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To fix NC school funding, change politicians, not models

As a school finance and policy consultant, few things make me happier than seeing the increased focus on how North Carolina funds its public school system. As noted in Professor Eric Houck’s recent op-ed “N.C. public school funding needs to change,” two influential bodies of policymakers – the General Assembly’s Joint Legislative Task Force on Education Finance Reform and the Governor’s Commission on Access to a Sound Basic Education – are examining how North Carolina could improve its school funding system.

Professor Houck and I agree that these efforts represent a rare and important opportunity to address the shortcomings of North Carolina’s school finance system. I disagree, however, with Houck’s focus on school funding models when all the evidence points to political will as the most important factor in creating a system that functions best for all students.

I have dedicated the bulk of my professional career to studying how states fund their public school systems. Through this work, one consistent lesson has emerged: policy decisions matter more than school funding models.

While the details and variations in school funding models can get quite complex and tedious, the basic tenants of school finance are fairly simple.

First, the overall level of funding needs to be adequate. That is, there must be enough money to allow every school district to successfully educate each student to state standards for college or career readiness.

Second, funding must be equitable, distributed on the basis of student and district need. Districts with more high-need students and difficulty attracting and retaining teachers need more funding than districts with more advantages.

North Carolina’s school funding system needs to be improved in terms of both adequacy and equity. Despite increasing graduation rates, far too many North Carolina students finish school inadequately prepared for college or careers. Just 18 percent of 2017 high school graduates met all four college readiness benchmarks on the ACT test, with 47 percent of graduates meeting none of the readiness indicators. Research indicates that increased spending levels could boost these results, particularly for low-income students.

At the same time, student success is inequitably distributed across North Carolina. School performance grade data show that students in high-poverty schools and districts are far less likely to pass state tests than students from wealthier schools. Clearly, we should be doing more to help poorer districts meet their students’ needs.

However, whether the state preserves its existing position-based funding model or follows Professor Houck’s suggestion to create a pupil weighting system is mostly irrelevant to creating a system that is both adequate and equitable.

Successful school funding systems only emerge when policymakers dedicate themselves to fully funding public schools and sending the majority of that funding to districts facing the greatest needs.

Lawmakers must be willing to prioritize school funding over tax cuts for wealthy individuals and corporations. In most cases, they must also be willing to place the educational needs of students facing greater odds over the concerns of better-off students in their own district.

Unfortunately, the current General Assembly leadership has shown little interest in addressing North Carolina’s school funding needs. When adjusted for inflation, per-student funding remains 7 percent below pre-Recession levels, and students’ opportunities for success remain too closely tied to their ZIP code. Meanwhile, the chairmen of the Joint Legislative Task Force on Education Finance Reform have explicitly vowed to ignore questions of school funding adequacy.

Rather than debating models, policymakers and public school advocates would be better served by taking the following steps.

First, policymakers should develop consensus on clearly-defined goals for determining whether North Carolina’s school funding system is adequate and equitable. School finance experts have developed many methodologies for estimating adequacy and assessing equity. But without common goals, school finance reform is likely to go off the rails.

Second, our leaders also need to assess our current system against those measures to identify which specific problems require solving. Many General Assembly members don’t like the current system because they find it confusing. But few, if any, can articulate how or whether the system falls short in terms of adequacy or equity.

Finally, lawmakers must assess funding alternatives to see which options best meet the state’s goals for adequacy and equity. Perhaps a pupil weighting system will be better suited to meet funding goals. But without first diagnosing the problems we hope to address, choosing a funding model is a case of putting the cart in front of the horse.

Ultimately, the biggest barrier to achieving a school finance system that is adequate and equitable is not the choice of model, but the composition of the General Assembly. States like North Carolina with position-based funding models are just as likely (or unlikely) to have adequate and equitable school finance systems as are states with pupil weighting systems.

North Carolina’s school finance system has ample room for improvement, but we are unlikely to develop a high-quality school finance system so long as lawmakers refuse to examine the overall level of funding or follow a thoughtful, consensus-based approach to developing a new funding plan. Until policymakers are willing to take a serious approach, discussions of which funding model to use are irrelevant and will distract from the important first steps of developing funding goals and diagnosing existing shortcomings.

This article was first published in the News & Observer. It has been reprinted with the author’s permission.

Kris Nordstrom

Kris Nordstrom is a Senior Policy Analyst with the Education & Law Project. Prior to starting work with the Justice Center in April 2016, he spent nine years with the North Carolina General Assembly’s nonpartisan Fiscal Research Division, where he provided budget analysis and information to all members of the General Assembly on public education issues. Nordstrom holds a Master of Public Policy from the Sanford School of Public Policy at Duke University and BA in Economics from Wake Forest University.