Horner’s Rural Route By Bill Horner Rural Route is a Business North Carolina column authored by veteran journalist Bill Horner. He focuses on key issues in less populated parts of the state.
Over the years, as he’s worked through the labyrinthine process by which North Carolina funds public schools, Don Phipps updates a “Budget 101” slide deck he created to show his local funders — namely, Caldwell County commissioners — how it all works.
One slide includes a warning. “This information,” it reads, “changes frequently.”
Running (and paying for) rural systems are vexing enough for superintendents like Phipps, who leads the public schools in the northwest N.C. county. And especially arduous when schools are under fire, teacher turnover is high and many of North Carolina’s education metrics, including teacher pay and student funding, rank low compared with most states.
So toss into the mix the expanded Opportunity Scholarships voucher program, which dangles hundreds of millions of dollars in the faces of parents curious to explore private school options.
“It just makes it very difficult,” Phipps, now in his 16th year as a superintendent, told me. “I really like the idea of parents having a choice, but the problem I’ve got with the choice model in North Carolina is it’s not fair to us. We should be on a level playing field, but the fact is
we’re not.”
Funding increasing, enrollment dropping
In Caldwell, like the rest of N.C., state funds allocated to public schools have risen steadily over time. Meanwhile, public school enrollment has been declining including a 19% drop in Caldwell over the past 15 years. About 75% of N.C. K-12 students attend public schools statewide now, versus 86.5% in 2010.
Supporters of Opportunity Scholarships cite that shift in arguments for school choice. Why shouldn’t the state ease the financial burden on taxpaying parents exploring private education?
In 2024, lawmakers removed income caps for parents and prior public school attendance requirements and flooded the voucher program with new money. An annual outlay of $10.8 million a decade ago grew to $432 million last year. Appropriations will reach more than $825 million annually by 2032-33.
For its part, the General Assembly spent almost $12 billion on public K-12 schools last year. (N.C. counties supplement that by varying amounts.) So why ask for even more when state appropriations are up?
Because, the real value of state funding increases has been outpaced by rising fixed costs and inflation, say the rural superintendents and voucher opponents with whom I spoke. The loss of enrollment (and subsequent reduction coming from total per-pupil funding) makes budgeting even more troublesome. Phipps, pressing for more state and local funds, would love a slice of that voucher money, much benefiting families already paying to send their children to private schools.
‘A finite amount of money’
In rural counties, it’s typically more difficult to generate additional tax revenues for higher local appropriations. For this school year, Phipps requested $447,399 in additional salaries and supplements and another $200,000 for increased utility rates. For the sixth time in the past seven years, Caldwell’s commissioners said “no.” Meaning: the county’s appropriation was $14.7 million back in 2014-15, and has been mostly stuck at $14.8 million since 2016-17, two years before he became superintendent there.
“I show them what the personnel costs are,” says Phipps, who was named the N.C, Superintendent of the Year in 2023. “I show them how our retirement expense has increased, what hospitalization [insurance] costs are … So the dollars they gave us back in 2016 just don’t go nearly as far in 2025. I know they’ve got a finite amount of money, and they’ve got a lot of folks coming to the table with their hands out…”
Public schools in North Carolina are funded with state, local and federal tax revenues, with a small portion of operating budgets assisted by a variety of grant sources. The state’s portion — 70% in Caldwell, which includes special supplemental dollars earmarked for small and low wealth schools — is the biggest chunk, followed by local (16%) and federal (9%) money. Of those funds, the vast majority — 86% in Caldwell — is spent on salaries and benefits.
Phipps faces the double whammy of being hamstrung on boosting teacher pay while seeing Caldwell ranked near the bottom for local funding. A couple of years ago, a commissioner asked him what it would take to make Caldwell “average” in that ranking.
“My question to him was, ‘Do we aspire to be average?’” Phipps says. “And then I thought, I probably shouldn’t say that to a commissioner, because if you’re 94th and get to 50th, you’re doing a really good job.” Phipps then calculated it would take an additional $8 million per year, a staggering 54% increase over the current $14.8 million.
“That’s an annual increase of $8 million from the county commissioners, and there’s no way we’re going to do that,” he told me. “And that just puts us at 50th out of 100.”
Money and other casualties
Caldwell County only has two private schools with 167 students as of 2023-24, according to state data. But funding pressures have prompted the public system to eliminate 185 positions and shutter two schools during his time there. Phipps explains that when students move from a public school to private one, the public school can’t conveniently eliminate teacher positions across grades. Lose a few kids in each grade, and you lose per-pupil funding tied to enrollment — but expenses don’t necessarily change.
“You’re still employing basically the same number of teachers,” Phipps says. “We still have to run air conditioning and heat, and run buses.”
Casualties follow. Dollars are stretched, maintenance gets deferred; assistant principals and teaching assistants and summer school programs for struggling students are eliminated. Curriculum updates get put on hold. Phipps saves where he can without sacrificing quality, he says, resorting to strategies such as creating tiered bus routes — which put elementary students on the same buses as high schoolers.
“It’s not what we want,” he says.
Mike Long, the president of Parents for Educational Freedom in North Carolina, argues voucher programs are part of sorely needed education reform.
“Since 1980, with the creation of the U.S. Department of Education, over $3 billion has been spent on ‘education,’ and it hasn’t improved one test score — not one,” he told me. “If you ask me what I’d do, I would do everything I could to get the federal government and state government out of public education and let each educational district use those dollars to meet the needs of those children.”
Hard to compete
Phipps isn’t opposed to school choice. As with each superintendent I spoke to, he simply objects to North Carolina’s voucher model. He has the ear of his board’s attorney, N.C. House Speaker Destin Hall, who represents Caldwell and Watauga counties in the legislature.
Phipps argues that if a school receives state money, “if they’re church, private, charter, whatever, they ought to have to follow the same rules that we have, and then we’d be on a level playing field,” Phipps said. “But the fact is, we’re not, and it’s hard for me to be able to compete against somebody who plays by a different set of rules than we do.” He cites minimal private school requirements for teacher credentials, curriculum or reporting on student performance.
In Wilson County, where 1,504 students, or about 10%, attended private schools last year, Superintendent Lane Mills attributes “the required rigor, the targets, the criteria … the demands placed on instructional time” as stressors public schools face — plus expenses such as lunches and transportation that most private schools don’t provide.
“We’re trying to do everything at once, and you get one chance to do it,” he says. “I tell my staff, ‘Everybody says, OK, good, let’s start with perfect and let’s get better from there.’ That’s the expectation.”
Mills, too, has heard the arguments from voucher supporters that more money won’t solve what’s wrong in public schools.
“Well, we’ve never tried it,” Mills says. “It’s unrealistic to think we’re doing right by our educators. They can’t afford to buy a home in the areas where they’re teaching … I think it’s really hard for them to articulate that because we’ve never been fully funded. We’ve got to at least try it, just once.”■
