North Carolina State Budget

October 11, 2017 | Legislation Fixing Principal Pay Glitch For Principals Paid On Teacher Salary Schedule Signed By Governor

This week, Governor Cooper signed into law a piece of legislation which, among other things, fixes a glitch in the "hold harmless" provision which prevented principals being paid on the teacher salary schedule from receiving their longevity pay, resulting in these principals taking a reduction in pay. NCASA worked with House and Senate leaders to resolve this issue to ensure that no principal earns less in pay this year than they did last year, per the General Assembly's intent. The technical correction fixes this issue and is retroactive to July 1, 2017, making those principals impacted by the glitch whole. 

There was speculation the bill, approved by the General Assembly last week, could be vetoed by Governor Cooper over provisions unrelated to the principal pay fix.  NCASA appreciates the House, Senate and Governor Cooper's work in ensuring no principal earns less under the new principal pay plan enacted this year by making this timely technical correction.

An updated 2017 Enacted Law Summary reflecting this, and other changes, can be found 

August 31, 2017 | Comprehensive Summary of 2017-2019 Budget Is Now Available

Earlier this year when the 2017-2019 budget was passed by the General Assembly, NCASA provided our members with a summary highlighting those provisions likely most important to the K-12 public education community. NCASA has completed a more comprehensive and thorough budget summary, summarizing all budget provisions which impact the K-12 education system and its employees. That summary can be found here.
As a reminder, a summary of all other legislation impacting K-12 public education enacted during the 2017 Legislative Session can be found 

June 22, 2017 | Public School Funding and Policies Are Major Focus In Compromise Budget

Late Monday evening, the General Assembly released its compromise 2017-2019 spending plan. The budget has been granted full approval by the Senate and is set to gain final approval by the House later today. The budget spends $23 billion, a 3% spending increase over the previously enacted 2016-2017 budget. The budget provides over $9 billion in funding for K-12 schools, an increase of 3.5%. As reflected below, highlights of the budget include a new principal salary schedule, school personnel compensation increases, a $7 million central office allotment cut, the inclusion of a new school choice plan -- Education Savings Accounts -- and the elimination of retiree health benefits for new hires on or after January 1, 2021.  Read More


June 6, 2017 | House and Senate Announce Budget Conferees; Begin Contacts Now to Key Conferees 

As the House finalized and approved their 2017-2019 budget, the next step in the budget process is House and Senate budget negotiators to meet and negotiate a final 2017-2019 spending plan. The first step in that process occurred this week as both chambers appointed their budget conferees. Conferees have already started meeting this week with the goal of voting on a final spending plan by the end of the fiscal year on June 30, 2017. 
Download contact information for key budget negotiators, along with key budget differences and where NCASA stands on these issues as a guide for your discussions with your legislators.

June 2, 2017 | New Principal Pay Schedule, School Personnel Compensation Increases, Highlight House Budget

As of publication of this week’s In The Know, the House is scheduled to give approval to its 2017-2019 spending plan in two separate votes to occur later this evening and sometime Friday morning. Like the Senate, the House budget also spends $22.9 billion, a 2.5% spending increase over the previously enacted 2016-2017 budget. As reflected below, highlights of the House budget include a new principal salary schedule, school personnel compensation increases, a $5 million central office allotment cut, an increase of $80,000 in principal preparation grants, the inclusion of a school calendar flexibility pilot (as previously approved by the House), and no inclusion of the Senate’s budget provision of the newest school choice plan, Education Savings Accounts.
Compensation and Benefit highlights in the House’s budget include the following:  
Read More

​May 12, 2017 | Principals, Teachers, & School Personnel See Raises Under Senate Budget Proposal

The Senate approved a $22.9 billion dollar budget proposal this week, a 2.5% spending increase over the previously enacted 2016-2017 budget. Senate Bill 257provides an additional $600 million in K-12 spending under the Senate proposal. The budget proposal provides across the board increases for most state employees, including teachers, principals and school personnel. Although North Carolina’s projected revenue surplusgrew slightly last week to $580.5 million, some possible spending may have been offset by inclusion of the Senate’s tax plan in the budget which would reduce the personal income-tax rate from 5.499 percent to 5.35 percent while increasing the standard deduction.

Compensation and Benefit highlights in the Senate’s budget include the following
: Read More

March 16, 2017 | Senate Approves Legislation To Cap Income Tax At 5.5%

Adam Pridemore | NCASA - A proposal calling for a constitutional amendment which would lower North Carolina’s constitutional income tax rate cap from 10% down to 5.5% was approved by the Senate this week. The legislation, Senate Bill 75, is potentially problematic for public schools for the following reasons:

  • By limiting the ability to raise revenue to keep up with growing student populations, local communities may bear the burden of making up the revenue difference.

  • Certain sectors of the budget grow automatically, such as Medicaid and corrections, thus lawmakers may be more inclined to respond to a slow-down in revenue by cutting education spending.

  • Future General Assemblies will be limited in how to effectively respond to unexpected fiscal and economic circumstances.

  • Some lawmakers argue if they need additional revenue they can turn to sales taxes, however this is a more volatile revenue source.

Sec. 2 of Article V of the North Carolina Constitution currently provides the tax rate imposed on incomes cannot exceed 10%. The current tax rate on corporate income is 3%; it is anticipated the rate will fall to 3% for the 2017 taxable year. The current tax rate on personal income tax is 5.499%.

If approved by a three-fifths vote in each chamber of the General Assembly, the proposed amendment would be considered at the statewide general election to be held on November 6, 2018.

The bill now moves to the House for consideration.

To read more about this legislation, please click
here for an article by Raleigh’s News & Observer.

March 2, 2017 | Governor's Budget Calls For Significant Teacher Raises, Raises For All State Personnel

Adam Pridemore | NCASA - Governor Roy Cooper released his $22.2 billion recommended 2017-2019 budget this week, which contains a strong focus on public education.  The budget was reviewed in detail on Thursday morning during a presentation to the Joint House and Senate Appropriations Committee by State Budget Director Charlie Perusse. Perusse stated for the Committee that the top policy priority the Governor’s is to make North Carolina a top 10 educated state by 2025.

The Governor’s budget sets out to meet this policy goal in various ways, including compensation increases for school leaders, classroom teachers, and school personnel.  The Governor’s budget calls for pay increases for school-based administrators, teachers, and school personnel. The budget calls for $20 million a year to raise school-based administrator pay by an average of 6.5%, including an experience step. The budget aims to raise teacher pay by an average of 10% over the two year period. According to Perusse that would project North Carolina to lead the Southeast in teacher pay in the next 3 years, and at the national average in 5 years. The budget also provides teachers with a $150 stipend to offset money spent on classroom supplies. All other state funded school personnel would receive a 2% increase, or $800, whichever is greater.  All state personnel, excluding teachers and school-based administrators, would also receive a $500 bonus. Retirees would receive a one-time 1.5% Cost-of-Living increase.

The budget has other stated goals in its attempt to move North Carolina to a top 10 educated state by 2025.  Those goals include:

Increase enrollment of 4 year-olds in pre-kindergarten programs from 22% to 55%.
Improve high school graduation rate from 85.6% to 91%.
Increase the percentage of adults (over 25) with an associates degree or higher from 39% to 55%.The release of the Governor’s proposed budget is the first step in the building of the 2017-2019 state spending plan.

Other funding highlights found in the Governor’s budget include:

  • Average Daily Membership (ADM) Adjustments - $29.4M to adjust funding for multiple public school allotments that are allocated to schools based on average daily membership (ADM) to reflect the growth in student population.
  • More School-Based Personnel to Improve Student Outcomes - $20M to establish a flexible funding allotment for LEAs to hire additional school-based personnel who will have a direct impact on improving student outcomes including: assistant principals, nurses, behavioral support staff, teaching assistants, and other instructional personnel.
  • Textbooks and Digital Resources - $10M in nonrecurring lottery receipts and an additional $3M in recurring Indian Gaming receipts that LEAs may use for textbooks and digital resources. This brings total funding for textbooks and digital materials to $74.5M for each year of the biennium.
  • Advanced Teaching Roles and Student Outcomes Pilot - $9.8M nonrecurring lottery receipts to fund the Teacher Compensation and Advanced Teaching Roles pilot program established in Section 8.7 of SL 2016-94. Ten pilot LEAs will receive funds to develop advanced teaching roles, organizational models and compensation methods that link teacher performance, professional growth, and student outcomes to salary increases for classroom teachers.
  • Digital Learning-Professional Development - $5M to support digital learning professional development for teachers as part of the state's Digital Learning Plan (DLP). This funding ensures that all LEAs have access to the same training.
  • Digital Learning- Home Base Content and Support - $1M for DPI to procure, vet and make available high-quality digital content and lesson plans for teachers in Home Base as part of the State's Digital Learning Plan (DLP) for public schools. An additional $212,931 is also recommended for two positions at DPI to provide professional development and training on Home Base for LEAs across the state. Trainers will assist LEAs in their use of the various components of Home Base, including student information, instructional resources, assessment tools, data and analysis functions and educator effectiveness systems.
  • Transforming Low-Performing Schools - $10M funding for intensive planning and coaching support for teachers, principals, superintendents and central office staff in low-performing schools in order to improve student achievement.
  • NC Best and Brightest Program - $5M to establish a new forgivable loan program from lottery receipts to provide North Carolina's high achieving students the opportunity to earn undergraduate education degrees in exchange for a commitment to teach in a North Carolina public school. Scholarships of $10,000 per year for four years will be provided to cohorts of 500 students beginning with the 2018-19 academic year. Loan forgiven after 4 years of teaching in NC public school or 3 years teaching in a low-performing or low-wealth school

The Senate is now in the process of putting its proposed budget together, which is expected to be released sometime in mid-late April. The House will then build its own proposed budget and the House and Senate will work together to negotiate a final spending plan for the 2017-2019 fiscal years. 

February 23, 2017 | House Approves Legislation Creating Education Finance Reform Task Force

Adam Pridemore | NCASA - This week, the House approved legislation establishing the Joint Legislative Task Force on Education Finance Reform. The bill, House Bill 6, stems from recommendations made by the Joint Legislative Program Evaluation Oversight Committee based on a report late last year from the study of the K-12 allotment funding method North Carolina uses to fund public education. That report, which can be read in full here, states that issues specific to certain allotments, as well as the allotment system in general, adversely affect the distribution of K-12 resources. The report ultimately recommended either moving to a weighted student formula to fund the K-12 public education system, or reforming the current allotment system. The bill now heads to the Senate for consideration.

Last week in committee, the bill sponsor, Rep. Craig Horn (R-Union), ran an amendment allowing the Task Force to broaden its scope of study to allow the Task Force to study other funding methods, including reforming the current allotment system and reforming specific allotments, for elementary and secondary public schools, including public charter schools. A second amendment allowing for the appointment of four superintendents and two LEA financial officer as ex officio, non-voting members caused mass debate. At that time Rep. Horn asked the bill be held over to this week to determine the best course of action.

This week in committee, no amendment was run to add ex officio, non-voting members, with Rep. Horn commenting the Task Force can appoint an advisory council at a later time as it deems necessary. Amendments on the House floor to direct the Task Force membership be more inclusive of the political minority party, and reflect the geographic, urban/rural, cultural, and ethnic diversity of the State, failed on the House floor.

July 1, 2016  |  Compensation Increases For Teachers, School Administrators, and School Personnel Highlight Budget

Adam Pridemore |  NCASA - The General Assembly approved a $22.34 billion dollar negotiated budget this week, a 2.8% spending increase over the previously enacted 2016-2017 budget. The Senate gave its final approval to the budget on Wednesday, and the House gave its final approval Friday.

The budget is contained in
House Bill 1030 and provides an additional $313,930,959 million in K-12 spending, a 3.73% increase. The budget includes compensation increases for teachers, school-based administrators, and school personnel.  The budget also would expand the private school voucher program by $110 million over the next 10 years and makes cuts to the central office allotment.

NCASA government affairs staff, in conjunction with our members, were successful in pushing for resolution on the following key issues that are addressed in the final budget:

  • Ensuring there are across the board permanent salary increases for all school employees.
  • A three-year extension of the 15-point grading scale for school performance grades.
  • A 50% reduction in the central office cut from $5 million to $2.5 million.
  • The language defining year-round schools is not in the final budget.
  • The specific exclusion of superintendents from salary increases or bonuses is not in the final budget.

Unfortunately, funding for the private school voucher program, which NCASA opposes, was increased this year to $34.8 million dollars, along with a plan to create a voucher reserve which will grow to $134.8 million dollars over the next ten years.

Compensation and Benefit highlights include the following:

  • 4.7% average raise for teachers, which includes a step increase for educators earning a year of creditable experience. Teachers are not awarded any one-time bonuses under the final budget.
  • 1.5% salary increase for all school-based administrators. Step increase of 1.22% to eligible school-based administrators.  Principals and assistant principals will also receive a one-time bonus of 0.5%.
  • 1.5% compensation increase and a 0.5% bonus for all other permanent full-time State-funded LEA employees.
  • $17.2 million is allocated for merit-based bonuses for non-teaching LEA employees, with the process and amounts to be determined by local school boards. 
  • 1.6% cost-of-living increase for retirees of the Teachers’ and State Employees’ Retirement System. 
  • 16.12% employer contribution rate for retirement and a health benefit of $5,659 for all active employees who are not Medicare-eligible.

Funding highlights include the following:

  • $46.8 million in recurring funds to account for a net ADM increase of 5,875.  The total allotted public schools ADM for fiscal year 2016-2017 is 1,543,518.
  • $10 million in non-recurring funds for additional funding for textbooks and digital materials. This brings up the total appropriation for textbooks and digital materials to $71.5 million.
  • $10 million in non-recurring funds for a new 3rd Grade Reading Teacher Performance Pilot Program.  This program will provide bonuses to the top 25% of 3rd grade reading teachers statewide and the top 25% of 3rd grade reading teachers within each LEA based on each teacher’s EVAAS student growth index score for reading from the prior year. 
  • $5 million in recurring funds for the North Carolina Educational Endowment Fund. This fund supports teacher compensation that is directly related to improving student academic outcomes in the state’s public schools. 
  • $4 million in recurring funds, and $700,000 in non-recurring funds, to accelerate implementation of several components of the state’s Digital Learning Plan for public schools.
  • $3.5 million in recurring funds for the Principal Preparation Program which provides competitive grants for school leadership development, expanding available grant funding to $4 million.
  • $2.5 million in additional, non-recurring funds, for instructional materials, supplies and equipment. The revised appropriation for instructional supplies for 2016-2017 is $47 million.
  • $5.8 million in recurring funds to increase funding for Special Education Scholarships by 137%. 
  • $4.3 million in recurring funds for teacher bonuses for teachers of record for students inAdvanced Placement or International Baccalaureate courses and achieving a certain grade on the AP or IB examinations.
  • $600,000 in recurring funds to support a $25 or $50 bonus payment to teachers of record for students that complete a CTE class and pass a related examination leading to industry certifications and/or credentials. 
  • $2 million in non-recurring funds for At-Risk Student Supplemental Funding.  Makes $4.8 recurring cut to At-Risk Student Supplemental Funding.
  • $1.1 million for a new 3-year pilot program to support LEA efforts to create the organization structure and innovative compensation methods that would allow classroom teachers to take on advanced teaching roles.
  • $1 million in non-recurring funds for the UNC Teacher and Principal Preparation Program Lab School Administration.
  • $250,000 in non-recurring funds for updates to Online Licensure System to meet the requirements of Senate Bill 867, which requires fingerprint background checks for applicants seeking teacher licensure. 
  • $140,000 for State Board of Education Legal Services to provide support the additional requirements of Senate Bill 867, which requires fingerprint background checks for applicants seeking teacher licensure.
  • $500,000 in non-recurring funds for an evaluation of an Alternative Teacher Preparation Pilot
  • $126,000 in non-recurring funds for each LEA to send 1 AP teacher to participate in summer professional development institute
  • $112,500 in recurring funds for the Teacher Assistants Tuition Reimbursement Program, an initiative to provide tuition reimbursement of up to $4,500 annually for 25 teacher assistants in Anson, Franklin, Moore, Richmond, and Scotland Counties that are employed by those LEAs and are pursuing a college degree that will result in teacher licensure.
  • $ 1.3 million increase to NC Pre-K to serve an additional 260 children.
  • $1.3 million increase for the Child Care Subsidy to serve an additional 260 children.

Full funding highlights can be seen

A comparison chart, compiled by NCASA, of the Governor’s proposed budget, the budgets proposed by the House and Senate, and the final negotiated budget can be seen

In addition to funding changes for the 2016-2017 fiscal year, the budget contains a number of law and policy changes, called “special provisions.” Highlights of the special provisions included in the House budget are:

  • No Pay Loss For Break In Service Or For Teachers Who Become Principals -  Provides that a teacher who becomes an assistant principal be paid, on a monthly basis, at least as much as he or she would have earned as a teacher employed by that LEA, even if there is a break in service. Additionally, provides a teacher who becomes a principal be paid on a monthly basis, at least as much as he or she would earn as a teacher employed by that LEA
  • Joint Legislative Study Committee On School-Based Administrator Pay – Establishes a study committee to study and make recommendations on the following: 

          (1) The feasibility of revising the school-based administrator salary schedule, including principal and assistant principal pay, and whether revisions are                    needed.
          (2) The process of recruiting and retaining principals in North Carolina as  compared with the process of recruiting and retaining executives in other                          professions.
          (3) Strategies for recruiting and retaining the most qualified principals in low-performing and hard-to-staff schools.
          (4) Any other issue the Committee considers relevant to this study.

  • Opportunity Scholarship Program Forward Funding – Establishes the Opportunity Scholarship Grant Fund Reserve so that funds appropriated for scholarship grants in a fiscal year are awarded to students the following year.  Increases funds to the Reserve by at least $10 million each fiscal year over the next 10 years to bring funding for the voucher program to $134,840,000 by the 2026-2027 fiscal year.
  • Remediation Plan For Principals In Low-Performing Schools – Provides that a superintendent may recommend a principal be retained in the same position without a plan for remediation if the principal has been at the school for less than two years, or if the event the principal has been at the school two years or more, the school has both met student growth and has improved student achievement scores for the prior year.
  • Modify School Performance Grades –Extends the 15 point grading scale for school performance grade through the 2018-2019 school year.
  • NC Pre-K/Clarify Building Standards – Provides that public schools and private child care facilities operating prekindergarten classrooms meet the building standards for preschool students as provided in G.S. 115C-521.1, which provides the following:

          (1) Has at least one toilet and one sink for hand washing;
          (2) Meets kindergarten standards for overhead light fixtures;
          (3) Meets kindergarten standards for floors, walls, and ceilings; and
          (4) Has floors, walls, and ceilings that are free from mold, mildew, and lead hazards.
           A public school that voluntarily applies for a child care facility license shall meet all other requirements for child care facility licensure.”

  • Virtual Charter School Changes – Excludes certain students from counting against the mandated 25% withdrawal rate threshold imposed on virtual charter schools.
  • School Business System Modernization – Directs the State Board of Education to collaborate with the Friday Institute to develop a plan to modernize the systems used by the Department of Public Instruction, Financial and Business Services Division, to manage and deliver funds and technical support services to LEAs and charter schools.
  • K-3 Class Size Allotment Ratios – Provides for the funded class size allotment ratio for kindergarten through third grade be as follows:

          (1) For kindergarten, one teacher per 18 students.
          (2) For first grade, one teacher per 16 students.
          (3) For second grade, one teacher per 16 students.
          (4) For third grade, one teacher per 17 students.

  • School Notification Requirements/Teacher Employment/Licensure Changes and Beginning Teacher Support – Directs LEAs to notify the State Board of Education of any local testing to be administered to students by the LEA in its schools and the calendar for administering those tests.  Directs the State Board of Education to develop minimum criteria of relevant education or employment experience to qualify to contract as an adjunct instructor in each career and technical education career cluster.  Provides that licensure applications from an applicant with an out-of-state license be required to include evidence of that teacher’s effectiveness, when available, as measured by the evaluation system used in that applicant’s state of current licensure at the time of application, including any growth measures included in that evaluation system.  Applications with this information will be prioritized for review. Provides for beginning teacher evaluation requirements in for teachers in low-performing and all other schools.
  • UNC Teacher and Principal Preparation Program Lab School For K-8 Students – Directs each constituent institution of the University of North Carolina with an educator preparation program to establish a laboratory school to serve public school students. A laboratory school is defined as a public school that is (i) located in a LEA that has 25% or more of the schools located in the united identified as low-performing and (ii) serves students in kindergarten through eighth grade.  Provides that each institution operating a lab school incorporate best practices gained from State initiatives focused on leadership development for both teachers and principals in low-performing schools and LEAs. Provides that no student enrolled in a LEA unit to attend a lab school, and that any student located in the LEA with a lab school may attend. Provides additional details regarding academic program, creation of the lab school, evaluation and funding details. 
  • Modifications to Opportunity Scholarship Program – Expands eligibility to receive a private school voucher under the program to students previously enrolled in a Department of Defense Elementary and Secondary School located in North Carolina, and to students whose parent or legal guardian is on full-time duty status in the active uniformed service of the United States. Increases from 35% to 40% the percentage amount of vouchers which may be granted to first grade and kindergarten students.
  • Qualified Excess Benefit Arrangement – Eliminates previous sunset provision requiring members of Teachers’ and State Employees’ Retirement System to retire before August 1, 2016 to participate in the Qualified Excess Benefit Arrangement Plan, a plan that provides that member may receive all retirement benefits due above and beyond the limitations established in section 415(b) of the Internal Revenue Code.  Provides that no member of the Teachers’ and State Employees’ Retirement System who became a member of the Retirement System on or after January 1, 2015 is eligible to participate in the Qualified Excess Benefit Plan. Directs the Retirement System not to pay more retirement benefits to these members than allowed under the limitations of section 415(b) of the Internal Revenue Code. However, directs the last employer of any retiree who retires on or after August 1, 2016, and who receives any supplemental benefit payment under plan to reimburse QEBA in the amount of any supplemental benefit payment made to that retiree.
  • Teacher Compensation Models And Advanced Teaching Roles – Directs the State Board of Education to establish a three-year pilot program to develop advanced teaching roles and organizational models that link teacher performance and professional growth to salary increases in selected LEAs for classroom teachers.
  • Report For Schools For Students With Visual And Hearing Impairments/Foreign Exchange Students – Directs local superintendents to report by October 15 of each year the names and addresses of parents, guardians, or custodians of any hearing impaired or visually impaired children residing within their LEA to the directors of the Governor Morehead School for the Blind, the Eastern North Carolina School for the Deaf, North Carolina School for the Blind, and Department of Public Instruction. Provides provisions to comply with FERPA. 
  • K-12 Cybersecurity Study – Directs the Department of Public Instruction to conduct a study on cybersecurity in North Carolina public schools, including charter schools.
  • Pilot Program To Raise The High School Dropout Age From 16 to 18 – Directs the State Board of Education to authorize the Hickory Public Schools, Newton-Conover City Schools, and Rutherford County Schools to establish and implement a pilot program to increase the high school dropout age from 16 years of age to the completion of the school year coinciding with the calendar year in which a student reaches 18 years of age, unless the student has previously graduated from high school.
  • Local Board Report On School Start and Release Times - Directs each LEA to report to the State Board of Education on start and release times for each school in the LEA.

All special provisions included in the budget can be found
here, with most provisions impacting public education and employees being found in Section 8, Section 9 and Section 36. 

NCASA will have a more comprehensive budget summary in the coming weeks following adjournment of the 2016 legislative session.