Hard-Fought Budget in N.C. Leaves Schools Better Off Than Feared

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After months of wrangling over how to head off a fiscal crisis that educators feared could hobble the state's school improvement efforts, North Carolina's governor last week signed off on tax hikes that will allow the state to boost education spending and provide money for several new initiatives.

The general fund budget of $29.15 billion signed last week includes $11.8 billion for education over two years. It capped off the longest legislative session in state history. With the state facing a nearly $1 billion deficit, the biennial budget was the first significant test of lawmakers' commitment to sustaining the state's 5-year-old accountability plan, begun during the state's economic boom.

"With this budget, North Carolina gives our children—all of our children—every opportunity to succeed," Gov. Michael F. Easley said upon signing the budget Sept. 26. "North Carolina sent a clear message to the nation that our state will take care of its people, in good times and bad."

Education advocates had been closely following dueling budget proposals for months. They worried that lawmakers would opt to balance the budget through spending cuts to education, which was the primary beneficiary of state budget surpluses throughout the late 1990s. The fear was that the state's accountability program would have the legs knocked out from under it.

"For anyone involved in education this has been a real nail-biter," said John N. Dornan, the executive director of the Public School Forum of North Carolina, a nonprofit research organization in Raleigh.

Under the ABCs for Public Education law passed in 1996, schools and teachers earn financial rewards based on students' test scores. The Excellent Schools Act, approved in 1997, has raised teacher salaries by rates of up to 8 percent each year since then.

The approved budget includes a nearly 3 percent salary increase for teachers and administrators—much lower than officials had hoped but significantly more than the $650 across-the-board raises afforded all state employees—and $93 million for bonuses to teachers and staff members in schools that raise student achievement.

Programs Preserved

Gov. Easley, a Democrat, scored victories in getting Democratic lawmakers' support for initiatives he championed during his election campaign last year. The budget includes $6.4 million annually to start a preschool program for 4-year-olds at risk of academic failure. Some $12 million in fiscal 2002, and $26 million in fiscal 2003, will go toward reducing kindergarten class sizes throughout the state to 19 students.

Under the budget, an extra $8 million each year will pay for lowering student-teacher ratios in kindergarten, elementary, and high school classes in chronically low-performing schools. Mathematics, science, and special education teachers who choose to work in low-performing schools will be eligible for $1,800 more in annual pay. And the school year will be extended by five days in the lowest-achieving schools.

The additional revenues will come from a half cent sales-tax hike, and an income-tax increase of half a percent for the state's wealthiest residents.

Still, the department of public instruction will lose nearly $4 million for administration, under the budget, and funds for regional support centers around the state will be cut by $3.7 million.

Vol. 21, Issue 5, Page 25

Published in Print: October 3, 2001, as Hard-Fought Budget in N.C. Leaves Schools Better Off Than Feared
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