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Perspective | Clashes of power and priorities over funding schools

The standoff over public school funding in North Carolina is not a stand-alone dispute. Rather it is a product of clashing power and priorities, with a resolution to enhance the education of the state’s 1.3 million students hard to reach.

Why so difficult when state government has an overflow of revenue? Part of the answer stems from the divided powers — and checks on power — among the executive, legislative, and judicial branches of government. Another part arises from the reality that public education funding does not stand isolated from persistent tax-cutting and the drawing of legislative districts that depress competition to embed a partisan majority.

Three years ago, Superior Court Judge David Lee held the state in “ongoing constitutional violation” of the right to a sound basic education in the long-running Leandro litigation. An independent national education consultant commissioned by the judge produced an eight-year “action plan.” Democratic Gov. Roy Cooper proposed a budget aligned with Judge Lee’s subsequent rulings on the plan.

But the budgets fashioned by the Republican majorities in the state House and Senate drew a rebuke from the judge who detected a “willful refusal to act” even with sufficient funds available. Republican lawmakers snapped back in defiant defense of the legislative prerogative to appropriate state revenues.

State appropriations for K-12 schools in the 2021-23 cycle will almost certainly remain far short of the governor’s proposals and the judge’s expectations in the budget still in negotiations between House and Senate Republicans. The budget is also almost certain to provide for another round of tax cuts that will further erode the state’s fiscal underpinning — a sign of the persistence of tax reduction as a top-most priority of the Republican majority.

Since 2013, the legislature has reduced both corporate and individual income tax rates. The state now has a one-rate flat individual income tax, which contravenes the fairness principle that taxes should reflect the ability to pay. North Carolina now ranks lowest among states with a corporate income tax. 

Legislation to extend the sales tax to more services and entertainment and a court ruling on collecting taxes on out-of-state sales offset some, but not all, revenue reduction. In the 2020-21 fiscal year, according to state fiscal analysts, the tax cuts of 2013 and subsequent shifts reduced annual revenue by $4.2 billion.

Now, lawmakers are negotiating further cuts in taxes for both individuals and businesses, perhaps phasing out the corporate income tax. The argument goes that the current substantial surplus makes tax cuts of an estimated $2 billion possible. But, of course, the tax reductions would live on through the decade when North Carolina will need revenues to carry out a Leandro plan or any other initiative that might develop with broad support.

The policy environment of the decade ahead will be shaped, as was over the past decade, by the redrawing of legislative districts. After Republicans swept into power in the 2010 legislative elections, they constructed districts that provided them with veto-proof majorities — until a later court ruling required a lessening of the excessive gerrymandering. 

Still, in the 50 state Senate-district elections of 2020, 31 resulted in a lawmaker winning by 20 percentage points or more. In the state House districts, 92 of 120 elections were won by 20 points or more. Few North Carolina legislators come from genuine swing districts; most are elected from distinctly Democratic or Republican districts, meaning they have little political incentive to reach beyond their own party.

A Pew Research national survey conducted in July sheds light on the consequences for education policy and funding. It found sharp differences between Republicans and Democrats in their attitudes toward major institutions, both private- and public-sector, with Republicans’ assessments having “taken a sharp negative turn in the past few years.”

“The survey finds that partisan differences extend to views of K-12 public schools; 77% of Democrats say they have a positive effect, compared with 42% of Republicans,” Pew reports. “A 57% majority of Republicans, including nearly two-thirds of conservative Republicans (65%), say public elementary and secondary schools have a negative effect.”

As the 2020 elections showed, North Carolina is a highly competitive state, with growth in unaffiliated voters and with neither Republicans nor Democrats holding an assured statewide majority. It has a Democratic governor with a veto, a legislature with a Republican majority and just enough Democrats to sustain a veto, a Superior Court judge trying to find effective leverage to enforce a constitutional mandate — and students and educators whose lives and futures remain at the center of the standoff.

Ferrel Guillory

Ferrel Guillory is the Director of the Program in Public Life and Professor of the Practice at the UNC Hussman School of Journalism and Media, and the Vice Chairman of EducationNC.