$427 million - the price of compliance

Published June 18, 2020

By Bob Luebke

Yesterday the State Board of Education and members of Governor Cooper’s administration submitted an action plan to Superior Court Judge David Lee as part of the ongoing work to ensure the state is compliant with the constitutional requirements of the long-running Leandro case.

Yes, I know that was a mouthful. So  let’s break that down. In early January Superior Court Judge David Lee issued a consent order accepting the findings and recommendations of the WestEd  Report (e.g. North Carolina must spend up to an additional $8 billion over eight years to be compliant ) and ordered the parties to develop an action plan to implement the WestEd recommendations and report back in 60 days.

Obviously, for whatever reason that timeline was not met; and the deadline was extended to June 15th.

What’s in the plan?

The document lays out a seven-part plan with an immediate price tag for FY 2021 of approximately $427 million. You’ll be interested to know that $235 million of the plan – or a little over half of the proposed funding for first year —  is for a 5 percent salary increase for teachers to “ increase educator compensation and creation compensation incentives to enable low-wealth districts to attract and retain qualified and well-prepared teachers.”  The price tag makes it obvious that salary increases are going to more than those in just low-wealth districts.

If you remember, Governor Cooper vetoed teacher pay raises in last year’s budget,  the two previous budgets as well as mini-budgets that included them last year. According to the North Carolina Department of Public Instruction, teachers have received pay raises in each of the last six years.

So, if North Carolina decides to move forward with the plan, where is the money coming from? Who knows? Coronavirus has tanked national and state economies. And the latest estimates project a $4.2 billion-dollar reduction in revenues over the biennium and projected revenue shortfalls of $1.5-2 billion this year.

Five percent salary increases for teachers will be a hard sell in this environment. Working the numbers will certainly require some creativity by the Governor since he has promised to improve North Carolina education without raising taxes.

It’s important to realize that only the action report was submitted to Judge Lee. He has yet to rule on whether he accepts the plan in total or in part with changes.  If history is any guide, Judge Lee accepted the entire WestEd Report without changes. People who watch some issues closely tell me Judge Lee may respond to the action plan in the next few days.

So, what does it all mean?

Is the legislature required to implement the action plan?  The language of the plan sure implies a state requirement and commitment. However, the plan also recognizes the reality of state finances when it says:

As of June 15, 2020, the state does not have a clear picture of what state or federal funds will be available. If due to budget constraints, the state is not able to fulfill these actions in Fiscal Year 2021, the State commits to meeting these actions in a future fiscal year of the eventual eight-year Plan.
I don’t know the specifics of what that all means, but it does seem to reflect some notion of reality and a little wiggle room for lawmakers.

What does the legislature think of all this education policymaking by the courts? Do they see the courts as infringing on their responsibility? Or, do they view the action plan as a starting point? Those questions have always been looming in the background.  And their answers  will tell us a lot about what is likely to happen — or not happen — in the next few weeks.

So far, no word yet from Sen. Berger or Speaker Moore. But be sure certain they will have something to say.