Agenda - 05-25-2017 - 1.B Public School Forum Local School Finance Study

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ATTACHMENT B Apart from the constitutional provisions,a major change in the As noted in the introduction,over time the delineations proscribed school funding structure occurred during the Great Depression. by the School Machinery Acts and the School Budget and Fiscal Under the School Machinery Act(enacted in 1931 and amended in Control Act have given way to increased local investment in 1933),the state assumed responsibility for all current expenses instructional expenses. Even so,the North Carolina Supreme necessary to maintain a minimum eight-month school term and Court has made clear that it is the state that bears responsibility an educational program of basic content and quality(instruction- for fulfilling the constitutional obligation to guard and maintain al and program expenses). In exchange for the state's expanded the right of every North Carolina child to receive a "sound basic role, local governments assumed responsibility for school education."Leandro v. North Carolina,346 N.C.336(1997). construction and maintenance(capital expenses).The School Machinery Act established counties as the basic unit for operat- ing public schools,which is maintained today with large coun- The North Carolina Supreme Court has made ty-wide school systems, except in the 11 counties that also have clear that it is the state that bears responsibility city school systems. for fulfilling the constitutional obligation to guard In 1975,the General Assembly enacted the School Budget and and maintain the right of every North Carolina Fiscal Control Act, which delineated responsibility for school child to receive a "sound basic education." funding: To ensure a quality education for every child in North Carolina has been engaged in litigation defending its sys- North Carolina, and to assure that the necessary tem of school finance for almost twenty years.The legal action resources are provided, it is the policy of the State was instigated in part by spending inequities between low-wealth of North Carolina to provide from State revenue and higher-wealth counties.These inequities persist today. In sources the instructional expenses for current 2014-15,the state's ten highest-spending counties spent an aver- operations of the public school system as defined age of$46,321 more per classroom than the ten lowest-spending in the standard course of study. It is the policy counties.This large gap exists primarily because of the variation of the State of North Carolina that the facilities in property wealth across the state.The wealthiest counties requirements for a public education system will have$1,890,059 in real estate capacity available per student, be met by county governments. compared with the poorest counties,which have approximately $354,630 in real estate capacity available per student.This gap has widened by over$1 million since the North Carolina Supreme Court's Leandro decision in 1997. ISOURCES OF LOCAL SCHOOL FINANCE LAW: THE LEANDRO CASE "Because the North Carolina Constitution expressly states that units of local governments with financial responsibility for public education may provide additional funding to supplement the educational programs provided by the state,there can be nothing unconstitutional about their doing so or in any inequality of opportunity occurring as a result...Clearly then,a county with greater financial resources will be able to supplement its programs to a greater degree than less wealthy counties, resulting in enhanced educational opportunity for its students." Leandro v. State,488 S.E.2d 249(N.C.1997). 7<