How does school spending work?

Currently, funds for NC schools come from three different sources:  local, state and federal.  Federal funds are provided for certain federal mandates, and since neither the school board nor the state has any real control over them, we won’t discuss them further.

Traditionally in NC, the State has been responsible for funding the day-to-day operations of schools, while the counties fund school construction and maintenance.  Counties have the option of providing additional funds to, for example, supplement teacher salaries or fill in gaps left by the state budget.

In funding schools, the State divides money into 37 different “allotments,” each devoted to a particular type of spending (think of them like buckets).  For example, there is a teacher bucket that pays for classroom teachers, specialists and some resource teachers.  Another bucket funds administrative expenses, another provides extra funding for smaller school districts, and so on.

In the past, school systems (called LEAs in budgeting parlance) have been allowed to move money to and from various buckets, and have had some flexibility in spending within a bucket.  So if an LEA has enough money to pay for teachers but, say, has a need in another “bucket,” it can move money around (with some restrictions) to meet its own particular needs.

So, what’s going on now?

Well, for the last several years, there has been some tension between LEAs and the legislature (“NCGA”) about how much money the State should spend on education and how best to direct those funds to make sure all students reach some academic goals.  The NCGA believes that small class sizes are the best way to make sure all kids meet those goals, and so has decided to require that class sizes in K-3 be reduced by about 20% from the current maximums.

Isn’t that a good thing?

Yes and no.  Many people agree that lowering class sizes is a worthy goal.  But realistically, the NCGA can’t just lower the class size limits and expect that to happen immediately.  Smaller class sizes require more teachers and more classroom space.  And remember, traditionally, the State doesn’t pay for classroom space.  Plus there’s a problem with that teacher funding…


Yeah.  So, remember our buckets?  There is a bucket for teachers that is expected to cover classroom teachers, specialists, resource teachers, etc.  The way that works is that the NGCA determines that it will fund one teacher for a certain number of students and then LEAs and principals decide exactly how to spend those funds. 

Imagine a school with 80 first grade students.  The NCGA funds one teacher for every 16 first graders.  Previously, their principal knew she could fund 5 teaching positions for those children.  She could choose to divide those kids into four classes of 20 students each, and use the “extra” money to fund, say, an art teacher.  By making those decisions at each grade level, a principal could make sure that the school complied with class-size laws and also provide a rounded education to all students.

So, what changed?

This past year, the NCGA passed a law that removes that kind of flexibility from LEAs and principals.  For grades K-3, they said, average class sizes must not be bigger than the funding allotment for that grade.  So, if the NCGA provided our hypothetical principal with enough money to hire 5 teachers for 80 first graders, then it now requires that the principal divide those students into 5 classes of 16 kids each.   They have no other choice.

But then, how do specialists get paid?

That’s the problem.  They don’t.  If the current law stands, funds that had been available to pay specialists must now be used to pay for more classroom teachers.   There is no separate funding provided for those kinds of teachers. 

Yikes!  Someone should really fix that.

We agree, and so do many legislators.  In February, the NC House passed HB-13 unanimously.  That Bill still reduces class size limits, but not as drastically as the current law.  Because it restores the difference between the teacher allocation (1:16 in first grade) and the class sizes allowed (up to 23 in first grade), it will allow schools to maintain most of their Specialists.  It isn’t a perfect fix, but it works. 

Great!  So, problem solved?

No.  Unfortunately, While the House has passed HB-13, it still needs to pass the Senate to become law.  And the Senate doesn’t want to act on it. 

Why Not?

Well, some Senate leaders believe that the State is already providing enough funding for schools, and they suspect that the schools are just misusing those funds.  And they’re really, really unhappy that LEAs have the ability to move money between “buckets” to cover their expenses.  They say they won’t consider HB-13 or any other bill until they’re sure the LEAs aren’t misusing funds. 

If you are wondering where the “Education Lottery” funds are, check out these stories which do a good job of explaining how the lottery funds have turned into a replacement for existing funds, instead of an addition to our school funding.  They’ve also been used for purposes other than education!

What does that have to do with class sizes?

Not much, honestly.  Even if we believe (and we don’t) that every LEA in the state is misusing funds, the new class size law doesn’t fix that problem.  In fact, it makes one issue worse.

Remember the “buckets?”  And remember how the NCGA is mad that LEAs move money between buckets?  Well, when we asked one Senator what LEAs are supposed to do now that their entire Teacher bucket must to be used on classroom teachers, he told us they should use money from other buckets!

But that doesn’t make sense!

No, it doesn’t.  And that’s a really important point.  Even if the NCGA is correct that LEAs are misusing funds, the current class size law does not fix the problem, but it does make it worse!

In short, we agree that education dollars should be used wisely, and we support efforts to make the process easier to understand.  But that is not the issue here.  The current law isn’t about accountability or transparency or anything else.  The current law requires all k-3 teacher funds to be used on classroom teachers and leaves no money available for specialists.  This is what HB-13 fixes, and there is no reason not to pass HB-13.

But the Senate will fix it eventually, right? 

Maybe, maybe not.  Some Senators (of both parties) are very concerned about this issue and believe it can and should be fixed.  Others are concerned but in no hurry to pass HB-13.  Still others have stated that they will not help.  Our hope is that the first group prevails, but that’s not a certainty.

Well, how about the counties, then?  Can’t they help?

Maybe.  Some wealthier counties may be able to provide money to fill the gaps left by the State.  But this is an issue statewide, and a child’s access to art, music and P.E. in school shouldn’t depend on how much money her county can raise.  Teacher funding really should come from the State; it’s the fairest way to do things.

Aren’t we being overdramatic?  Teachers won’t really lose their jobs, will they?

Yes, they will.  Some already have.  At least one school has notified some of its art and music teachers that they will not have jobs for next year.  This is a real problem and it isn’t going to go away unless the Senate acts. 

But these things take time, right?  What’s your hurry?

Well, this is time-sensitive for a few reasons.  First, LEAs need to be making their budgets now and until HB-13 passes, they must act as if the law will not change.  Second, some LEAs have year-round schools that start in July, which is right around the corner.  They can’t afford to wait for the Senate to decide to act.  And third, this issue has been known for over three months now.  The Senate has had plenty of time to consider what it should do; it’s time to act now.