The longest and deepest recession in our history took a devastating toll on North Carolina. As in the rest of the country, property values, wages, and interest rates dropped precipitously. Additionally the recession accelerated the loss of many of the fundamental economic drivers in our state such as furniture and textiles with tobacco and construction taking extraordinary hits.
Rural North Carolina was especially hard hit as these industries packed up and left town. At the same time, the implosion of our banking sector hit urban hubs with down-sizing that sent shock waves through our major metropolitan areas. And, like the rest of the country, we endured excruciatingly high gasoline prices.
North Carolina is a big state, 9th largest in the USA. The state’s general fund budget has grown from about $12 billion a year in the early nineties to over $20 billion in 2014. Much of that is due to our rapid growth as low taxes and great services, combined with near-idyllic weather, attracted more people from the Northeast and Midwest. With all the new residents, we scrambled to keep up our roads, build schools, and find places for these new folks to work as well as put our dependable workforce back into action — a near impossible task in the face of a declining economy and reduced state revenues.
Education took a great deal of the brunt. In North Carolina, education is by far the biggest part of our state’s general fund budget, consuming well over 50 percent of the annual state appropriations. The North Carolina constitution puts much of the responsibility for funding education on the state versus the local counties and municipalities as is the case in many other states. By the end of 2010, the Democrat-led state government had cut education to the bone and beyond. Teacher pay was frozen and spending on textbooks, supplies, and professional development was decimated. The state took from the highway fund to support many overly-generous social programs, they raised taxes, added a “temporary” tax, stopped paying their bills, and borrowed till they could borrow no more.
In 2011, the political winds changed dramatically. For the first time in over 140 years, the North Carolina General Assembly was taken over by a Republican majority and in 2012, a Republican governor was elected. Republicans increased their majority in both houses of the legislature. But, when the new team came to town in 2011, it was faced with a near $3 billion short-fall. The recession was still raging and spending was still out of control.
Fast forward four years to 2015. Taxes are down, income is up. The state coffers have a surplus. Employment is up dramatically. North Carolina is among the few states with a Triple-A bond rating and has paid off its unemployment compensation debt to the federal government (three years early). Tax rates have been cut for all North Carolinians, and we have been nationally recognized for the major improvement in our business climate. Employers are returning to our state, and unemployment is down dramatically. Our state is now considering a $2.8 billion bond package in order to fix much of the infrastructure that was allowed to deteriorate, assist local school districts with needed construction, and build new facilities for our colleges and universities to serve a burgeoning student population and provide for instructional needs for the 21st century. Bond proceeds will also continue to support a strong military presence.
Education is roaring back as the pride of our state. We have put over a billion dollars back into education. Pay for new teachers rose significantly last year and will do so again this year. High school graduation rates are at an all-time high. We have been nationally recognized for our increase in academic standards for all grades. Public charter schools have increased in both number and quality without any negative impact on our traditional public schools. Our public schools continue to serve one of the most diverse populations in the nation, and we are the most digitally-connected state in the Union for our public schools. We continue to fully fund enrollment growth, and our colleges and universities are among the most highly state-funded public systems in the nation while tuition continues to be among the lowest in comparison to peer institutions.
The latest NC House budget proposal includes a transformative vision to elevate teachers and school leaders. Significant teacher and principal pay raises are also in the House budget proposal as well as scholarship money to attract and retain highly effective teachers, especially those that will commit to teach in high needs schools and subject matter. There is also a major new program for principal development and a plan that will allow effective teachers to stay in the classroom and earn even more money while mentoring other teachers in their schools. The objective is to put the very best teachers in front of the most number of kids.
North Carolina is moving dramatically ahead in implementing a digital education initiative that will expand wireless broadband to every classroom in our state, train our teachers how to take advantage of the latest in technology in the classroom, and consolidate technology purchasing to lower costs. Some districts are improving outcomes faster than others, so the House budget proposal increases funding for textbooks and digital resources by over 100 percent. Reading by third grade appears to be on the rise thanks to an innovative READ TO ACHIEVE program begun in 2012. Vast improvements in innovative reading curriculum supported by a competent corps of Teaching Assistants will contribute to improvements for our youngest students’ ability to read.
Our community colleges and universities continue to perform at the highest levels in the country. The House budget proposal supports expanded technology in the community colleges, increases the pay for faculty, and invests in advanced manufacturing instruction.
The House proposal continues to support the UNC system with increases in pay and support for our struggling HBCUs (Historically Black Colleges & Universities). North Carolina has a magnificent history with these schools, but they are now struggling. They are not only great schools but also economic drivers in their communities.
It has been challenging to make the necessary changes; not everyone has yet adjusted to the new paradigm. The nay-sayers are plentiful, but that is always the case when change means that they too have to change. The battle rages on with the NC Senate determined to lower taxes and the NC House determined to invest in education. For the first time in history, the House Education Appropriations Committee approved an education budget with the support of ALL their members, both Republican and Democrat, voting in favor. Progress is happening in North Carolina, and we are doing it the North Carolina way with innovation, creativity, and hard work.
This is an education transformation that should make all North Carolinians proud.