N.C. Assembly Considers School-Finance Shift

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North Carolina's General Assembly is considering legislation that would shift much of the burden of school finance from the state to the local level.

The legislation, which evolved from a two-year study by a bipartisan committee appointed by the legislature, would increase the local burden for education from about $500 million to $750 million annually, according to an analysis by the North Carolina Association of County Commissioners (ncacc).

The legislature appointed the committee, whose 10 members come from both houses, in 1981 in response to repeated shortfalls in the state education budget. Government officials have expressed concern that the state's school-finance system has become so complex that neither state nor local officials understand their responsibilities.

The legislature has implemented across-the-board cuts in the state's $4.5-billion budget, which faced a shortfall of more than $100 million this year. Lawmakers have also considered several changes in tax laws to raise additional revenues. About 42 percent of the budget is allocated to education.

The committee recommended that the legislature enact three bills to change the way the state's education system operates. One would affect salaries of teachers and other school personnel; a second would affect other areas of school finance; and a third would alter the way the state's education system is governed.

Under the two bills that deal with finance, the state's counties would be given authority to increase local sales taxes from 1 cent to 3 cents. The ncacc estimates that each cent of county sales tax generates $265 million statewide.

State education officials said they doubted that the fate of the bills would be resolved during the current legislative session, which is expected to end early next month. The finance committee of the House of Representatives has already conducted public hearings on the legislation.

Under the current finance system, the state is responsible for paying the salaries of a minimum number of administrators, teachers, and support personnel. If local governments wish to pay employees more than the state salaries or to hire additional employees, they must assume the additional cost.

The legislation would cut the state's payments for the minimum personnel expenses by 30 percent. Additional personnel costs would still be the responsibility of local districts. The proposal would also give the state complete responsibility for capital projects, now financed by the districts.

Reaction to the proposals--and their possible effects--has been mixed.

C. Ronald Aycock, the executive director of the ncacc, said the authority to increase sales taxes would not necessarily ensure that districts receive as much money as they do under the current system.

Some of the state's smaller counties, he said, have an "insufficient [tax base] to run the schools at current levels."

Edmund P. Regan, the organization's fiscal analyst, said the reforms would not clarify the responsibilities of the state and local governments--one of the principal aims of the joint committee. Deputy State Superintendent Jerome Melton also testified against the legislation. "The public schools can only lose," he said.

Representative D.R. Mauney Jr., the Democrat who introduced the finance legislation, said that he did not agree with all of its parts but that the finance package offers enough of an improvement over the current system to pass.

The finance committee of the House last week voted to recommend rejection of the bill that would make the superintendent of public education's job an appointed rather than an elected job. The Senate's finance panel was also scheduled to vote on the matter.

Vol. 02, Issue 38

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