STATE OF EDUCATION FUNDING
North Carolina
Fair school funding systems ensure that districts, schools, and ultimately students receive significant additional funding according to their specific needs. Providing high-quality learning opportunities for students living in poverty, English learners, students with disabilities, and rural students requires additional resources.
According to The Education Trust’s State of Funding Equity, in North Carolina:
- The highest poverty districts receive $615 or 6.4% more state and local revenue than the lowest poverty districts.
- The districts serving the most students of color receive $1,106 or 10% less state and local revenue per student than the districts serving the fewest students of color.
- The districts serving the most English learners receive $575 or 5.6% less state and local revenue per student than the districts serving the fewest English learners.
For more information about how these data compare with other states or district specific information, see The Education Trust’s State of Funding Equity report.
Learn more about
how North Carolina
funds students
According to EdBuild, “North Carolina has a hybrid funding formula incorporating both resource-based calculations and extensive program-based allocations. It determines the cost of delivering education in a district based on the cost of the resources, such as staff salaries and course materials, required to do so. It also allocates funding for a large number of programs and services for specific categories of students. The categories of students considered in North Carolina’s funding policy are students in specific grade levels, English-language learners, students in high-poverty districts, students with disabilities, students identified as gifted, students enrolled in career and technical education (CTE) programs, and students enrolled in small schools and districts.”
The Education Law Center’s 2023 Making the Grade Report rated North Carolina’s school funding:
- F on per-pupil funding relative to the national average.
- B on the percentage difference in per-pupil funding in high-poverty districts relative to low-poverty districts.
- F on the PK-12 funding as a percentage of state GDP.
How fair is North
Carolina’s Funding?
Using criteria developed based on research, best practice, and what we believe, we provide ratings for North Carolina’s school funding formula below. Our goal is for states to build a simplified, student-weighted funding formula guided by students’ different levels of need with the goals of eliminating achievement and opportunity gaps. We aim for states to create adequate, equitable, and transparent formulas that provide clear dollar allocations by assigning additional “weights” for students from low-income families, English learners, students with disabilities, and rural students.
For more on how we determined our ratings for North Carolina click here.
See our ratings across states, an explanation of the criteria we used to differentiate between state funding systems, and explanations of our specific state rankings here.
| Component | Description | Rating | Explanation |
|---|---|---|---|
| FUND STUDENTS ADEQUATELY | |||
| Funding Adequacy | Per student funding is at or above the national average ($16,645). | Red | Per student funding was $4,868 less than the national average in the 2021-22 school year. |
| Yearly Increases | Base funding for all students increases every year to account for inflation. | TBD | North Carolina does not have a per-student base amount and has not finalized its budget for the 2025-26 school year. |
| Progressive Tax Policies | The state maintains healthy revenue sources for schools. | Red | Multiple laws passed to further reduce income taxes. |
| FUND STUDENT NEEDS EQUITABLY | |||
| Student-Based Formula | The funding formula is primarily student-based. | Red | Primarily resource-based formula. |
| Students from Low-Income Backgrounds | The state provides additional funds for students from low-income backgrounds. | Red | No additional funding for individual students from low-income backgrounds. (see Concentrated Poverty) |
| English Learners | The state provides additional funds for English Learners. | Yellow | Additional funding is only provided for up to 10.6% of a district's students, regardless of students' actual learning needs. |
| Students with Disabilities | The state provides additional funds for students with disabilities, based on their needs. | Yellow | Additional funding is only provided for up to 13% of a district's students, and they all receive the same amount, regardless of the types of disabilities students have. |
| FUND DISTRICTS APPROPRIATELY | |||
| Cost Sharing | The state requires local governments to share the cost based on their ability to pay. | Red | Local governments are not required to contribute to instructional and operational costs. |
| Local Revenue Cap | The state limits wealthy districts from contributing excessively more than other districts. | Red | The state does not set a cap. |
| Rural Districts | Small districts and districts with few students per square mile ("sparse districts") receive additional funds. | Yellow | Additional funding for small districts based on teacher salary calculations. |
| Concentrated Poverty | Districts with high concentrations of poverty receive additional funds. | Yellow | Additional funding for districts with concentrated poverty to reduce class sizes. |
| FUND STUDENTS TRANSPARENTLY & EFFECTIVELY | |||
| Formula Transparency | The funding formula is easy to understand and clearly explained. | Red | The formula is complicated, and the state education department has not recently published a school funding guide. |
| Funding Data | The state shares detailed, timely, and user-friendly public data on districts’ funding. | Yellow | Data is detailed and is somewhat user-friendly. |
| District Spending Plans | The state requires districts to share public reports about how they invest funds to meet students' needs. | Yellow | Districts must publish annual expenditure reports in plain language, but they do not show how specific investments relate to student groups with additional funding. |
| Formula Review | The state requires a clear, stakeholder-led process to evaluate the formula and recommend improvements. | Red | No required review process. |
| FUND PUBLIC SCHOOLS EXCLUSIVELY | |||
| Vouchers | The state does not divert public funds to private schools through voucher programs, education savings accounts, or scholarship tax credits. | Red | The Opportunity Scholarship Program provides vouchers with universal eligibility and no accountability requirements. |
Who’s Who
in North Carolina
Legislature
The North Carolina General Assembly is the state legislature of North Carolina. The bicameral body is composed of the State House of Representatives with 120 members and the State Senate has 50 members. The House has separate standing committees on K-12 education, community colleges, and universities. The Senate has one standing committee on both Education and Higher Education. In 2024, the legislature will convene April 24, 2024 and adjourn no later than July 31, 2024.
State Superintendent of Education
The North Carolina State Superintendent of Public Instruction is the elected head of the North Carolina Department of Public Instruction. The Superintendent of Public Instruction oversees the department and the PK-12 public schools of North Carolina. The Superintendent is a member of the State Board of Education and the North Carolina Council of State.
State Board of Education
The North Carolina State Board of Education sets policy for public school systems in North Carolina. The State Board is composed of 13 members including the Lieutenant Governor, the Treasurer, and 11 members appointed by the governor. Appointed members serve eight-year terms representing the state’s eight education districts. The Superintendent of Public Instruction serves as the Secretary and Chief Administrative Officer of the board.
