Agenda - 03-30-1995 - II - Laserfiche WebLink

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%k inter 199 school Lox Bulletin employment centers. received much more revenue per of those reported needs. During the five years from capita than did r�tr,1 ^nunties. When the General As- 1989 to 1993, the additional state aid amounted to e989 sembly authorized the 1983 and 1986 local sales million, or 26 percent of the ten-year needs enumerated taxes. it provided that the proceeds of these taxes be in the 1988 survey. distributed to counties according to their population, While the additional state aid provided during this rather than the amount of taxes collected. period was substantial, its greatest significance in many Distributing revenues from the 1983 and 1986 lo- counties was the role it played in sparking additional cal sales taxes according to population greatly in- local funding for school construction. During the period creased the revenues received by the poorest counties. 1984 to 1993, additional state aid equaled $1.5 billion, For example, several of the lowest-income counties get but total spending on school capital needs equaled two to three times more revenue from the two half-cent $3 billion—double the amount of state aid.(See Table 1.) sales taxes combined than from the one-cent sales tax, Given this marked increase in state and local while Wake County, which has the highest per capita funding, how successful have the state's 100 counties income, receives only 61 percent as much. been in meeting the needs reported by their school In effect, the local sales taxes enacted in 1983 and units? Let us examine how the 100 counties responded 1986 were not local taxes but rather were a form of state to escalating needs for school construction by using revenue sharing. The state was using a traditional state state aid and local funds to build and equip schools. For revenue source—the retail sales tax—to provide funds this purpose we have reliable spending data for coun- to local units expressly to meet the specified statewide ties for the fiscal years 1984 to 1993, so the analysis is objective of meeting school construction needs, and it limited mainly to how well counties have met needs chose to distribute them by formula according to popu- reported in 1984, 1986, and 1988.13 lation,not the point of collection. In addition,earmarked The shorthand term state aid includes the ear- sales tax revenues were chosen in lieu of a state school marked portion of the 1983 and 1986 retail sales taxes bond issue,which had been the traditional means of pro- and funds received from the Public School Building viding state aid. Accordingly, in this article the ear- Capital Fund("capital facilities funds") and school sys- marked portion of local sales taxes is regarded as state tems' receipts from the Critical School Needs Fund aid to counties for school construction. ("critical needs funds").16 It does not include the As a result of these provisions, poorer counties nonearmarked portion of sales tax revenues, funds have received much more state aid per student for con- freed by takeover of vocational education and secre- struction than have larger, high-income counties. From tarial costs, or other instances where the state assumed 1985 to 1993, average state aid per student in the 15 responsibility for expenses in accordance with the Ba- counties with the lowest per capita income was twice sic Education Program. that in the 15 highest-income counties, and in the 21 To fully analyze how well the counties have re- counties with enrollments of less than 3,000 was twice sponded to escalating needs, we will address five that of aid received in the 6 counties with enrollments questions: above 20,000. 1. How does state aid compare with reported State Aid and Local Spending needs? ?. To what extent has actual spending for con- struction met reported needs? Since 1984 state aid has covered a substantial pro- 3. How much have counties spent in relation to portion of reported needs, despite the sharp escalation state aid they received? in those needs. From 1984 to 1993, the new state aid 4. Did counties leverage state aid by borrowing measures—the earmarked portion of sales tax revenue to finance school construction, or did they and funds from the 1987 School Facilities Finance pay off school indebtedness? Act—provided local units a total of $1.489 billion in 5. How well have poorer counties met reported additional funds for school construction (see Table 1, needs? page 6), an amount equal to 82 percent of total needs -- reported in 1981. After reported needs doubled to $3.2 N C Department of State Treasurer.Report on Counn Spendin; billion in 1986, the additional state aid received during for N """i Capital Oudu.v.February 15. 1994.and previous%ear,. It, 1.�.Lnl,from the Critical School Needs Funds_ao directly to the the succeeding six fiscal years amounted to 41 percent school hoard,. not the county government.