HORIZONTAL FUNDING EQUITY IN NORTH CAROLINA PUBLIC SCHOOLS, 2012-2022

This study examined horizontal fiscal equity in North Carolina’s public school funding system from 2012 to 2022, expanding on previous research by Rolle et al. (2008) for the 1996–2006 decade. The research assessed whether the state’s school funding mechanism aligns with its constitutional obligation to provide a "sound basic education" for all students, as established in Leandro v. State (1997). Using statistical measures of horizontal fiscal equity, this study evaluates per-pupil expenditures at the local, state, and federal levels, providing a longitudinal comparison of funding disparities over time.
Findings indicated persistent and, in some cases, worsening inequities in school funding across North Carolina districts. Local per-pupil expenditures exhibited stagnation and decline in real-dollar terms, particularly during the COVID-19 pandemic, contributing to increasing disparities. While state per-pupil expenditures grew moderately, measures such as the range, standard deviation, and coefficient of variation suggest that funding inequities persisted and, in some cases, expanded. The analysis of combined local and state per-pupil expenditures revealed continued funding increases, yet disparities remained evident, particularly in lower-wealth districts. Total per-pupil expenditures, including federal funding, showed modest increases, yet gaps between high- and low-poverty districts persisted, reinforcing concerns regarding the adequacy and fairness of North Carolina’s school finance system.
Despite legal mandates and increased investment, North Carolina’s school finance system continues to exhibit inequities, particularly for districts with high concentrations of economically disadvantaged students. While some progress has been made in funding distribution, challenges in ensuring equitable access to resources remain. The findings underscored the need for policy reforms aimed at revising the state’s funding model, increasing targeted investments in high-needs student populations, and improving the overall efficiency of resource allocation. Future research should explore broader fiscal capacity, revenue equalization, and policy impact assessments to further understand and address systemic inequities in school funding.