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4 School Law Bulletin Winter 1995 Figure 3 needs and inadequate fiscal resources.'' A Schools' Reported Long-Range Needs Compared large sum was placed in the fund for immedi- with Capital Spending in Succeeding Fiscal Years ate distribution, and twenty-nine school sys- tems received grants in fiscal year 1988 totaling almost $120 million. Additional 1993 Survey awards totaling $45.9 million were made to 5-year spending(1989-93) school systems in eleven counties between 1988 Survey ! 1990 and 1993. 4. The state assumed responsibility for voca- l—8-year spending(1986-93) tional education and secretarial expenses un- 1984 Survey der the Basic Education Program, thereby freeing local funds for other school uses. in- r— (0 yeaz spending(1982-91) cluding construction. 1981 Survey ❑ Spending M Reported Needs At the time, it was estimated that the 1987 act would 0 1 2 3 4 s 6 provide a total of $830 million in additional state aid Current Dollars(Billions) for school construction during the following ten years, Note: All reported needs were for long-range capital needs.The 1988 and and the state assumption of vocational education and 1993 surveys were specified as to-year capital needs. secretarial expenses would provide an additional $740 million potentially available for school construction. These additional revenues, when added to the ear- marked portion of local sales taxes, were estimated to In 1987 the School Facilities Finance Act pro- produce a total of $3.2 billion in revenues potentially vided additional funds for school construction aid." available for school construction during the following The act, financed mainly by an increase in the corpo- decade just enough to cover the total needs of $3.2 rate income tax, provided additional funds for school billion reported in November 1986." construction in four ways: Poorer Counties Favored 1. It required counties to continue to earmark These measures were especially noteworthy be- for school construction or school bond in- cause the General Assembly chose to distribute some debtedness 60 percent of the proceeds from funds in ways that reflected its concern for the needs the local sales tax authorized in 1986, rather of counties with the least ability to pay for school than allowing them to earmark a declining construction. percentage of those proceeds, as the original Whereas previously funds from statewide school law had allowed. construction bonds had been distributed on the basis of 2. It established the Public School Building enrollment, thus giving wealthy counties the same Capital Fund, which was to distribute state amount per student as the poor counties, the General school construction funds to all counties ac- Assembly chose to set apart some money to meet criti- cording to their school enrollment.'' These cal needs in the poorer counties. funds must be matched by $1.00 of local The General Assembly also deliberately changed funds for each $3.00 of state funds, although the distribution of sales tax revenues in a way that fa- earmarked local sales tax revenues can be vored poorer counties. The proceeds from the original used as local matching funds. one-cent local retail sales tax, enacted in 1971. were 3. It established the Critical School Facility distributed back to the counties where the sales taxes Needs Fund, which was to award funds for �� re collected. The wealthy, urban counties, partic- specific school construction projects to ulark those that served as regional shopping and school systems in counties that had critical G S 115C.Art. 34A. 1 Laurie Mesibov• "Public Education." in Cowin-Got ernment of 11. 1987 N.C. Sess. Laws ch. 622 and 813: G.S. 115C. Art. 38A. % • „ .lrrkr. 3rd ed..ed. A. Fleming Bell. 11(Chapel Hill. N.0: lmti- and G.S. 115C. Art. 34A. tote ,�t (w%ernment. The University of North Carolina at Chapel Hill, 12.G.S, 115C.Art. 38A. 19,9 lh-,.