Saving North Carolina’s Public Education System

How to Stop Those Who Would Betray the State’s Children and Future

As part of its work on public education in America, Civic Way is taking a closer look at one state—North Carolina. This is the third essay in Civic Way’s series on North Carolina’s primary and secondary education system (see the last essay). The author, Bob Melville, is the founder of Civic Way, a nonprofit dedicated to good government, and a management consultant with over 45 years of experience improving public agencies.

---

Education is not preparation for life; education is life itself. – John Dewey

Governing Public Education in North Carolina

Unlike the US and most states, North Carolina has a constitutional right to education.  According to Article I, Section 15, the state must “guard and maintain” the people’s “right to the privilege of education.” In addition, Article IX, Section 2 requires state and local government to provide a “uniform system of free public schools “and “equal opportunities … for all students.”

Of course, it is easier to make a promise than define it. Over 25 years of litigating the 1997 Leandro case^[i] have provided some clarity. State courts have affirmed the state’s constitutional obligation to fund a sound basic public education … that prepares each child for living in a modern, dynamic society ^[ii].

North Carolina’s governance structure for fulfilling this constitutional obligation is multi-layered. The NCGA and State Board of Education (SBE)^[iii] set educational policy, but the NCGA has taken steps to usurp the SBE’s policy authority, such as the recent creation of the Charter Schools Review Board^[iv].  There is a statutory education cabinet^[v], but its role appears largely advisory.

Several entities administer the state’s educational policies. The independently elected State Superintendent of Public Instruction^[vi]—not the Governor—oversees the Department of Public Instruction (DPI). DPI, the lead educational agency, reviews academic standards, administers federal and state funds and licenses educators. The State Education Assistance Authority (SEAA) administers the OS program. NCGA continues to seek more executive control.

The state courts arbitrate disputes regarding state policies and their constitutionality. The state supreme court, which is elected, is the final appellate level for such disputes. Since the supreme court is partisan, its new GOP majority will likely uphold NCGA policies. Some observers believe that the supreme court, in fealty to the NCGA, could weaken prior vital precedent like the Leandro decision.

Local government is responsible for school operations. In North Carolina, there are 115 public school districts, also known as Local Education Agencies (LEAs)^[vii]. 89 counties have one LEA with coterminous boundaries and 11 have more than one. Each LEA has a school board and superintendent. County Commissions set local property tax rates and approve local education budgets.

Financing Public Education in North Carolina

North Carolina, which spent nearly $14.5 billion on public schools in 2020-21, differs from most other states in two important respects. The first is the dominant role of state government in financing public education in North Carolina. The second is the top-down inflexibility of North Carolina’s funding model. More about these two issues below.

In North Carolina, the largest share of public education costs is funded by state revenues (62 percent^[viii]). In contrast, the national average is about 47 percent state funds^[ix]. In North Carolina, state funds cover most instructional costs and local funds cover most capital costs^[x].

North Carolina’s funding model has 30 distinct allotments^[xi]. Most funds (80 percent) are driven by enrollment^[xii], 16 percent are driven by student-based factors and three percent by district factors. Other states use student-, district- or resource-based funding models or hybrid models incorporating a blend of factors. The North Carolina model makes it difficult to transfer funds across allotments.

Virtually all states, at least to some degree, try to tackle public-school funding fairness, that is, the inherent inequities of the dominant local revenue source—the real property tax^[xiii]. Most states use federal^[xiv] and state funds to supplement low-wealth district revenues. Nearly all states use a foundation formula to help poorer districts meet core needs^[xv]. Few states (if any) have solved the fiscal equity issue.

North Carolina’s Academic Performance and Outcomes

Many public schools are performing quite well^[xvi], and many traditional public schools compare favorably to public charter schools. Still, public school performance is often affected by factors beyond the control of educators, such as poverty, hunger and illness^[xvii]. The pandemic brought added challenges, including school closures, that disrupted learning.

According to North Carolina’s A-F school performance accountability system, public school performance has improved the last two school years. Nearly 54 percent of students passed state exams and more schools earned A, B and C grades. However, racial disparities persist, and overall performance remains below pre-pandemic levels. DPI believes the public schools are performing better than the state rating system suggests. For example, a different weighting formula would likely improve overall grades.

National performance comparisons are mixed. The 2022 National Assessment of Educational Progress (NAEP) results suggest mediocrity (in the aggregate). North Carolina is at or about the US average for 4th grader reading scores (25-T) and below average for 8th grader reading scores (39-T). Slightly above the US average for 4th grader math scores (20-T) and 8th grader math scores (22-T).

Other efforts to measure broader system quality echo NAEP scores. According to the Annie E. Casey Foundation (Kids Count Data Center), North Carolina’s K-12 education system ranked 23rd in in 2023. The Education Week Research Center (Quality Counts) ranked North Carolina 33^rd (tie) with an average C grade across three metrices (educational opportunities, academic achievement and school finance).

The global rankings don’t inspire confidence either. For the most recent Program for International Student Assessment (PISA) scores^[xviii], the US placed 11th of 79 nations in science and 30th in math. US test scores have neither improved nor declined since 2003 in math and since 2006 in science. If North Carolina’s national rank is run-of-the-mill, its global rank is probably no better.

The many threats facing the state’s public education system could worsen the state’s performance ratings in the years ahead. The next essay will commence a discussion of those threats. Subsequent essays in the series will offer some strategies for overcoming those threats.

---

^[i] Hoke County Board of Education, et. al., v. State of North Carolina, et. al.

^[ii] The North Carolina Supreme Court has further ruled that a sound basic education must include competitive reading, writing, English, math and science skills, broad geography, history, economic and political knowledge and sufficient academic and vocational skills for advancement.

^[iii] The State Board of Education, as set forth in Article IX Section 4 of the state constitution, comprises the Lieutenant Governor, Treasurer and 11 members appointed by the Governor (subject to GA confirmation).

^[iv] The Charter School Review Board replaced the Charter School Advisory Board.

^[v] The education cabinet includes the following members—Governor (chair), Superintendent of Public Instruction, State Board of Education chair, UNC System president, NC Community College System president and NC Independent Colleges and Universities president.

^[vi] The State Superintendent’s role is defined in Article IX, Section 4 of the state constitution.

^[vii] In addition to the 115 LEAs, every charter school is self-governing (like an LEA).

^[viii] In North Carolina, local funds account for 27 percent of all public education costs and federal funds 11 percent.

^[ix] For the US average, local funds account for 45 percent of all public education costs and federal funds 8 percent.

^[x] This has been true since the enactment of depression-era legislation like the Machinery Acts and State Budget and Fiscal Control Act.

^[xi] North Carolina’s allotment system is generally based on a resource allocation funding model which strives to fund specific cost components required for a sound public education.

^[xii] More specifically, Average Daily Membership (ADM).

^[xiii] In North Carolina, only counties have levy local property taxes (not school districts).

^[xiv] The largest federal revenue sources are Title I grants under the Elementary and Secondary Education Act (ESEA) and Part B grants under the Individuals with Disabilities Education Act (IDEA).

^[xv] A handful of states use a school finance equalization formula to address inequity issues.

^[xvi] Several North Carolina public schools, such as the North Carolina School of Science and Mathematics and Raleigh Charter School, have received outstanding national rankings.

^[xvii] Low-income students experience significantly poorer educational outcomes than their peers (e.g., graduation rates, college/career-readiness, state exams and ACT exams).

^[xviii] The most recent PISA tests, administered by the Organization for Economic Cooperation and Development (OECD) for 15-year-old students. were conducted in 2018.