Agenda - Item 1B - Public School Forum Local School Finance Study

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For more than 25 years, the Public School Forum of North Carolina has isolated local spending from state and federal spending to examine the capacity and actual effort of counties to support public schools. The annual Local School Finance Study focuses not only on the amount that counties spend on schools, but also on each county’s investment in the context of that county’s taxable resources. From the early years of the Study, two trends have become evident that have deepened over time. First, wealthier counties are able to spend more on schools while simultaneously making less taxing effort. Because wealthier counties have more taxable resources, they can keep taxes low while still generating significant revenues. Conversely, counties with fewer taxable resources need to make greater taxing effort to support their schools. Second, there is a widening gap between counties with many taxable resources and those with few—and as a result, a widening gap in counties’ school spending patterns. State policy decisions made during the last 25 years have blunted the impact of these trends, narrowing the educational investment gap by providing additional funds for the state’s smallest and lowest- wealth counties. However, even with these important, positive policy steps, investments in North Carolina schools still vary dramatically by zip code. As a result, young people born into one of the state’s economically thriving counties will have levels of investment in their education not shared elsewhere in the state. These funding disparities have tangible impacts in classrooms. Local salary supplements for educators are generally larger in high-wealth districts, which better positions them to attract and retain top talent. In low-wealth districts that have fewer resources, class offerings often lack the diversity of those found in wealthier ones. And basic classroom supplies such as paper, pencils and textbooks are difficult to come by in low-wealth districts, while their wealthier counterparts are able to tap deeper wallets as they cope with decreased state-level investments. > INTRODUCTION 1 < FINANCE STUDY20 1 8 LOCALSCHOOL CO N T E N T S 1 INTRODUCTION 3 2015-16 SPENDING PER STUDENT 4 WHAT’S NEW IN THE 2018 STUDY? 5 2018 RANKINGS-AT-A-GLANCE 6 A HISTORICAL PERSPECTIVE 8 WHO PAYS FOR WHAT? 10 GAPS AND TRENDS 2018 12 NOTES ON METHODOLOGY 13 APPENDICES 13 TABLE 1: RANKINGS OF ADJUSTED PROPERTY VALUATIONS PER STUDENT 14 TABLE 2: ACTUAL EFFORT 15 TABLE 2A: SIX-YEAR AVERAGE OF CAPITAL OUTLAY AND DEBT SERVICE 16 TABLE 3: ACTUAL EFFORT WITH SUPPLEMENTAL FUNDING FOR LOW-WEALTH AND SMALL COUNTIES 17 TABLE 4: ABILITY TO PAY 18 TABLE 5: RELATIVE EFFORT 19 GLOSSARY 20 DATA SOURCES & ACKNOWLEDGMENTS