and equipment and $5.3 million on computer hardware. Again, because many of these products come from overseas markets, they would be subject to tariffs. Often the impact of the tariffs would be determined by the flexibility of the supply chain and to what extent consumers are able to find replacements for newly tariffed items.

How might tariffs impact local school districts? That’s a complicated question. The answer is often dependent on timing, how widespread tariffs are (are there exceptions or carveouts?), what percent of given expenditures are imports — or from countries with tariffs, and the availability of substitutes.  These are all important variables that would dictate the scope and impact of the tariffs.  

The table below provides selected LEA expenditures by category and provides a simple  worst-case scenario of the estimated impact of tariffs on them.  The numbers don’t reflect any of the real-life factors mentioned but are provided simply for the sake of argument. The table also includes the estimated impact of 10 percent and 25 percent tariffs for supplies and materials and for capital outlay. Generally speaking, under a worst-case scenario in which all items are subject to new tariffs, the impact of 10 and 25 percent tariffs for supplies and materials would range from $29.9 million to $74.7 million. Likewise, the impact of similar tariffs for capital outlay would range from $2.2 million to $5.5 million. On a per-student basis, the impact of 10 percent tariffs on these expenditures would be the equivalent of adding about $23.50 in expenditures per student.^[i]

2023–24 Selected LEA Expenditures by Category and Estimated Impact of Tariffs (in millions of dollars)

How tariffs could impact spending on purchased services, too

Another area where schools may also be impacted by new tariffs is in purchased services. Purchased services is a significant category with $389.5 million in total expenditures, including $207.8 million in contracted services, $55.0 million in other professional/technical contract services, and $41.4 million in pupil transportation contracts. Though professional services would not be directly subject to tariffs like physical goods, cost increases on other expenditures from the imposition of tariffs would significantly impact how much funding LEAs have available to invest in purchased services. Professional services are frequently altered or reduced during tight budget times, and tariffs would certainly tighten school budgets.

Conclusion

Trump’s tariff policies are the wrong tool to address the complicated issue of trade deficits. They weaken American businesses, raise prices for American consumers and even drive up costs for the public schools. For these reasons conservatives should continue to oppose the president’s tariffs.

^[i] Figure derived by dividing the total tax by an Average Daily Membership (ADM) population of 1,364,278 for 2023-24. ADM statistics provided by the North Carolina Department of Public Instruction.