HomeMy WebLinkAboutAgenda - 12-07-2015 - 4-e - Presentation on County Financing of Public Schools 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 7, 2015
Action Agenda
Item No. 4-e
SUBJECT: Presentation on County Financing of Public Schools
DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
1) NCACC - Basics of County Bonnie Hammersley, 919-245-2300
Financing of Public Schools Dr. Linda Millsaps, North Carolina
Associate of County Commissioners
(NCACC) Research Director
PURPOSE: To discuss North Carolina's governing and financing structure for public
education including the different roles that counties have in funding public schools.
BACKGROUND: The Board of Orange County Commissioners (BOCC) requested a
presentation clarifying the legal roles and responsibilities of the County and the school
districts in requesting and appropriating operating and capital funds.
FINANCIAL IMPACT: There is no immediate financial impact related to this discussion.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is
applicable to this item:
• GOAL: ENABLE FULL CIVIC PARTICIPATION
Ensure that Orange County residents are able to engage government through
voting and volunteering by eliminating disparities in participation and barriers to
participation.
RECOMMENDATION(S): The Manager recommends that the Board receive the
presentation and provide any comments and questions.
,p lAttachmen
2
Basics _'f County Financing of Public Schools
NorthCmroknms Unique Financing&Governance Structure for Public Education
• NC counties are charged with building, equipping aud000iutoiuiugachooJfacilbica; G.S. 115C-4O8(b) stipulates that
public school facilities requirements will bc met bvcounty governments.
• NC counties are recognized statutorily as the local taxing authorities for independently elected school boards;in most
other states,the school system acts as its own taxing authority.
• The State of NC is charged with funding school operations, known as current expense; G.S. 115C-408(b) stipulates
that the state, from state revenues,will fund public school operating instructional expense oa defined iu the standard
course ofstudy.
• NC counties supplement state school operating cxpcuaca. G.S. 115C-426(c) stipulates that local current cxpcuac
funding, largely meaning county funding of school operations, is "sufficient" when added to state resources, "within
financial resources and consistent with the fiscal policies of the board of county commissioners"
• School cxpcuaca--operatiug, capital and debt service—consume nearly 35Y6of total county annual budgets.
n*��^°o"""ws,p°"*
° State statutes expressly permit LEAs to sue counties over ''sufficiency" m�".�zo,, ,z
�msm/o"'woamw"
I
of current cxpcuac or capital funding levels, leaving courts to decide other n(Jhnnls "mx
sufficiency. School boards are not expressly permitted to sue the state or zrw-___
federal governments for lack of sufficient funding, and no other entity ~�nmm^cs�mm/u
iS specifically granted this power tV sue 8 taxing authority over funding ,414000,ty
sufficiency. Debt Service
Public
• Some counties have multiple SChVVldiStdCtSwbhiuCVuuty boundaries, ^~-~
typically referred to as "City districts"; NC city governments have no -Debt servceAll
authority and douotfivauccachoolo�cratiouaorc:�bal� couuticafuud H"°** other
'
city districts by allocating school operating dollars proportionately
based ou per pupil allotment.
County Spending
County Funding f School C ital Needs
• County appropriations for school capital projects are usually projeCt-SPeCifiC- Total Pulbmusc*omn Capital Funding mvsmwrom,
• As local taxing authority, counties issue debt for school construction and mma«w y616M 2011-12
renovation projects. The school facility oaact reverts to the school board's S
3% Federal
ownership $5w�1M
^ y�
• School districts must report school capital needs per a statewide 5-year survey.
Based ou the most recent survey, school systems report nearly $8.2 billion in
school construction and renovation needs. County
• Counties are required to act aside o portion of county-levied sales taxes for nm$543 88%
school capital uccda, 45% of one penny tax levy or roughly $350 million in
2013.
• Property tax rcvcuuca are also an important source of county funding for School Spending
school facilities. Counties are increasingly relying on property taxes as state-
shared sources of revenue, such as corporate tax(ADM Fund) and lottery proceeds, dry up.
County School Capital Funding Drops in Recession, Per Capita • During the recession, counties sacrificed school capital investments
to maintain classroom operations support. Between 2008 and 2012,
SchoolCapitW t Sc hoo 11 C urre nl
------------------- county school capital investment plummeted from $1.4 billion in
S tA 00 2008 to $545 million in 2012.
$800
$600 County Per Capita Expenditures by Object
$400
$200
60
2'(X137'08 7006 W) 210019 10 2010 11 201112 Total Public School Fuinding �bly Source,
Clphna .110.1 C",I,ow V,,S021 Capilal III odh�Op-Ai I it] Iv C,NA111 Ouddy N S apaN I m a MAN ON $1l2.5B 2011-12
County Spending
Current Expense
County Funding of Current Expense (School Operating) County
......................................................................................................................................................................................................................................................................................................................................................................................................... $3,28 &Capital
26%
• NC counties fund $3.2 billion to support 26% of public schools'total
spending. State
$7.613
• Counties spend over $2.5 billion to augment state school operating Federal 601%
dollars. 51,78
14%
School
Spending
Sources of Per Pupil Funding, CE
Trends in County School Funding (Excludes Nutrition)
............................................................................................................................................................................................................................................... $9,000
$8,000
• County funding of current expense has been growing over time; $7,000
$60
federal funds have been substituted for state funds over time. 00 J
Mechanics of County School Funding
........................................................................................................................................................................................................................................................................
2000200120022OlD32004200,,520106,ZOO?200820092O2,O2Q,l32032�201,3
• Counties generally provide school current expense funds in a lump $tate Federal WC.ounty
sum appropriation, allocating 1/12 of the total appropriation each
month; school systems may use county current expense dollars on County Funding of School IP ersonn6l,2013
any allowable expenditure,including additional school personnel(see 25% 7% 2014 31%
chart). School districts largely use county dollars for non-certified teeeep
and administrator positions. MOW 18,52901 60,306
• Counties and school boards may agree to fund teacher salary eo,aao 6,195 of 95,146 "AIRMIRM
supplements, using county funds, to increase the state school as'ar"D"K
personnel salary schedule. School boards may use county funds to 20,0H 1 72 of 15,975 2,916 of 14,7 22
supplement other school personnel through supplements. In 2012-
13, 106 LEAs funded teacher salary supplements, ranging from $147 Administrators Teachers Othet Certified Assts&0ther
to $6,031 annually,with a weighted state average of$3,478. 108 have Full-time onily ir State Federal County
principal supplements,ranging from$175 to$28,673 annually,with a
weighted state average of$11,338.Total county costs for all supplements,including teachers,principals,coaches,band
leaders, and superintendents, exceed $430 million annually.
• State surplus school funds revert to state at close of fiscal year while county surplus funds remain in the school district's
fund balance under the control of the school board. From 2008 to 2012, school fund balances increased 79%to $664.7
million.
• The school board allocates county funds to individual schools—counties cannot allocate funds directly to schools.
• Each school district must share its county current expense funds,but not capital funds,with charter schools based on
per pupil allocation for each charter school student whose home residency is in the county.County school funding for
charter schools follows the student, including those students who attend charter schools outside of the county.