Nationwide School Finance Analysis Gives ‘F’ Grades to North Carolina, Calls on Congress to Encourage Funding Reforms


Education Law Center report calls for state reforms and increased federal aid to push states to address state funding inequities

NEWARK, NJ (November 1, 2021) – Last week, Education Law Center (ELC) published its annual report Make note report, which documents the persistence of inequitable funding of schools across the country. The 2021 report highlights the urgent need for school funding reform to close the vast funding gaps between and within states, especially North Carolina.

This year’s edition of ELC’s annual state-by-state analysis comes as Congress and the Biden administration grapple with a key question: Should the federal government take a more active role in promoting equity in school funding, especially for students in the country’s poorest, racially isolated districts and schools?

It is also a long-running dispute over the constitutional right to education of the state of North Carolina (Leandro) reaches a critical point. The judge presiding over the case is set to order the legislature to fund education investments in the state’s comprehensive recovery plan.

As this year’s report shows, North Carolina’s funding per student is several thousand dollars below the national average, even as the state relies on billions in unspent revenue. “The underfunding of schools is not, as some policymakers would have the public believe, a sad reality of budget constraints,” said David Sciarra, ELC executive director and co-author of the report. “Rather, it is the result of inaction and even outright hostility by governors and state legislators to investing in the education of their students.”

Using the most recent data available for the 2018-2019 school year, Skip the note 2021 assesses state education financing systems on three key measures of equity:

  • Funding level measures the combined state and local revenue provided to school districts, adjusted for regional cost differences. (North Carolina Rating: F)
  • Distribution of funding measures the allocation of funds to school districts relative to the concentration of students from low-income families. (North Carolina Grade: C)
  • Fundraising effort measures investment in the K-12 public education system as a percentage of a state’s economic productivity (GDP). High-effort, high-capacity states, such as New Jersey, New York, and Wyoming, generate above-average levels of funding, while low-capacity, low-effort states, such as Arizona, Florida and North Carolina have the budget to improve their below-average funding to levels more in line with the national average. (North Carolina Rating: F)

Given the resistance of state legislators over the past decade to significantly increase funding for education, Skip the note 2021 Calls on Congress to seriously consider using federal funding as leverage to induce states to reform their inequitable financial systems.

“ELC’s annual reports are the gold standard for understanding whether states fund schools fairly and how they rank against each other,” said Matt Ellinwood, director of the Education & Law Project at the North Carolina Justice Center. . “This year’s report once again demonstrates just how far North Carolina has fallen nationally and how much work is needed to get back on track. Fortunately, the funding and application of the Leandro plan offers us a way forward.


Skip the note 2021 is co-authored by Dr. Danielle Farrie, ELC Director of Research, and David Sciarra, ELC Executive Director. View the full report and explore the results with interactive tools.


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