Politics & Government

Could CMS, Mecklenburg avoid annual tensions with a funding formula?

Students move from east mobiles to the main building at Olympic High School on Friday, April 8, 2016.
Students move from east mobiles to the main building at Olympic High School on Friday, April 8, 2016. jsimmons@charlotteobserver.com

It has been a decade-long debate that keeps coming up.

Every year around budget time Mecklenburg County commissioners face a tough choice: How will they fund schools? This leads to often contentious debates between the commissioners and the school board. School boards don’t have their own taxing authority.

In the current budget, Charlotte-Mecklenburg Schools requested $425 million in county funding, a $23 million increase. But County Manager Dena Diorio’s recommended budget includes a $11.3 million increase, which was not changed during a commissioners’ straw vote Tuesday.

County Commissioner Jim Puckett wants to change the process to make it fairer and less contentious. He argues that using a predetermined formula would be a better way to determine school funding. This isn’t a new concept. Other counties, like Brunswick County, have been using formulas for the past two decades.

Under formula funding, the school district usually gets a set percentage of the county’s tax income each year.

Currently, the Charlotte-Mecklenburg school board makes a request each year to the county for local dollars. Typically, CMS gets far less than it requested.

“Why do we go through these hoops when we end up in the same spot every year?” Puckett said.

CMS, like other North Carolina school districts, relies on a mix of local, state and federal funding. For 2014-15, CMS received about $5,066 per student from the state. The county gave $2,326.

As of 2013, 15 counties used a formula system instead of an annual back and forth, according to the North Carolina Center for County Commissioners. At least one county has since dropped the formula system in favor of annual appropriation discussions, said Linda Millsaps, research director at the center.

“There has been a shift of responsibility for local governments to pay for public education,” said Matt Ellinwood, director of the North Carolina Justice Center’s education and law project.

David Sciarra, the executive director of the New Jersey-based Education Law Center, said that formulas can be in response to a lack of available money for schools.

In Mecklenburg, property tax rates did not increase last year and are not scheduled to rise in the coming year. Sciarra says this can cause a discrepancy between the school system’s needs and the commissioners’ ability to pay the costs.

“I am not sure formulas are going to solve any problems,” Sciarra said.

Formulas in practice

In North Carolina, no counties similar in size to Mecklenburg are using a formula system. Brunswick County, a coastal district that’s less than one-tenth the size of CMS, has been using funding formulas since 1996.

Like Mecklenburg, Brunswick is undergoing large population and economic growth. From 2010 to 2015, Brunswick saw a 14.3 percent increase in population.

Brunswick County Manager Ann Hardy said that the system has worked well in her county. She said the commissioners and school board have representatives who meet regularly.

The budget is largely based off the expected tax revenue for the county in the upcoming fiscal year, so that means the schools budget depends on the health of the local economy. The formula is around 36 percent of the tax income after debts.

“When the county is doing well, we are doing well,” said Freyja Cahill, the executive finance officer at Brunswick County Schools. The formula is revisited every few years to ensure it is working properly, but generally remains stable.

Cahill said this formula can lead to school district getting more money than it needs. Those extra dollars are then invested to build new facilities or saved for later projects.

Brunswick spends on average $2,671 per student, compared with Charlotte-Mecklenburg’s $2,326 per student.

Brunswick school board member John Thompson says that while the formula is a good start, he believes that the ultimate deciding factor should be the schools’ displayed need. He said that during the recession, the schools often went underfunded.

“It was a tough time for us,” he said.

At the moment, a move to formulas seems unlikely in Mecklenburg. Such a system faces criticism from other commissioners and school board members, who worry the equation would not reflect year-to-year changes within the schools.

“I wasn’t elected to decide a formula for funding. I was elected to use my brain,” Commissioner Dumont Clarke said.

Tyler Fleming; 704-358-5355, @tyler_fleming96