Agenda - 12-07-2015 - 4-e - Presentation on County Financing of Public Schools

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,p lAttachmen 2 Basics _'f County Financing of Public Schools NorthCmroknms Unique Financing&Governance Structure for Public Education • NC counties are charged with building, equipping aud000iutoiuiugachooJfacilbica; G.S. 115C-4O8(b) stipulates that public school facilities requirements will bc met bvcounty governments. • NC counties are recognized statutorily as the local taxing authorities for independently elected school boards;in most other states,the school system acts as its own taxing authority. • The State of NC is charged with funding school operations, known as current expense; G.S. 115C-408(b) stipulates that the state, from state revenues,will fund public school operating instructional expense oa defined iu the standard course ofstudy. • NC counties supplement state school operating cxpcuaca. G.S. 115C-426(c) stipulates that local current cxpcuac funding, largely meaning county funding of school operations, is "sufficient" when added to state resources, "within financial resources and consistent with the fiscal policies of the board of county commissioners" • School cxpcuaca--operatiug, capital and debt service—consume nearly 35Y6of total county annual budgets. n*��^°o"""ws,p°"* ° State statutes expressly permit LEAs to sue counties over ''sufficiency" m�".�zo,, ,z �msm/o"'woamw" I of current cxpcuac or capital funding levels, leaving courts to decide other n(Jhnnls "mx sufficiency. School boards are not expressly permitted to sue the state or zrw-___ federal governments for lack of sufficient funding, and no other entity ~�nmm^cs�mm/u iS specifically granted this power tV sue 8 taxing authority over funding ,414000,ty sufficiency. Debt Service Public • Some counties have multiple SChVVldiStdCtSwbhiuCVuuty boundaries, ^~-~ typically referred to as "City districts"; NC city governments have no -Debt servceAll authority and douotfivauccachoolo�cratiouaorc:�bal� couuticafuud H"°** other ' city districts by allocating school operating dollars proportionately based ou per pupil allotment. County Spending County Funding f School C ital Needs • County appropriations for school capital projects are usually projeCt-SPeCifiC- Total Pulbmusc*omn Capital Funding mvsmwrom, • As local taxing authority, counties issue debt for school construction and mma«w y616M 2011-12 renovation projects. The school facility oaact reverts to the school board's S 3% Federal ownership $5w�1M ^ y� • School districts must report school capital needs per a statewide 5-year survey. Based ou the most recent survey, school systems report nearly $8.2 billion in school construction and renovation needs. County • Counties are required to act aside o portion of county-levied sales taxes for nm$543 88% school capital uccda, 45% of one penny tax levy or roughly $350 million in 2013. • Property tax rcvcuuca are also an important source of county funding for School Spending school facilities. Counties are increasingly relying on property taxes as state- shared sources of revenue, such as corporate tax(ADM Fund) and lottery proceeds, dry up.