WHAT YOU SHOULD KNOW ABOUT SCHOOL FINANCE

Public Education in North Carolina is funded through state, federal and local money. For the most part, state revenues come from taxes—personal income taxes, corporate taxes, sales taxes etc. For the most part local revenues come from property taxes—taxes on land and real estate. Federal revenues come from federally imposed taxes. The state contributes approximately 68% of the money spent for K-12 education; this percentage does not include state money for capital or building expenses. Local governments contribute approximately 24% of funding and the federal government approximately 8%.

Local property taxes play a significant role in paying for education in our state. This means that some counties are better able to pay for education for their children than others. Counties with high real estate values and wide spread development raise more in property taxes than counties that don’t have a lot of real estate development or high real estate values

There are two supplemental funds meant to assist poor counties—the small county fund and the low wealth fund. The small county fund is for counties with less than 3150 students or between 3150 and 4000, whose property tax base dollar amount per student is less than the state average. The low wealth fund is for counties where the ability to generate revenue per student is below the state average. Additional factors are also looked at to determine if a county is low wealth such as property tax base, the number of square miles in a county and per capita income. The low wealth fund has never been fully funded; it is estimated that to do so would require an additional $44 million.

 

Why You Should Care

For fiscal year 2004-2005, the total State General Fund appropriation was $14.9 billion. Of that amount, $9.2 billion or 58% was allocated for education. The education money was divided among community colleges, universities and public schools.

Community Colleges--$0.75 billion

Universities--$1.8 Billion

Public Schools--$5.8 billion

In spite of the money spent on education, many students in North Carolina do not receive a quality education. Across North Carolina there are schools where there are insufficient books, computers, microscopes and other learning tools and materials for all students to have access to them. For many rural schools systems these deficiencies are severe. Teachers in elementary schools buy crayons and paper out of their own pockets to provide enough for each student. High schools tailor their course offerings based on available funding; if your child attends school in a poor county, she may not have access to the same higher-level courses as a student in a wealthy county.

A quality education is not a luxury to be enjoyed only by those lucky enough to live in a wealthy county. Receiving a sound education can make the difference in the quality of a child’s future. On average, high school dropouts earn $6300 per year less than a high school graduate. The gap in earnings is more dramatic, the higher the level of educational achievement. A graduate of a four year college with a bachelor’s degree earns an average of $20,400 more than a high school dropout and a professional degree holder $53,000.

Our State Supreme Court declared in 1994 that all children are entitled to an equal opportunity to a sound basic education. To obtain that goal for every child, we believe that we need to come up with a better system for distributing the existing funds and urge our legislators to increase the money we spend on education.