What Public School Finance Officers Want You To Know About School Funding
Educators across the state often complain of tight public school budgets that leave something to be desired. Two school finance officers explain what they want most: more flexibility and more funding.
Workers are up on ladders painting and getting ready to reopen Southern Vance County high school as just Vance County High. The rural district north of Raleigh is consolidating two of its high schools to use space and utilities more efficiently - and ultimately to save money. The district’s enrollment is declining, while the population balloons in nearby urban areas.
Jennifer Bennett heads the finance office at Vance County Schools. She is the one watching the budget around here, and she’s been at the school finance game for 24 years. Bennett was once the director of School Business at the state's Department of Public Instruction, and has also worked as a finance administrator at Durham Public Schools.
Bennett says her biggest challenge is working with limited resources that also come with lots of limitations. She wants legislators and parents to understand that challenge.
"We're doing the best we can with what we have," Bennett said.
Earlier this year, tens of thousands of North Carolina educators marched in Raleigh to demand better funding for public schools. While teacher pay took a spotlight, many teachers say what they want even more than another raise is for their schools to have more money to spend per student.
School finance officers say they agree about the importance of pay and per-student funding, but they also say that the picture is even more complicated by the state’s restrictions on spending.
Bennett has a reputation for getting creative with her district’s money. For the past two years, she has spearheaded a summer internship program for talented art students. She was inspired by a school warehouse.
“I have a blank wall on my warehouse, so maybe there’s some high school kids that could paint a big mural on my warehouse wall,” Bennett explains, “So, how do I go about doing that?”
Bennett had art students make a business plan, choose materials and write a budget. Then she found some unspent Medicaid money - relatively unrestricted funds based on how many students qualify for Medicaid, an indicator of poverty.
Maybe it’s not what you’d expect - using Medicaid funds for an art program. But Bennett says the Medicaid dollars are a pretty rare thing in school finance: a pot of money she can use for just about anything that benefits her students. She has lots of pots of money, but they come with strings attached.
A School Finance Officer Explains The Numbers
Bennett explains that she has about 10 different pots of federal funds, each with its own requirements, about 30 more pots from the state that all have their own regulations on how those funds are allowed to be spent, then some local taxes.
She says trying to pay for everything a school district needs with all those separate buckets is like putting a puzzle together.
Most of the pots - she can only spend them on narrow things. And if a school district doesn’t use all of one bucket, it can’t spend it on other things. It has to give the money back to the state. Last year, $9.7 million designated for education across North Carolina went back to the state’s general fund. It’s less than one-tenth of a percent of the state’s overall budget, but Bennett says that the hundreds of thousands of dollars her district gave back last year matter. Bennett wants more flexibility in how she spends her district’s money so she doesn’t have to give anything back.
“I would like to see more funding, per-pupil,” Bennett says, “and in a broader category that would allow us to offset local costs and have more innovative programs.”
North Carolina ranks 39th in per-student funding. The state’s per-student funding only recently inched back up to what it was before the 2008 recession. Data from the Department of Public Instruction show that those budget increases mostly went toward salary bumps and rising health benefit costs for teachers, while many specific budget line items including textbooks, instructional supplies and teachers’ assistants have never been restored to what they were before the recession. This is the explanation for teachers’ complaints about inadequate school funding in the face of the state’s growing education budget.
Rural counties with smaller, less wealthy tax bases rely on that state funding more than wealthier counties that can supplement their schools’ budgets with local taxes. Counties that are small or have low-wealth tax bases also receive supplements from the state. Bennett says Vance County relies on its low-wealth supplement, but that in her opinion, it's not enough. She says what gets left out of a tight budget are things like field trips and after-school clubs that expose her small-town students to new experiences.
“We’re trying to do what we can to get our kids exposed to what we think they’re going to need for that 2030 job, with those limited funds,” Bennett says.
And, sometimes -her district has trouble just keeping schools staffed. The county can’t compete for teachers with neighboring districts that offer higher salaries enhanced by local tax supplements. Bennett says Vance County Schools had a steady vacancy of 20 to 25 teaching positions all last school year, and that accounted for a large portion of the district's unspent funds that largely could not be transferred to other needs.
Introducing More Flexibility Into School Budgets
The challenges with school funding are similar across the state. Take another semi-rural county like Rowan, more than two hours away from Vance County down I-85. Carol Herndon is the chief financial officer of Rowan-Salisbury Schools. With one year under her belt, Herndon is new to school finance, but she isn’t new to finance.
My first reaction and perhaps the one that has hung with me the longest is that this is way more complicated than it needs to be. - Carol Herndon, CFO of Vance County Schools since 2017
“I grew up in the Food Lion organization, headquartered in Salisbury, North Carolina, and enjoyed a fabulous 23-year career there,” Herndon says.
For many years Herndon was the company’s CFO. Handling a school district’s finances might sound like a piece of cake after managing the multi-billion dollar budget of North Carolina’s largest retailer, but Herndon says she was in for a surprise.
"My first reaction and perhaps the one that has hung with me the longest is that this is way more complicated than it needs to be," Herdon said.
But for Herndon, things are about to get a whole lot less complicated. A new state law singles out her school system and gives it wide flexibility in spending beginning this schoolyear. Rowan-Salisbury Schools’ new label as a Renewal School Districtgives the whole district the same flexibility charter schools get in staffing, curriculum, and finance.
“Instead of getting our money allotted in those 25 or 30 buckets that we have traditionally received money from our state, with rules, if you will, for each bucket, we now get one lump sum allotment from our state with no restrictions,” Herndon explains.
That’s how most districts in the country operate, says Marguerite Roza, a professor at Georgetown University and leading expert in school finance.
“So it might feel groundbreaking in North Carolina, but that is how it works in most places around the country,” Roza says.
Roza often serves as a consultant to state governments. This spring, she spoke to a legislative task force in North Carolina that’s looking to change the way the state funds public schools. Members of the Joint Legislative Task Force on Education Finance Reform are talking about making the state’s rules for school spending more flexible. The task force will make suggestions and the legislature may take the issue up next year. Roza says she often fields questions from legislators considering such a move.
“They’re nervous about giving districts control over their budgets,” Roza said. “And they need to only look to some of these other states to realize that in general, you know, tremendously bad things don’t happen when you give districts flexibility.”
Roza says when schools suddenly get a lot more independence with their finances, they actually spend their money pretty much the same way they did before, but they start to make little adjustments. And she says that’s good, because not all districts are the same. They can use small changes in spending to address specific needs or leverage their schools' strengths.
Herndon says she’s looking forward to the opportunity to spend every dime her district receives from the state.Jennifer Bennett says every dime matters. She says in the past, she’s gone so far as to hold an assistant principal position vacant an extra week, to buy a resource, a tool or an experience her students need.
“It’s just that this kid is 10 this year and he’s not gonna be 10 ever again,” Bennett says, “And he needs to have what every other 10 year old in the state has access to.”
Bennett says the job of a school finance officer is figuring out how to fund the hopes and dreams of her students. She says that’s the business of public schools.
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