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Getting ready for the education budget: What you need to know from 2014-15

Between the campaign ads last fall and the negative headlines that dominate coverage of our schools, it is hard to know what the deal is with education funding. Is it up? Is it down? Both sides rely on numbers that support their conclusions and pick the comparison point that strengthens their argument. The debate around budget cuts — what exactly has been cut and by how much — is also confusing.

As we prepare to consider the Governor’s budget for 2015-17, here is some information about the 2014-15 budget, which revised the state’s 2013-15 budget.  Funding and spending can be different; this article is about funding.

One of the easiest ways for the public to track state funding over time is to use the revised appropriation year to year. Each session there is a budget bill, and there is also a companion joint conference committee report, which provides details on the increases and decreases to the budget. Both are available back to 2005 on the legislature’s website in the Fiscal Research Division under budget legislation.

In the committee report, there is a summary of general fund appropriations (click image to enlarge):

When you hear budget numbers, the first question is what does the number include? Is it a total number for public education, community colleges, and the university system? Or just public education?

In EdNC’s EdLibrary, we have excerpted the summary of general fund appropriations from the committee report from 2005-2015.

Revised Appropriation for Public Education (K-12), 2005-15

2005-06

$6,607,998,945

2006-07

  6,719,751,118

2007-08

  7,714,429,569

2008-09

  7,802,046,538

2009-10

  7,456,261,240

2010-11

  7,085,588,912

2011-12 

  7,464,492,057

2012-13

  7,506,553,067

2013-14

  7,867,960,649

2014-15

$8,104,976,608

Note that legislation passed after the budget bill — often technical corrections bills, but sometimes other bills — can change the budget numbers. The difficulty involved in tracking down those modifications sometimes adds to the confusion surrounding final budget numbers.

The Office of State Budget and Management (OSBM) certifies the budget after the session adjourns. In 2014-15, the certified budget for education is 956 pages long. Don’t worry — you can find what you need to know in the first six pages, which is a summary by purpose. This year, the certified budget matches up with the budget bill — $8,104,976,608 for the state appropriation.

According to the certified budget, total funding for public education is $11,513,577,425. Funding from other sources accounts for the extra $3,408,600,817. This chart shows how the money is spent:

2014-15 Certified Budget

DPI = Department of Public Instruction, LEA = Local Education Agency
RttT = Race to the Top
SPSF = State Public School Fund

Source: OSBM Certified Budget, EdNC calculated the 2014-15 State Appropriation

Fund Code Fund Title 2014-15 Requirements 2014-15 Receipts 2014-15 State Appropriation
1000 DPI – Executive and Administrative Functions $8,369,635 $4,240,240 $4,129,395
1021 DPI – Education Innovations – 21st Century Schools $1,317,886 $58,475 $1,259,411
1080 RttT – Management $1,301,663 $1,301,663 $0
1081 RttT – Technical Infrastructure $14,095,145 $14,095,145 $0
1082 RttT – Evaluation $2,750,779 $2,750,779 $0
1083 RttT – Instructional Improvement $6,803,297 $6,803,297 $0
1084 RttT – Teacher and Principal Evaluation $1,205,025 $1,205,025 $0
1086 RttT – Leadership Academy $7,958,842 $7,958,842 $0
1087 RttT – Teach for America $2,498,500 $2,498,500 $0
1088 RttT – NC Teacher Corps $1,957,299 $1,957,299 $0
1089 RttT – Induction Support $2,062,127 $2,062,127 $0
1091 RttT – Virtual Courses $1,822,485 $1,822,485 $0
1092 RttT – Professional Development $9,615,414 $9,615,414 $0
1093 RttT – Turning Around $10,346,881 $10,346,881 $0
1094 RttT – STEM Anchor Schools $1,015,790 $1,015,790 $0
1100 Assistance to Districts and Schools – DPI $21,987,416 $16,692,182 $5,295,234
1300 DPI – Financial and Business Services $3,136,154 $816,827 $2,319,327
1330 DPI – Student and School Support Services $15,361,116 $11,650,421 $3,710,695
1400 Office of Early Learning $73,449,823 $65,579,940 $7,869,883
1410 North Carolina Center for the Advancement of Teaching $3,219,422 $200 $3,219,222
1440 Family Engagement $750,000 $750,000 $0
1450 K-3 Assessment $2,748,986 $2,748,986 $0
1500 DPI – Technology Services $11,845,287 $4,372,339 $7,472,948
1600 DPI – Curriculum, Instruction, Accountability and Technology $56,482,982 $45,364,166 $11,118,816
1640 Educator Quality and Recruitment – DPI $18,872,074 $18,116,316 $755,758
1660 DPI – Special Populations $43,707,328 $39,675,306 $4,032,022
1800 K-12 Classroom Instruction -SPSF $6,837,109,503 $630,409,717 $6,206,699,786
1808 SPSF – Statewide System Operations and Maintenance $10,258,861 $0 $10,258,861
1810 SPSF – Local Education Agency – Administraton $92,511,468 $0 $92,511,468
1811 Assistance to Districts and Schools – SPSF $1,255,840,228 $1,255,840,228 $0
1821 SPSF – Education Innovations – 21st Century Schools $30,258,507 $0 $30,258,507
1830 SPSF – Student and School Support Services $653,082,643 $144,927,281 $508,155,362
1840 SPSF – Teacher Quality and Recruitment $365,832,301 $365,832,301 $0
1860 SPSF – Special Populations $1,582,827,875 $684,277,137 $898,550,738
1861 Residential School – Administration $266,754 $0 $266,754
1862 NC School for the Deaf $7,973,922 $7,500 $7,966,422
1863 Eastern NC School for the Deaf $7,186,990 $10,500 $7,176,490
1864 Governor Morehead School and Preschool $5,000,487 $6,014 $4,994,473
1870 SPSF – LEA – Supplemental Benefits $256,488,105 $0 $256,488,105
1885 RttT – LEA Teacher and Principal Effectiveness $4,661,805 $4,661,805 $0
1890 RttT – LEA Strategic Staff $12,549,144 $12,549,144 $0
1894 RttT – Local Education Agency – STEM Anchor $15,379,428 $15,379,428 $0
1900 Reserves and Transfers $42,301,568 $21,201,117 $21,100,451
1901 Pass-Through Grants $9,366,480 $0 $9,366,480
    $11,513,577,425 $3,408,600,817 $8,104,976,608

 

Note that four funds account for 97 percent of the funding (1800 K-12 Classroom Instruction SPSF; 1860 SPSF Special Populations; 1830 SPSF Student and School Support Services; and 1870 SPSF LEA Supplemental Benefits).

All of the state’s Race to the Top (RttT) funds must be spent by August 15, 2015. The state will need to decide how to fund professional development and turning around schools post-RttT.

It would be interesting if Democrats put forth an alternative spending plan that indicates how they would spend the state appropriated dollars and how additional appropriations should be allocated.

Changes to the education budget can be found in the committee report. Here are the changes from last session. Recurring (R) means the dollars will be included in the budget going forward. Nonrecurring (NR) means it is a one-time appropriation. If the dollar amount is in parens, then the funds were reduced. There are more detailed notes in the committee report on each line item. Where the committee report indicates the fund code in the certified budget that was adjusted, it is indicated.

2014-15 Changes in the State Appropriations for Education

Compensation Increase for Educators
    Funds for new teacher salary schedule.
$275,514,319
$6,764,338
R
NR
Longevity Pay for Educators $24,299,233 NR
Compensation Increase for School-based Administrators $5,818,632
$133,410
R
NR
Compensation Increase for Non-certified and Central Office Personnel $32,635,439 R
Compensation Increase for the Department of Public Instruction $1,652,844 R
State Retirement System Contributions – School District Personnel $26,455,623 R
State Retirement System Contributions – Department of Public Instruction $226,087 R
Average Daily Membership for 1,520,305 students
    Funds fewer students than originally projected.
($37,453,734) R
Average Certified Personnel Salaries ($64,923,926) R
ADM Adjustment Opportunity Scholarships (1800) $11,797,941 R
Education Lottery Receipts: Classroom Teachers (1800) ($33,942,997) R
Education Lottery Receipts: Teacher Assistants (1800) ($113,318,880) R
Exceptional Children Headcount (1860) ($5,327,241) R
Civil Penalties (1800) ($4,000,000)
($7,572,230)
R
NR
Excellent Public Schools Act
    DPI has $38 million to implement this act.
$6,015,859 R
Classroom Teachers (1800)
    Decreases class size by 1 in K and 1st grade.
$41,932,566 R
Excellent Public Schools Act – Five Extra Days
    Mandate eliminated.
($391,637) R
Education-Based Salary Supplements Restoration (1800)
    Restoration is limited to certain teachers.
$18,700,000 R
School Bus Replacement (1830) ($3,369,983)
($3,369,983)
R
NR
Teacher Assistants (1800)
    $368.3 million available for this allotment in total.
($129,912,165)
$24,815,645
R
NR
Central Office Administration (1810)
    Reduces funds to school districts of central office staff by 3 percent.
($2,750,000) R
Transportation (1830) ($4,630,992) R
Small County Supplemental Funding (1800)
    $46.3 million available for this allotment in total.
$3,591,140 R
Panic Alarms (1830) ($1,100,000) R
Cooperative and Innovative High Schools (1821) $1,864,014 R
Textbooks (1800)
    $24.3 million for this allotment in total.
$905,000 R
Merit Pay for Teachers (1800) ($10,200,000)
$10,200,000
R
NR
Differential Teacher Compensation $1,000,000 NR
At-Risk Student Services (1800)
    $283.7 million for this allotment in total.
($9,263,980) R
Funds for Children in Private Psychiatric Residential Treatment Facilities $3,200,000 R
DPI Flexible Reduction
    Reduces support to DPI by 10 percent.
($5,026,050) R
NC Center for the Advancement of Teaching (1410) $3,239,639
($3,239,639)
R
NR
Military Interstate Children’s Compact Commission (1660) $11,694 R
Teaching Fellows (1900) ($3,095,000) R
Communities in Schools (1901)
    $2,446,750 in total state support.
$1,000,000

As you might anticipate, the changes reflect Republican priorities. You see funding for Sen. Phil Berger’s Excellent Schools Act. You see funding for opportunity scholarships. You see cuts in funding to teacher assistants and the Department of Public Instruction. A nice surprise: A $3.2 million appropriation so students being treated in psychiatric residential treatment facilities can have access to classes while in treatment.

Of course, it is important to note the impact of changes in budget priorities over a longer period of time. Given the growth in our state and student population, we need to watch the state’s portion of the per pupil expenditure, which according to the Department of Public Instruction’s Statistical Profile has decreased from $5,703.70 in 2009 to $5,390.12 in 2014 (current expense expenditures including child nutrition). And, with more money going to benefits and salaries, we need to watch the level of funding available for the classrooms, including instructional materials, teaching assistants, and teachers, as well as transportation. As we analyze the 2015-17 budget, we will be researching longer term trends and impacts of the state’s funding priorities.

North Carolina will be using a base budget instead of a continuation budget going forward.  Historically, the continuation budget included appropriation increases for the public school funding formulas (teachers, instructional supplies, textbooks, instructional support personnel, teacher assistants, etc.) due to projected increases in average daily membership (ADM). As the new statutory base budget excludes appropriation increases for ADM growth, funding for public school enrollment growth is now considered an expansion budget request and has been requested by the State Board of Education along with their other expansion budget priorities. We will need to see how funding for enrollment growth is addressed in the Governor’s 2015-17 budget recommendations and how it is considered in the legislative budget process this session. Here is OSBM’s instructions for preparation of the 2015-17 Recommended State Budget.

Note also that past appropriations put salary increases in reserves that were distributed later by OSBM, but this year salary increases were placed in agency budgets.

A couple of other resources might be helpful. Tracked and prepared by the Fiscal Research Division, here is a link to legislative salary increases for state employees and teachers from 1973-74 to 2014-15.

Here is the 2014-15 fiscal brief on education.

Here is an annotated version of the 2014-15 budget.

EdNC’s analysis of the state’s funding priorities on education will be a work in progress as the session unfolds. What do you think? What are your priorities?

Mebane Rash

Mebane Rash is the CEO and editor-in-chief of EducationNC and the N.C. Center for Public Policy Research.