Spotlight On: North Carolina’s Allotment Approach and How Teacher Sorting Affects Funding Fairness

Spotlight On: North Carolina’s Allotment Approach and How Teacher Sorting Affects Funding Fairness

In North Carolina, the state allots teaching positions to each school district based on the number of students in each grade, according to specific ratios set by the General Assembly. The classroom teacher allotment is by far the largest single state allotment: salary and benefits for teaching positions represents approximately 55% of total state support for education.

What is unique about this approach is that the largest state education resource allocation is made in the form of positions, not dollars. This personnel-based allotment model was intended to give districts and principals more hiring flexibility, allowing them to have a ‘budget blind’ hiring process. In other words, a school or district can hire any qualified candidate, regardless of where he or she fall on the salary schedule.

While well-intended, a recent NC Program Evaluation Division (PED) report and several other studies have found that this approach deprives high-poverty schools and systems from funding resources, as well as highly-effective teachers. This phenomenon is called “Teacher Sorting.”

The financial impact of teacher sorting can be significant and has its greatest negative impact on low-wealth schools and districts. The figure below shows the disparity between the districts with the highest and lowest average teacher compensation. In this scenario, District B receives $649 less funding per student because their average teacher has less experience and is not Board Certified. If districts A and B each have 10,000 students, the funding differences between the districts is $6,490,000.