Prosperity Watch Issue 28, No. 1: North Carolina's K-12 education budget for 2014 remains well below 2008 levels
North Carolina’s economic progress depends on a well-educated population, and the state’s K-12 public education budget plays an essential role in building and maintaining a high-quality education pipeline. The new 2014 state budget, however, fails to provide adequate resources to meet this fundamental challenge. In fact, General Fund expenditures on public schools falls $117 million short of what was needed to maintain current service levels in public education.
Contrary to false claims that the new budget spends the most on public education in North Carolina history, inflation-adjusted total state spending on the K-12 system is still $562.5 million lower than it was six years ago in 2008—before the onset of the Great Recession and the influx of funds from the American Reinvestment and Recovery Act.
In fact, the only way that the 2013 education budget can be considered the highest in history is if a basic rule of economic analysis is ignored and previous education budgets are not adjusted for inflation. Inflation results in the steady and cumulative erosion of the value of each dollar. As a result, a dollar in 2013 has less value than that same dollar did in 2003, so comparing state expenditures made in 2003 to those made in 2013 is like comparing apples to oranges—unless we can take into account the different value of money in these two years. And we do this by adjusting for inflation—putting these original (or nominal) spending levels from both years into constant dollars that reflect the change in the value of money over time and can be compared from year to year. Once we put the spending from every education budget over the past decade into constant FY 2013 dollars, it is clear that this education budget is far from the highest in history and, in fact, is well below spending levels from six years ago—reinforcing the reality that state investment in public education is moving backwards.
Education is the ticket to long-term job creation and economic prosperity. Unfortunately, the 2014 K-12 public education budget fails to adequately support North Carolina’s kids, schools, and teachers, and as a result, undermines our state’s ability to meet these long-term economic goals.