John Locke Update / Research Brief

Cooper’s education budget: following the money tells you a lot

posted on in Education, Education (PreK-12), Spending & Taxes
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  • Cooper recommends 11 and 16 percent spending increases for K-12 public education for the next biennium
  • His recommendations focus on teacher and administrator pay increases, bonuses, hiring more staff and raising pay to $15/hour for noncertified staff
  • The recommendations are excessive and ill-timed and ignore the many shortcomings of the current system

Remember these numbers: 11.1 and 16.3.  Those numbers represent Gov. Roy Cooper’s proposed percentage spending increases for K-12 public instruction for the next two years. Cooper’s recommended budget proposes an additional $1.1 billion in spending in 2022 and $1.6 billion in spending the following year. Much of that spending, Cooper says, will be covered by the $3.6 billion in federal funding North Carolina is expected to receive under the American Rescue Plan Act. That is a lot of money and the increases are bigger than in previous years. For the 2019-21 biennium, Cooper’s recommended budget increases for K-12 spending were 6 and 9 percent, respectively.

As everyone knows, this has been a tough year for public education. Government policies have closed schools, forced most students into online instruction, exposed inequities among communities, and revealed too many children are falling behind.

In a year when a premium is placed on innovative thinking to get our kids back in school and learning, and when the public is calling for expanded educational options, Cooper’s budget initiatives are unimaginative and telling. The governor would throw more money at teachers and administrators, hire more staff, and increase minimum pay and benefits. Highlights include:

  • Increasing pay for teachers and principals by 5 percent per year (average 10 percent over biennium) at a cost of $289 million in the first year and $478 million the second, while also reducing salary plateaus for veteran teachers
  • Providing $2,000 one-time bonuses to public school personnel
  • Spending $80 million to hire more nurses, counselors, and psychologists
  • Increasing pay by 7.5 percent over two years for Central Office and noncertified employees at a cost of $52 million, while also providing $1,000 bonuses in each year of the biennium for public school employees at a cost of $115 million
  • Restoring master’s pay (salary supplements for master’s degrees) at a cost of $7 million each year of the biennium
  • Providing a $15/hour minimum wage for noncertified public-school employees at a cost of $22 million each year of the biennium

Using $3.6 billion of someone else’s money – federal money — to finance pay raises, bonuses, and additional staff during a pandemic and at a time when government policies have slowed the economy is never a good idea. Still, there are other reasons Cooper’s proposals should be questioned.

It is true pay raises and bonuses help with recruitment and retention. Cooper called the raises necessary because teachers did not receive a pay raise last year, which is also true. Teachers did not receive a pay raise last year, but let us not forget Cooper vetoed teacher pay raises four times. Substantive pay increases of 10 percent over two years and educator bonuses potentially totaling $4,000 are excessive, especially when other parts of the economy are still struggling.

Such ideas are propelled by the notion that teacher pay in North Carolina is among the worst in the nation. That notion is simply not true. Since 2016, teacher pay increased by a total of 17.8 percent, an average 3.56 percent a year. Including the increase of 2015, the per-year average pay increase jumps to an eye-catching 4.13 percent. In 2014, North Carolina’s average teacher pay was about $45,000. In 2020, average teacher pay had grown to about $55,000, an increase of about 22 percent. In 2014, North Carolina ranked 47th in average teacher salary. By 2020, North Carolina’s ranking had improved to 30th. If you factor in cost of living, North Carolina jumps to 26th.

Good teachers deserve a pay raise. Cooper’s pay proposal does nothing but perpetrate a system where pay is tied, not to job performance, but to credentials and time on the job. Such a system is unjust, because pay schedules that reward time on the job rather than job performance result in good and not-so-good teachers often making the same salary. Such systems create perverse incentives. In recent years, Republican lawmakers have tried to correct those problems by linking teacher and superintendent bonuses to student outcomes.

Cooper’s budget recommendations are problematics for another reason. They do nothing to address one the major factors impacting educator pay: the rising cost of benefits. Over the past decade, benefits as a percentage of average salary have increased from 25.9 percent to 38.8 percent. How did that happen? Look at the rising cost of health care and retirement benefits. In 2010, the average teacher spent $4,527 on health insurance. Retirement benefits cost the state $4,128 per employee. Ten years later health care has risen to $6,306 per employee and retirement benefits have ballooned to $10,772 per employee. Cooper’s proposals simply ignore these realities as he continues to throw more and more money at a failed system in dire need of reform.

Looming in the background on all discussions of education finance in North Carolina is Leandro v. State (1997). The North Carolina Supreme Court held that North Carolina must provide all students with a sound basic education. Subsequent cases helped to define a sound basic education and the state’s obligations. Last summer, Judge David Lee, the judge presiding over the Leandro case, signed a consent order calling for $427 million in additional spending to help the state meets its constitutional obligations. The consent order largely agreed with the findings and recommendations of WestEd, an independent education consultant, which found the state is not living up to its constitutional mandate to provide a sound basic education. The court was recently handed a plan for remediation marked by costly bureaucratic and noninstructional spending recommendations.

Interestingly, Cooper’s first budget priority in the education section is titled “Commitment to a Sound Basic Education for All Students (Leandro).” It states the governor’s commitment to funding and implementing the remediation plan. While Cooper’s recommendations include various provisions included in the plan (pay raises, hiring additional staff, professional development, etc.), he provided no funding in his recommendations.

Two key questions with economic significance hover over this discussion. Can Judge Lee order lawmakers to incorporate the remediation plan to ensure the state complies with Leandro? The state constitution makes clear that decisions on budgeting and spending are the responsibility of the legislature.

Secondly, is raising student achievement for at-risk students a settled question? The final report issued by the consultant and attached to the consent decree seems to think it is. A review of the research, however, suggests otherwise. The Leandro remediation plan is far from an accepted premise by lawmakers. Its contested status highlights the failure of participants to include major policy actors and alternative viewpoints, which may contribute to its undoing. How lawmakers and the courts proceed will determine the potential budgetary implications of the case.

This has been a tough year for public education. Instead of funding proposals for reform and meeting parents’ increased demand for educational options, Cooper is recommending significant salary increases and bonuses for teachers, and administrators, hiring of additional staff, raising minimum pay, and increasing benefits. These recommendations are tone-deaf to surrounding realities. Let’s call them what they are: a windfall for teachers and teacher unions, one of the Democratic Party’s most loyal constituencies.

We’ve laid out numerous reasons to dismiss the governor’s recommendations. That federal money is being used to finance many of the recommendations does not mask the fact that the recommendations are ill-advised, costly, and would do little to improve pay and benefits for a system in a system badly in need of reform. Dumping truckloads of largely federal money into a system that has not worked well for teachers, taxpayers, or students is not a good plan or a good budget.

For the better part of the last three decades, Dr. Luebke has been involved in improving education and expanding educational opportunity. Prior to joining the Locke Foundation, he wrote about education policy and served as the Director of Policy… ...

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