Today, Carolina Journal Radio’s Donna Martinez talks with John Locke Foundation education policy analyst Terry Stoops, author of a new policy report showing how charter schools, private schools and home school students have actually saved North Carolina taxpayers almost $900 million in school building costs since the year 2000. (Go to http://www.carolinajournal.com/cjradio/ to find a station near you or to learn about the weekly CJ Radio podcast.)
Martinez: Nine hundred million dollars in construction savings. That is something. How did you come up with that figure?
Stoops: Well, the figure is derived from taking each county’s expenses, per student capital expenses, and seeing how much it would cost to add the additional charter, private and home school students in that county, and then to assess how much it would cost to provide upfront facilities for these students. So if we assume that all these students came into the school system, we would have to build buildings to accommodate them as well as to pay the yearly costs to maintain those buildings. And so my paper calculates those two and adds them together for each county in the state.
Martinez: Terry, in your report you say that the average county in the state saved about $9 million, but there were a number of counties — maybe five or six — that really made out in this deal. And they are some of the big counties. Let’s talk about those a little bit — for example Wake, Mecklenburg, and Guilford counties. How much money did those counties save?
Stoops: Mecklenburg County saved around $185 million since 2000. And according to the calculation, Wake only saved $100 million, and the reason for that discrepancy is that Wake’s estimate for how much money they would need to spend in 2000 over the next five years — between 2000-2005 — was off. So unfortunately my calculation really can’t compensate for a school system under-estimating how much it would cost for them to build schools between 2000-2005. So I would assume that Wake’s figure is probably closer to Mecklenburg’s than my report indicates, but around $100 million for Wake, $185 million for Charlotte-Mecklenburg.
Martinez: Also, Durham County, Forsyth County really made out as well.
Stoops: Yes, $40 million for Durham, $37 million for Forsyth, and Guilford came in at around $62 million. So certainly a lot of money there, and especially in a period where school construction costs were a lot lower, and I think that is a key point to make — that the dollar went a lot farther during the period between 2000-2006 than it would in the future because of the rise in school construction costs.
Martinez: Well Terry, this data seems pretty key, not only because it shows that for once there is a savings — that’s always good news to the taxpayer — but also, North Carolina is facing quite a burden, a financial burden, to try to provide seats for what is anticipated to be continued growth over the next five years. What are we facing in this state?
Stoops: Well, according to DPI [N.C. Department of Public Instruction] calculations, we have a need of $10 billion for facilities over the next five years. Every five years DPI comes up with a figure to calculate how much the state needs in capital to maintain its system of public schools. And last year it was found it was $10 billion over five years. And no amount of bonds, no amount of extra taxing authority for counties is going to do the trick in order to meet the demand that the state has for buildings and for school seats.
Martinez: Terry, the type of options that you’ve looked at in your calculation — private schools, public charter schools, home schools — those are all components of a choice system. Parents make a choice to opt out of the traditional public school system. One would think, based on your findings, that the state would take a look at this and perhaps want to encourage more parents to look at those options, strictly because there is a savings involved. What do you make of that? Is there any opportunity ahead for that, to have an endorsement [of choices] by the state?
Stoops: I don’t see that happening, but certainly the movement to raise the charter cap and the efforts to get a tax credit in the legislature for special needs students are all first steps in making sure our counties can provide the seats that they are obligated to provide. And so while there is no endorsement on the horizon, there is a movement towards making these things a reality.
Martinez: The issue of power and control always plays into this whenever we talk about these issues of who is in charge, and where does the money go, that type of thing.
Stoops: Absolutely.
Martinez: Terry, let’s talk about what is happening in Wake County because recently, there have been a number of news stories about the issue of building schools in Wake County, and the land acquisitions. Tell us what is going on there.
Stoops: Well, it was found that a few of the properties that Wake County was going to buy to build schools on were grossly more expensive than it would be for anyone else to buy. They were being charged, in some cases, double per acre to buy certain lands. And there were companies that were buying properties and turning around and selling them to the school system and making huge profits in a matter of days, flipping properties. And so we find that in Wake County as we look more and more it seems as if the school system has been buying properties at an inflated price.
Martinez: Wouldn’t they have to have an appraisal, Terry, to actually know what the market value of the land is?
Stoops: Well, no, they haven’t. There is no requirement for them to have appraisals, although there are systems — Charlotte-Mecklenburg for example requires appraisals — but Wake County did not, and it was only because of an appraisal [encouraged] by Representative [Paul] Stam [and others] that we even know that one of the Apex properties that Wake County was planning on buying was overpriced.
[Editor’s Note: Subsequent to this interview, Wake County changed its policy to require land appraisals on all prospective sites.]