BY

DR. MATTHEW LADNERSENIOR ADVISOR FOR POLICY AND RESEARCH, FOUNDATION FOR EXCELLENCE IN EDUCATION

RECORD BREAKING HEATWAVE

BABY BOOMER RETIREMENT, STUDENT ENROLLMENT GROWTH AND THE FUTURE OF NORTH CAROLINA EDUCATION

APRIL 2016

AGE DEPENDENCY RATIO 2010 VS 2030

NORTH CAROLINA+1775%

58%

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Cover: Between 2010-2030, the Age Dependancy Ratio*

in North Carolina is projected to grow by 17 percent.

*The age dependency ratio is derived by dividing the combined

under 18 and 65-and-over populations by the 18-to-64 population

and multiplying by 100.

About ExcelinEd Founded by former Florida Governor Jeb Bush, the

Foundation for Excellence in Education (ExcelinEd) is igniting

a movement of reform, state by state, to transform education

for the 21st century economy by working with lawmakers,

policymakers, educators and parents to advance education

reform across America.

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America is witnessing profound changes in the age makeup of its population. Put simply, there are more

grandparents and grandchildren, with fewer people in between.

What does that mean for North Carolina?

It means there will be increased demands on the state to cover expenses such as Medicaid, government pensions,

senior services and education. And there will be a disproportionately smaller number of working taxpayers to

cover the costs.

In other words, the same grandparents who relentlessly spoil their grandchildren will, knowingly or not, be

competing with them for scarce tax revenues in legislative budget hearings for the foreseeable future.

To support both the young and elderly, the working-age North Carolinians of the future who are sitting in today’s

classrooms, must be educated, skilled, efficient and innovative. How well their schools prepare them for the

challenges ahead will determine North Carolina’s fate.

In the past, North Carolina made substantial progress in advancing student achievement, yet that improvement

has stalled. Today too many teenagers are leaving school unprepared for college or a high-paying career. Their

potential is limited, not by innate ability, but by the ability of schools to fully tap into it.

This analysis not only contains new research on the demographic challenges facing North Carolina, but also

strategies for substantially improve the academic quality of the state’s K-12 schools at a price taxpayers can

afford. From expanding high-quality charter schools to investing in the college and career success of high

students, North Carolina needs bold and innovative changes now.

I hope you will take the time to read and fully digest this information. And then I strongly encourage you to act with

urgency. As always, we are here to assist in whatever way possible.

FOREWORD

Patricia LevesqueCEO, Foundation for Excellence in Education

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CONTENTS

01 ALERT: HEAT ADVISORY

01 RISING TEMPERATURES IMMINENT IN NORTH CAROLINA

02 INCREASED HEAT INDEX BY 2030: NORTH CAROLINA’S CHANGING AGE DEMOGRAPHY

05 PARENTAL CHOICE COOLS DISTRICT OVERCROWDING

06 DEAD HEAT: NORTH CAROLINA’S RACE TO SERVE ITS NEW POPULATION

06 THE NORTH CAROLINA BUDGET AND UNCLE SAM’S BALANCE SHEET

06 STATE HEALTH CARE SPENDING AND THE ELDERLY

09 NORTH CAROLINA’S SCORES SURGED BUT STALLED AFTER 2003

10 CHARTER SCHOOL SUCCESS IN NORTH CAROLINA

13 BEATING THE HEAT: INCREASING K-12 OPPORTUNITIES INSIDE & OUTSIDE OF THE DISTRICTS

13 EXPANDED PARENTAL OPTIONS

14 INCENTIVE FUNDING

16 CONCLUSION: INNOVATION NEEDED FOR CONTINUED SUCCESS

17 SOURCES

20 ABOUT THE AUTHOR

01

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RISING TEMPERATURES IMMINENT IN NORTH CAROLINAThe baby boom generation, a huge cohort of 76 million Americans born between 1945 and 1964, has long set cultural and political trends, but their retirement may make the biggest splash of all.1 The first baby boomers became eligible for federal early retirement (Social Security and Medicare) benefits in 2008. Until the year 2030, an average of American 10,000 baby boomers per day will reach the age of 65. By 2030, all surviving baby boomers will have reached 65 years or older.

Known as “The Gray Tsunami” or “Hurricane Gray,” the retirement of the baby boom generation will represent an unprecedented challenge to the American public services.2 The nation as a whole will be impacted by this change, and North Carolina will experience more of a direct impact than the national average. Age demographic change will have a large impact on public life and will require an update of the American social welfare state.3

ALERT: HEAT ADVISORY

Over the next 15 years, North Carolina’s baby boomers will retire and send their grandchildren off to school. By 2030, the United States Census Bureau projects North Carolina’s percentage of elderly residents to closely resemble that of contemporary Florida. Simultaneously, the Census Bureau projects North Carolina to add hundreds of thousands of school aged children.4

Broadly speaking, the elderly utilize public health spending at disproportionate rates while the young utilize K-12 education spending. The North Carolina budget spends the single highest percentage on Medicaid, and the next largest on K-12 education.5

The concurrent increasing of both elderly and young people occurring simultaneously seems certain to require the reimagining of both health and education delivery. Moreover, this is a process that needs to develop sooner rather than later.

Others are noticing these trends and the important implications for state policies. Ronald Brownstein

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has written a series of provocative National Journal articles about American demographic change and inter-generational conflict under the theme of the “Brown and the Gray.” He describes the two massive generations: old and predominantly white baby boomers and older vs. young and much more ethnically diverse as two tectonic plates. The plates collide, building seismic pressure.6 North Carolina will see increasing intergenerational seismic pressure. The brown and gray generations see the world differently, and will have different funding priorities for state government. In a scenario where societal needs grow while resources remain relatively scarce, this could devolve into a battle between the old and the young, into health care versus education.

Much of North Carolina’s working-age population in the year 2030—when increases in elderly and young populations will spike—sits in the state’s classrooms right now. Today’s students will find themselves as the working-age taxpayers responsible for a larger number of elderly and young residents requiring vital services—health care for the elderly and K-12 and public universities for the young. It would be in the best interest of the state to ensure as many of these students as possible are numerate, literate and otherwise prepared to exercise the responsibilities of citizenship.

Fortunately, North Carolina has a track record of improving educational results over the last 20 years, from adopting A-F grading to implementing the North Carolina Read to Achieve program. Students, educators and policymakers should continue to accelerate the pace of this improvement to ensure that North Carolina survives and thrives in the arduous years ahead. Growth and innovation in education represent by far the most amenable strategy for thriving and surviving in a state that will simultaneously grow younger and more elderly.

INCREASED HEAT INDEX BY 2030: NORTH CAROLINA’S CHANGING AGE DEMOGRAPHYNorth Carolina faces a tough transition over the next 15 years. Between people moving into the state and North Carolina’s resident baby boom population aging, the Census Bureau projects the state’s elderly population will more than double between 2010 and 2030, increasing by 1,012,009 people.7 The growth in the elderly population has a variety of public policy implications—especially in terms of economic growth and state health care expenses.

1,740,347

1,623,694

1,374,754

1,161,164

1,864,450 1,618,578

2,005,748 1,897,902

2,183,119 2,173,173

AGE DEPENDENCY RATIO*

( 2010 VS 2030 )

Age dependency ratios serve as a measure of societal strain because both younger and older people utilize public services for education and health care. Essentially, it is a measure of the number of people riding in the cart compared to the number pushing the cart.

Economists have found dependency ratios to be predictive of economic growth. When ratios are high, you have a high percentage of people out of the work force and a relatively small percentage of people trying to cover the costs of their education, retirement and health care.

*The age dependency ratio is derived by dividing the

combined under 18 and 65-and-over populations by

the 18-to-64 population and multiplying by 100.

GROWTH OF SCHOOL-AGED AND ELDERLY POPULATIONSThe 5-17 population grouping available from Census data most closely approximates the public school population. It is clear a massive influx of new students is on the way. Coupled with the vast increase in the elderly population, state policymakers should expect to wrestle with increased demand for public education and health care spending compounded by slower tax revenue growth.

2010

2015

2020

2025

2030

APPROX. SCHOOL-AGED POP. (Age 5-17)

ELDERLY POP.(Age 65+)

NORTH CAROLINA+1775%

58%

U.S. Census Bureau Projected Growth of North Carolina’s Youth & Elderly Populations

U.S. CENSUS BUREAU, POPULATION DIVISION, INTERIM STATE POPULATION PROJECTIONS, 2005

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Simultaneous to the growth in the elderly population, projections also foresee an increase of 559,425 children in North Carolina’s youth population.8 The young and the old generate per-person tax revenues below the statewide average and generate above-average costs to the state budget. Put differently, the working-age population at any given point in time bears most of the tax burden for services to the young and old. North Carolina, along with the rest of the nation, faces an especially challenging future.

We can predict the coming societal strain caused by shifting age demography through what demographers and economists call “total age dependency ratios.” To calculate a state or nation’s total age dependency ratio, you add the number of people aged 65 and older to those below the age of 18, and divide by the number of 18-64 year old residents. The basic concept is that elderly and the young consume state services at a higher rate, while working-aged people generate the tax revenue to provide vital state services like health care and education.

Broadly speaking, one can think of a total age dependency ratio as the number of people riding in society’s cart based upon age compared to every 100 people pushing the cart. This is not to say that every

person over the age of 65 is “dependent” or anything of the sort. Demographers look at these figures broadly rather than deterministically.

Generally, a low age dependency ratio entails many working-age people and relatively few young/elderly people. Not surprisingly, this translates to faster rates of economic growth. Conversely, a high total age dependency ratio translates to fewer working-age people supporting services for a larger number of young and elderly people.9

In the 1980s and the 1990s, the baby boom generation tended to be in their prime earning years, making lots of money and paying lots of taxes. Because the baby boom had turned to baby bust in the 1960s, there were more adults paying taxes per children attending school in the past. The size of the elderly population had been much smaller in the past than what looms in the future. North Carolina had one of the lower state total age dependency ratios in 2010, but it will increase year by year.10

The United States Census Bureau projects North Carolina’s total age dependency ratio to increase from 58 percent in 2010 to 75 percent in 2030.11

1,740,347

1,623,694

1,374,754

1,161,164

1,864,450 1,618,578

2,005,748 1,897,902

2,183,119 2,173,173

AGE DEPENDENCY RATIO*

( 2010 VS 2030 )

Age dependency ratios serve as a measure of societal strain because both younger and older people utilize public services for education and health care. Essentially, it is a measure of the number of people riding in the cart compared to the number pushing the cart.

Economists have found dependency ratios to be predictive of economic growth. When ratios are high, you have a high percentage of people out of the work force and a relatively small percentage of people trying to cover the costs of their education, retirement and health care.

*The age dependency ratio is derived by dividing the

combined under 18 and 65-and-over populations by

the 18-to-64 population and multiplying by 100.

GROWTH OF SCHOOL-AGED AND ELDERLY POPULATIONSThe 5-17 population grouping available from Census data most closely approximates the public school population. It is clear a massive influx of new students is on the way. Coupled with the vast increase in the elderly population, state policymakers should expect to wrestle with increased demand for public education and health care spending compounded by slower tax revenue growth.

2010

2015

2020

2025

2030

APPROX. SCHOOL-AGED POP. (Age 5-17)

ELDERLY POP.(Age 65+)

NORTH CAROLINA+1775%

58%

AUTHOR CALCULATION USING U.S. CENSUS BUREAU, POPULATION DIVISION, INTERIM STATE POPULATION PROJECTIONS, 2005

* The age dependency ratio

is derived by dividing the

combined under 18 and

65-and-over populations

by the 18-to-64 population

and multiplying by 100.

North Carolina Age Dependency Ratio* (2010 vs 2030)

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In 2010, for every 100 working-age people, North Carolina had 58 people under 18 and over 65. In 2030, the Census Bureau projects that North Carolina will have 75 young/old for every 100 working-age people. However, the North Carolina Office of State Budget and Management developed a separate set of estimates for North Carolina’s age demography. The Office of State Budget and Management foresees a larger increase in elderly residents than the Census Bureau, and a smaller increase in the youth population. The figure above presents the Office of State Budget and Management projections.

Under the Office of State Budget and Management projections, North Carolina’s total age dependency ratio moves to 68 percent in 2030.12 Assumptions regarding a variety of factors (birth and death rates, domestic migration, foreign immigration) drive the projections, and in the end we have little alternative but to wait and see which projection proves more accurate. The Census Bureau has a strong overall track record and the Office of State Budget and Management has more recent information than the Census Bureau possessed when it created its projections in 2005. Ultimately only time will tell.

We find the largest difference between the Census Bureau and Office of State Budget and Management projections at the youth level. The Census Bureau has released some more recent age population estimates based upon the 2010 Census. The Census Bureau for instance believed that North Carolina had 1,680,073 residents aged 5-17 in 2014.13 This figure is close to the Office of State Budget and Management estimate for 5-17 year olds in 2025.14

The United States Department of Education has a different set of estimates published in 2015 for North Carolina’s public school population stretching out to 2024. Note that estimates for public school enrollments vary substantially from those of the number of 5-17 year olds for a variety of reasons, including the fact that many 18 year olds still attend K-12 schools and children with special needs sometimes attend public schools before age 5 and until age 21. Nevertheless, the Department of Education estimates foresee an increase of over 170,000 students by 2024.15

North Carolina Office of State Budget and Management Projected Growth of North Carolina Youth (5-17) and Elderly (65+) Population

NORTH CAROLINA OFFICE OF STATE BUDGET AND MANAGEMENT, PROJECTED COUNTY TOTALS – STANDARD AGE GROUPS, 2015

1,700,767

1,653,922

1,506,953

1,243,888

1,700,951 1,778,807

1,691,266 2,061,814

1,709,697 2,314,988

2010

2015

2020

2025

2030

APPROX. SCHOOL-AGED POP. (Age 5-17)

ELDERLY POP.(Age 65+)

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Uncertainty regarding the size of the student population reinforces the desirability of allowing for K-12 education options that provide seats without public investment in new school facilities. The Census Bureau and the Office of State Budget and Management both foresee large increases in North Carolina’s elderly population. This will not only impact North Carolina’s budget directly, but seems likely to impact it indirectly through the federal government, as discussed in the next section.

PARENTAL CHOICE COOLS DISTRICT OVERCROWDINGIf the Census Bureau scenario plays out and North Carolina has an additional 550,000 5-17 year old residents to educate (or anything remotely close to it), taxpayers will be financially hard pressed to build new district school space. Home schooling, charter schools and private choice programs can all serve as a pressure relief valve in a high student-growth scenario as the legislature faces the challenge of increasing pressure for additional health care spending.

Indeed there is evidence from news reports on individual North Carolina districts that the pressure relief dynamic has already begun. The Dec. 8, 2015 edition of the News & Observer reported that while North Carolina’s Wake County school system added 3,880 students over the past two years, the growth has been 1,000 students fewer than projected for each of those years due to the growing popularity of charter schools, home schooling and school vouchers. The News & Observer noted that the growth of alternatives to traditional public schools has accelerated in the past few years since North Carolina’s General Assembly lifted a cap on the number of charter schools and provided vouchers for students to attend private schools under the Opportunity Scholarship Program.

The News & Observer also quoted new Wake County school board chairman Tom Benton pledging that his district would rise to the challenge in competing for students. “In the past, public schools could assign students to wherever they wanted to because parents couldn’t make a choice to leave the public schools,” Benton said. “Now we’re trying to make every school a choice of high quality so that parents don’t want to leave.”16 This sentiment sits comfortably with a large amount of empirical research showing improved public school outcomes in schools facing increased competition.17

For our current purposes, we move forward with the assumption that something in between the Office of State Budget and Management projections and the Census Bureau projections will likely occur, with North Carolina’s total age dependency ratio falling somewhere between 68 percent and 78 percent, up from 58 percent in 2010. The fact that both forecasts foresee large increases in the elderly population will create public funding challenges.

The Census and Office of State Budget and Management projections contain large differences in the scale of the increase in youth population. The experience on the ground suggests continued enrollment growth that is only partially offset by current choice and charter laws. Under normal circumstances this might seem quite satisfactory. Given the aging of the population, normal circumstances may be in short supply in the North Carolina budget process.

United States Department of Education Projections on North Carolina Public School Population, 2013-2024

Public School

PopulationSchool

Year

Fall 2013 1,530,600Fall 2014 1,538,600Fall 2015 1,546,800Fall 2016 1,555,100Fall 2020 1,617,500

Fall 2024 1,717,900

1,530,6001,538,6001,546,8001,555,100

1,617,500

1,717,900

2013 2014 2015 2016 2020 2024School Year (Fall)

Public School

Population

UNITED STATES DEPARTMENT OF EDUCATION, NATIONAL CENTER

FOR EDUCATION STATISTICS, DIGEST OF EDUCATION STATISTICS

TABLE 203.20, 2015

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THE NORTH CAROLINA BUDGET AND UNCLE SAM’S BALANCE SHEETThe federal government provides over 30 percent of the total funding by state governments nationwide in the form of matching and categorical grants. In Fiscal Year 2014, 31.5 percent of the funds spent by the North Carolina budget came from federal funds.18 Needless to say, North Carolinians pay federal taxes and thus participate in joint federal/state spending initiatives like all other states. The ability of the state to maintain current levels of spending, however, would be impacted by a tightening of federal spending absent a substantial increase in state taxes. The looming retirement of the baby boom generation raises large questions regarding the ability of the federal government to maintain state spending programs.

The federal government currently carries $16 trillion in debt and has unfunded entitlement liabilities of $55 trillion, according to estimates from the Office of Management and Budget and the United States Department of Treasury, respectively.19 Ten thousand baby boomers a day reaching retirement age raises substantial uncertainty regarding the stability of federal funding in the provision of vital state services such as education and health.20

How the federal government will manage an ever-growing cohort of individuals eligible to draw upon Medicare and Social Security looms large over most

discussions of American age demography. It remains an open question of how long the federal government will maintain financial assistance for major state spending initiatives. Lawmakers would be prudent to expect a diminished ability for Uncle Sam to maintain the current level of state spending.

Exactly how the federal budget drama plays out is both uncertain, and beyond the scope of the present paper. The looming need for the federal government to balance expenditures, spending, taxes and commitments alone should be enough to spur North Carolina policymakers to seek policy innovation. These same age demographic forces plaguing the federal government will independently impact North Carolina. Even if the federal government were able to maintain current levels of financial aid to states, North Carolina would still face increasing challenges in the form of decreased state revenue and increased demand for health care and education services.

STATE HEALTH CARE SPENDING AND THE ELDERLYThe tension between health and education spending has already been playing out in North Carolina’s annual budget battles, and health care spending has been squeezing out a great deal of other spending in advance of Hurricane Gray. Medicaid became the single largest spending program in most state budgets years ago, eclipsing K-12 education.21

DEAD HEAT: NORTH CAROLINA’S RACE TO SERVE ITS NEW POPULATION

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The federal government provides more of the total funding for Medicaid than K-12, but this should not comfort anyone. North Carolinians of course pay federal taxes in addition to state taxes, so rapidly increasing Medicaid costs hit them on both sides. Moreover, the federal government’s own looming need to cope with the retirement of the baby boom generation creates a systemic source of risk.

People often confuse the Medicaid and Medicare programs, and this is especially apt to happen when discussing the elderly. In the broadest terms, Medicare is a federal health care program for the elderly. States do not play a role in financing or administering the Medicare program. States do, however, finance Medicaid. Most understand Medicaid as a program for the poor, but a great deal of Medicaid spending goes to the elderly.

Nationwide Medicaid spending per enrollee in 2009 was $2,313 for children and $2,926 for non-disabled adults. Per enrollee, spending for the elderly ($13,186) stood at about seven times the per Medicaid enrollee spending for children and adults. The elderly and disabled have higher utilization and intensity of use for acute care services, and the elderly and disabled are more likely to use long-term care services.22

Congress took action in 1988 to require states participating in the Medicaid program to cover health costs not covered by Medicare for low-income residents and those holding below a certain level of financial assets.23

One can only describe the interaction between Medicaid and Medicare as complex. Many elderly Americans access Medicaid in addition to Medicare. States and the federal government jointly finance Medicaid through a system of federal matching grants to the states. An aging population will impact state finances in a variety of ways, but most obviously through the demand for Medicaid spending.

A recent analysis by Moody’s Investors Service found that several states will face mounting demands

for health care spending due to population aging. Moody’s identified states at particular risk due to the size of their elderly population projections and their current credit rating:

Controlling long-term care costs will be a challenge for all states. Those most at risk for higher costs owing to projected rapid growth in their geriatric population and highest per-capita spending are: Alaska (Aaa negative), Delaware (Aaa stable), Maine (Aa2 stable), Minnesota (Aa1 stable), New Hampshire (Aa1 stable), North Carolina (Aaa stable) and Oregon (Aa1 stable).24

In 2011, only 17 percent of Medicaid spending in North Carolina was consumed by the elderly, compared to the national average of 21 percent.25 This in part owes to North Carolina’s relatively small elderly population at the time. In 2010, the percentage of the North Carolina population aged 65 and older and 85 and older both stood below the national average.26 As detailed above, North Carolina’s elderly population will expand steadily in coming years.

Moody’s notes that cost control of elderly health care has proven difficult politically. Changes to Medicaid services at the state level require approval by the federal government while politics in the state can make cost containment difficult. “The electoral power of a growing elderly population and the political influence of long-term care providers are hurdles to reform,” Moody’s noted.27

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In 2000, North Carolina spent 23.6 percent of the state budget on K-12 education and only 19.4 percent on Medicaid. In 2014, the state spent 30.4 percent of the budget on Medicaid and 22.4 percent on K-12 education.28 The figure to the left shows that Medicaid funding increases have eclipsed all other spending trends in North Carolina’s budget during this period. K-12 has fallen slightly as a percentage of the budget.

The large increase in Medicaid spending has come primarily at the expense of the “All Other” category employed by the National Association of State Budget Officers (NASBO). “All Other” spending represented almost 27 percent of the budget in 2000, but only 17 percent in 2014. NASBO includes many types of spending in this category, including the Children’s Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health, some employer contributions to pension and health benefits, economic development, environmental spending, state police, parks and recreation, housing assistance and aid to local government.29

Many North Carolinians care very deeply about these policy areas in addition to K-12. Note that more efficient delivery of such services deserves celebration, especially if taxpayers experience gains in quality to accompany efficiency gains. For instance, the aim of a K-12 system is not to spend money but rather to educate students to the highest possible levels with the resources available. The budget trends leave little room for doubt that increases in Medicaid spending have had a “crowding out” effect on other types of state spending—creating a need for efficiency gains in service delivery in order to maintain the same or better results.

As North Carolina’s population ages and its school-aged population expands, additional pressure will be brought to bear on K-12 budgets. Research by Massachusetts Institute of Technology economist James M. Poterba regarding district bond and override elections may be of additional concern. In school spending data, Poterba found that an increase in the elderly population in a jurisdiction leads to a decrease in school spending per child. Many elderly people live on fixed incomes and thus may possess a preference to avoid tax increases. More ominously however, Poterba’s research found a more pronounced effect when the ethnic profile of the elderly people varied from that of the students.30

Categories of Major Change in North Carolina State Budget from 2000 to 2014

NATIONAL ASSOCIATION OF STATE BUDGET OFFICERS, STATE

EXPENDITURE REPORT: EXAMINING FISCAL STATE SPENDING, 2015

AND STATE EXPENDITURE REPORT, SUMMER 2001

MEDICAID11%

2014

30%

2000 19%

HIGHER EDUCATION

2%2014 15%2000 13%

ALL OTHER

-10%

2014 17%2000

27%

K-12

-2%

2014

22%

2000

24%

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In conclusion, North Carolina faces foreseeable additional demand for health spending and uncertain mid-to-long run questions concerning the supply of federal funds. This problem looks to grow more acute over time. Pressures will rise steadily for a higher return on investment on K-12 spending.

NORTH CAROLINA’S SCORES SURGED BUT STALLED AFTER 2003A review of the recent past may inform us to the possibility of improving education outcomes. The good news for North Carolinians is this has been achieved in the past. An early adopter of academic standards and accountability, North Carolina earned a reputation for improving public school outcomes in the 1990s and into the new millennium.

NAEP reports both scores and the percentage of children reaching various achievement levels — Below Basic, Basic, Proficient and Advanced. The figure to the right shows proficiency rates from the National Assessment of Educational Progress (NAEP) on the mathematics exams for fourth and eighth graders. Proficiency on NAEP represents a relatively high academic bar, but one that you want as many students as possible to clear. For some perspective, Massachusetts achieved the highest state proficiency rate on any NAEP exam in 2011 and 2013 with rates of 58 percent on the NAEP fourth-grade mathematics exam. Massachusetts has the highest NAEP scores on all four tests and ranks relatively high among European and Asian countries in equating studies linking NAEP scores with international exams.31

In 1992, only 13 percent of North Carolina fourth graders scored proficient on the NAEP mathematics exam, and 12 percent of eighth graders scored proficient. The performance of North Carolina students fell well below the national average on both tests. By the year 2003 the rate of fourth-grade math proficiency had more than tripled, up from 13 percent in 1992 to 41 percent in 2003. The proficiency rate tripled at the eighth-grade level from the 1992 levels in 2009, when the rate reached 36 percent. Looking at the entire 1992-2015 period, North Carolina went from being below the national average on both exams to above the (much improved) national average at fourth-grade math and tied with it on eighth-grade math.

North Carolina’s Statewide 4th and 8th Grade Math NAEP Proficiency Rates 1992-2015

U.S. DEPARTMENT OF EDUCATION, INSTITUTE OF EDUCATION

SCIENCES, NATIONAL CENTER FOR EDUCATION STATISTICS, NATIONAL

ASSESSMENT OF EDUCATIONAL PROGRESS DATA EXPLORER, 2015

1992 13%12%

21%20%

25%27%

41%32%

40%32%

41%34%

43%36%

45%36%

44%37%

1996

2000

2003

2005

2007

2009

2011

2013

1992 25%

30%

27%30%

32%32%33%

29%29%

27%29%

28%

34%31%

32%29%

1994

1998

2002

2003

2005

2007

2009

2011

38%30%

35%33%2013

2015

The average scale score for North Carolina students increased between 1992 and 2003, but the pace of improvement then slowed. North Carolina students gained 29 points in fourth-grade math and 23 points in eighth-grade math. The NAEP exams have a 0-500 point scale, but even so, these gains are very impressive. A gain of 10 points approximately equals an average grade level worth of progress on the NAEP. So if we gave a group of fifth graders the fourth-grade math exam, we would expect them to do about 10 points better than a similar group of fourth graders. Thus during the 1992 to 2003 period, North Carolina students succeeded in learning a great deal more math during elementary and middle school than their predecessors.

After 2003, however, the rate of improvement slowed. Between 2003 and 2015, mathematics improved by two points at the fourth-grade level, and zero points at the eighth-grade level. The momentum established in the 1990s eventually waned in terms of spurring new improvement. It did however succeed at moving North Carolina from behind the national average in math to

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ahead of it at fourth grade and tied with it at the eighth-grade level in the most recent exam. If the state had maintained even half of the rate of improvement seen during the 1992 to 2003 period, North Carolina would have boasted the highest mathematics NAEP scores in the nation in 2015.

North Carolina students have also demonstrated progress on the NAEP reading exams, although of a more modest nature. On the positive side, North Carolina displayed the highest fourth-grade reading proficiency rate in state history in 2015. Between 1992 and 2015, North Carolina fourth graders gained 14 scale points on the fourth-grade reading test. Thus the fourth graders of 2015 were reading at a level that

we might have seen from the average mid-year sixth grader in 1992. In 1992 on the eighth-grade exam, North Carolina’s proficiency rating stood unchanged between the earliest measure, both 30 percent in 1998 and 2015. 32

The improvements in NAEP scores mirror other improvements seen in North Carolina schools. The four-year cohort graduation report for the Class of 2006 was 68.3 percent, but for the Class of 2014 equaled 83.9 percent.33 Higher high school graduation rates over time have also moved to greater levels of post-secondary success. More than 30 percent of North Carolina residents ages 25 to 44 have a bachelor’s degree or higher, as do 27.5 percent of residents ages 45 to 64. In comparison, only 21.6 percent of North Carolinians age 65 or older have a bachelor’s degree or a higher level of education.34

Without these improvements, North Carolina would have far less shelter from Hurricane Gray. The task ahead however remains daunting. North Carolina needs further academic gains and needs them in a cost effective manner. This does not necessarily mean spending less money, but it does mean that the state faces a growing need to increase the return on investment for spending—the bang for the education buck.

Some will question whether this is remotely possible. However, North Carolina has already achieved it with charter schools.

CHARTER SCHOOL SUCCESS IN NORTH CAROLINAAcademic comparisons between charter and district schools can be fraught with peril. Apparent differences in scores can be the result of differences in student demographics, which cannot be perfectly controlled for in the absence of a well-designed and executed random assignment study. In a random assignment study, the impact of an intervention (such as attending a charter school) can be isolated in the random assignment of students into a control and experimental group. In the case of charter schools, this would entail examining both those students who applied for admission to

1992 13%12%

21%20%

25%27%

41%32%

40%32%

41%34%

43%36%

45%36%

44%37%

1996

2000

2003

2005

2007

2009

2011

2013

1992 25%

30%

27%30%

32%32%33%

29%29%

27%29%

28%

34%31%

32%29%

1994

1998

2002

2003

2005

2007

2009

2011

38%30%

35%33%2013

2015

North Carolina’s Statewide 4th and 8th Grade Reading NAEP Proficiency Rates 1992-2015

U.S. DEPARTMENT OF EDUCATION, INSTITUTE OF EDUCATION

SCIENCES, NATIONAL CENTER FOR EDUCATION STATISTICS, NATIONAL

ASSESSMENT OF EDUCATIONAL PROGRESS DATA EXPLORER, 2015

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a charter school but lost the admission lottery (the control group) to those whole applied and won. Random assignment eliminates the possibility of large group differences, but is very difficult to perform. A meta-analysis of random assignment charter school studies nationwide recently found a large majority of studies found statistically significant test score effects associated with charter school attendance.35

We can compare scores without a random assignment study but must employ caution. Preexisting differences between students can explain differences in scores. Despite the fact that charter schools require a random process for student admission when applications exceed available spots, differences in application rates can lead to differences in attendance rates across student groups. This can be especially the case when the charter sector is relatively small.

The National Alliance of Public Charter Schools reveals that while North Carolina charter schools enrolled a slightly higher percentage of black students during the 2012-13 school year, district schools enrolled a higher percentage of Hispanic students and a somewhat lower percentage of white students than North Carolina charters.36 Given widely acknowledged achievement gaps, we would expect these differences in student populations to advantage the charter school sector all else being equal.

Some other sources of bias in test scores cut against charter schools however. Students tend to take a temporary academic hit when they transfer between schools. Schools, like most organizations, don’t tend to have the best results from a new school in year one as routines are established. When you have an entire sector with many brand new schools full of students who just transferred in, a snapshot look at test scores can contain what may ultimately prove to be an optical illusion of lower scores.37 As a charter sector matures, however, and new schools come to constitute a smaller percentage of the total sector, we will have a more accurate reading of aggregate performance.

North Carolina’s charter sector is still relatively small, educating only 3.4 percent of students. New schools full of recently transferred students will continue to loom large in the sector for some time. NAEP testing involves taking a random selection of students across states for each test and grade level, and thus the ability to look at subgroup performance in the charter sector will continue to have constraints until the charter

sector grows larger. Some states with large charter sectors, such as Arizona and Florida, displayed NAEP scores for charter school students that ranked them with the highest performing states in 2015 across a variety of subgroups—including states with substantial student demographic advantages vis a vis the charter school students.38 In other words, in Arizona we can go directly into the NAEP data and compare charter and district scores across a variety of factors—family income, parental education, race, special program status and others. Unfortunately the small size of the North Carolina charter sector does not yet allow such comparisons.

With these important caveats in mind, we can say that what we would like to see in the 2015 NAEP data is relatively high scores for North Carolina charter school students. In future years, we hope to see additional research and better data to inform our understanding of which factors explain how much of the difference between district and charter schools, but first you need to see a difference to explain. At the moment, North Carolina charter schools have higher NAEP scores than district schools, but we lack the ability to explore deeply whether this owes to differences in student special population status and/or demographics.

Special Program status is one of the few factors that the 2015 NAEP does allow for subgroup comparisons. Unlike student subgroups based on parental education, income or race, a large majority of students in both district and charter schools are general education students. Some differences in district and charter school scores could be accounted for by differences in the percentages of students with special needs or those requiring English as a Second Language services. The 2015 NAEP however does allow for comparisons between general education students in North Carolina charter schools. The figure below presents those scores: North Carolina general education students attending charter schools compared to statewide averages for general education students on the 2015 NAEP mathematics exam.

While currently our ability to make comparisons in the NAEP data faces limits—making the above comparison far from definitive—we have reason to feel cautiously optimistic about North Carolina charter schools. The states with average scores higher than North Carolina charter school students, for instance, have significant student demographic advantages. North Carolina’s charter school general education students for instance

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narrowly edged out their peers in Maine. The reader should note that Maine is far less ethnically diverse than North Carolina charter school students (91.5 percent of Maine students are White) and the state spends $12,500 per student in Maine compared to only $8,300.

Meanwhile, North Carolina charter schools get fewer public dollars per pupil and demonstrated the same or higher NAEP scores on the 2015 NAEP exams. Examining general education students alone, North Carolina charter schools scored five points higher on fourth-grade reading, three points higher in eighth-grade reading, tied in fourth-grade math and scored seven points higher in eighth-grade mathematics.39

None of these differences can be described as earth shattering, but given the prevalence of new schools and new transfers in the North Carolina charter sector, higher scores despite the possible “optical illusion” of a growing sector with new schools and recent transfers provide cause for cautious optimism. Consider a revenue level of $8,277 per child in charter schools compared to $9,999 in district schools.40 We can safely conclude that North Carolina’s charter schools have managed to get their students into the same (and perhaps better) academic ballpark as their district peers at a smaller overall financial cost for taxpayers. Moreover, through the charter renewal process, authorities will have the opportunity to shut down low-performing charters over time. Hopefully with maturation North Carolina charter schools will begin knocking the ball out of the park regardless of the comparisons used.

High-quality charters succeed despite a lower overall funding level because they have greater flexibility to pick the curriculum, special programs and facilities that meet their students’ unique needs. Providing parents with the freedom to match the focus and strength of schools with the individual interests and needs of their child represents the “secret sauce” of parental choice programs. Charters are a part of a suite of novel practices searching for ways to show parents greater autonomy within an updated framework of public education. Great test scores are not an indication of these schools being better per se, but rather an indication that they were a good fit for many of the students whose parents selected these schools to educate their child. Operating at a lower overall cost represents a welcome additional benefit for taxpayers.

MinnesotaNew Jersey

New HampshireVermont

WashingtonWisconsin

North Carolina (Charter)Maine

North DakotaIndiana

ColoradoVirginia

IowaMontana

NebraskaWyoming

UtahOhio

ConnecticutKansas

PennsylvaniaAlaska

TexasRhode Island

South DakotaMaryland

IllinoisOregonArizona

IdahoNorth Carolina

New YorkHawaii

DelawareMissouri

CaliforniaTennessee

GeorgiaNevada

MichiganKentucky

OklahomaFlorida

South CarolinaArkansas

New MexicoWest Virginia

MississippiLouisianaAlabama

Minnesota

0 100 200 300 400 500

NORTH CAROLINA

NORTH CAROLINA (CHARTER)

SOURCE: U.S. DEPARTMENT OF EDUCATION, INSTITUTE OF EDUCATION SCIENCES, NATIONAL CENTER FOR EDUCATION STATISTICS, NATIONAL ASSESSMENT OF EDUCATIONAL PROGRESS DATA EXPLORER

NAEP 2015 8th Grade Math Scores-Statewide Averages and North Carolina Charter School Students

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BEATING THE HEAT:

Discussions of parental choice can sometimes incite an unjustified level of excitement. Mindful of this, let us note here that the North Carolina Constitution guarantees a public education system and the public strongly supports it. Thus far, North Carolina has successfully created alternatives to school districts, but these alternatives have not and will not replace school districts. With hundreds of thousands of additional students and an aging population on the way, district schools will be full of students and teachers for as far as the demographer’s eye can

project. Our preoccupation should be “How can we maximize the number of students attending high-quality schools?”

EXPANDED PARENTAL OPTIONSIn recent years, North Carolina lawmakers have removed a cap on the number of charter schools and created ways to offer students the opportunity to attend private school through the Opportunity Scholarships for low-income students and Children with Disabilities Scholarship Grants. Choice programs have the ability to deliver quality schools, higher rates of parental satisfaction and free up resources for other critical state activities. These programs represent crucial steps toward expanding the universe of schools from which parents can choose in searching for the best available fit for their child. Parental choice should be viewed as a fundamental parental right regardless

of a state’s circumstances. Given North Carolina’s circumstances, it should be understood to have large practical benefits in addition. Lawmakers can and should do more to benefit students and taxpayers on the parental choice front.

Education Savings Accounts (ESAs) represent a next-generation choice model. Five states—Arizona, Florida, Mississippi, Nevada and Tennessee—have adopted ESA programs since 2011. An ESA program adopts an account-based approach, managed by parents and overseen by state authorities. Accounts have limited but multiple uses: private school tuition, individual public school courses, community college and university tuition and fees, services from licensed therapists, online education programs, transportation, books and curriculum and savings for future higher education use. The last use creates an incentive for parents to carefully manage funds and seek the biggest bang for the education buck.

North Carolina’s school voucher program includes multiple uses for parents, a unique feature when the program passed that foreshadowed the advent of account based programs. The North Carolina voucher programs do not however allow saving of funds from one year to the next in an account like fashion.

North Carolina lawmakers however had wisely recognized the need for multiple options for parents and had effectively foreshadowed the move into account type choice programs.41

INCREASING K-12 OPPORTUNITIES INSIDE & OUTSIDE OF THE DISTRICTS

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A landline phone is an amazing piece of technology that does one function reliably and well. Someone from the 19th century would be astounded by a landline phone and what it can do. An ESA however more closely resembles a smart phone: while it can still make calls, it can do multiple things. Just like the smartphone created the platform to create useful apps, lawmakers have already devised new uses for programs for inclusion in the accounts. Nevada lawmakers first introduced transportation with a dollar limit into the accounts in 2015, addressing a major concern of school choice equity in the process. ESAs move closer to a system of full parental control over education and create proper incentives for service providers to deliver the best possible products at the lowest possible price.

Facing a huge overcrowding problem, with district schools unable to either build enough space or hire enough public school teachers, Nevada lawmakers created the nation’s most robust choice program in 2015. Nevada’s ESA program passed as part of a comprehensive set of policies aimed at improving education outcomes. The law makes all public school students eligible to transfer into the ESA program, and addresses equity concerns by providing higher levels of subsidy for low-income students and students with disabilities. Striking an appealing balance between the need for academic transparency to the public and the independence and diversity of private education providers, the bill requires ESA students to take a nationally normed reference test (e.g. the Stanford 10 or Iowa Test of Basic Skills).

Nevada’s program was scheduled to launch in January 2016, and before that the state was taking early applications. As has been the case for every private choice program, no mad exit from the public school system has ensued. The state received 4,100 pre-applications for participation in the ESA program—less than one percent of the total public school population.42 Private choice programs have always started small and grown incrementally over time with increasing public awareness and incremental increases in private school supply.

North Carolina policymakers should carefully study Nevada’s law and the implementation process carried out by Nevada State Treasurer Dan Swartz that included the state contracting with a private firm experienced in the management of health savings accounts.

A broadly available ESA program could slow the rate of district enrollment growth, and increasing and saving the state money could benefit North Carolina students and taxpayers. Nevada has set a high bar, but North Carolina could create an even more powerful mechanism for parental control of education.

INCENTIVE FUNDINGAnother example of additional spending with a potentially high return on investment involves the provision by the state of school bonuses for the earning of college credit by exam and/or high-demand professional certifications. The policy provides a significantly greater bonus for low-rated schools that help students earn college credit by exam and created a partnership with a non-profit to identify and recruit students from student groups under-represented in Florida universities to seek credit-earning opportunities.

As a result of these policies and practices, Florida saw a substantial increase in students passing Advanced Placement exams. In 2014, Florida ranked third overall on the percentage of graduates passing an Advanced Placement exam.43 The College Board found that the state ranked second on the overall increase in Advanced Placement passing rates between 2003 and 2013.44 African-American and Hispanic students not only participated in this increase, they helped to lead the charge. Since the advent of the program, the number of African-American and Hispanic students passing Advanced Placement exams has more than quadrupled.45 Students taking Advanced Placement exams have shown a greater level of persistence in college, including students who failed to pass the exams. While Florida adopted both an Advanced Placement and industry certification incentive, other states have also seen how these types of incentives can work for students.

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Lawmakers want to support the long-term success of students by providing them with real-world skills that employers value. In Kansas, legislators created a similar bonus program to reward school districts for students who earn industry-recognized certifications in high-demand fields. The incentive was passed in 2012 and took effect in 2012-2013. Prior to the incentive, 548 students earned industry credentials. Three years later,

Kansas saw an increase of over 205 percent, with 1,670 students earning industry credentials in 2014-2015.46 In this way, Kansas lawmakers have invested in the career success of students.

In facing a future with more elderly and young residents, North Carolina lawmakers need to take strong action to equip every student with the opportunity to enjoy success in college, a career, or in both. We should regard each and every student that fails to graduate or graduates without the skills to succeed in either college or the workplace as a tragic waste of human potential. The state cannot afford to make this mistake now, and the cost will rise dramatically in the future.

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CONCLUSION:INNOVATION NEEDED FOR CONTINUED SUCCESS

Past success in policy innovation should inform future action because the path will become increasingly rocky. In the worst-case scenario, North Carolina would experience slowing economic growth, and young and old people would set about fiercely battling over limited resources for health care and education funding. This scenario can be avoided, but improved K-12 outcomes must play a role in securing the prosperity needed to successfully navigate the future.

Specifically, North Carolina needs both improved outcomes and cost efficiencies in K-12 to cope with K-12 enrollment growth and the pressure for increased health care spending. K-12 reform alone cannot hope to address this crisis, but it is also the case that we cannot hope to address the challenge without substantial K-12 improvement.

North Carolina students should not be graduating from high school without being prepared for success in college or else equipped with marketable job skills. Policymakers should craft high-impact policies to create financial incentives for students to achieve one or both of these merits.

Enrollment growth projections make a powerful case for strengthened parental choice policies. Thousands of North Carolina parents sit unhappily on waitlists for charter schools in search of a school that fits their child’s needs.47 Policymakers should pursue policies to help high-quality school operators expand the number of seats they can offer to parents. In addition, the state should put private education within the reach of a larger number of North Carolina parents. The vast majority of North Carolina students will continue to attend district schools regardless of what options policymakers create.

Challenges loom large, but our opportunities are larger still. North Carolina’s only palatable path out of the challenge of age demographic change involves innovation. The state has a successful track record to build on. It’s time to get North Carolina scores moving again. Some will emotionally cling to an unsustainable status quo, but the need for improved outcomes in education and health care spending will become increasingly impossible to ignore or deny.

It’s time to go all in to secure a better state than the one North Carolinians inherited. North Carolinians today can and should work to improve the status quo for the generation coming next.

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1. See Colby, Sandra and Jennifer Ortman. 2014. “The Baby Boom Cohort in the United States: 2012 to 2060.” Report of the United States Census Bureau, available on the internet at https://www.census.gov/prod/2014pubs/p25-1141.pdf.

2. For a discussion of the looming aging crisis, see Jeff Wheelwright.2012. “The Gray Tsunami: The world faces a wave of aging, and with it wrenching social and economic changes. An Arizona retirement community hints at things to come.” Discover (Oct. 2014) http://discovermagazine.com/2012/oct/20-the-gray-tsunami.

3. Paul Taylor and Pew Research Center, The Next America: Boomers, Millennials and the Looming Generational Showdown (New York, NY: PublicAffairs, 2014), p. 17.

4. United States Census Bureau. 2005. “Interim Projections of the Population by Selected Age Groups for the United States and States: April 1, 2000 to July 1, 2030.” Publication of the United States Census Bureau, available on the internet at https://www.census.gov/population/projections/data/state/projectionsagesex.html.

5. National Association of State Budget Officers. “State Expenditure Report.” Publication of the National Association of State Budget Officers, available on the internet at http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report%20%28Fiscal%202013-2015%29S.pdf, page 8.

6. See Brownstein, Ronald. 2015. “‘Brown and Gray’ Dynamics New Census data reveal divergent age profiles for a youthful population of color and an aging white population.” Article in the National Journal, available on the internet at http://www.nationaljournal.com/next-america/early-childhood/brown-gray-dynamics.

7. United States Census Bureau. 2005. “Table 5. Population under age 18 and 65 and older: 2000, 2010, and 2030.” Available on the Internet at https://www.census.gov/population/projections/data/state/projectionsagesex.html.

8. Ibid.

9. See Ladner, Matthew. 2014. “Turn and Face the Strain: Age Demographic Change and the Near Future of American Education.” Publication of the Foundation for Excellence in Education and the Friedman Foundation for Educational Choice, available on the internet at http://static.excelined.org/wp-content/uploads/ExcelinEd-FaceTheStrain-Ladner-Jan2015-FullReport-FINAL2.pdf, page 25.

10. Ibid.

11. Ibid.

12. North Carolina Office of State Budget and Management. 2015. Projected County Totals – Standard Age Groups. Available on the internet at http://www.osbm.nc.gov/demog/countytotals_standardagegroups.

13. United States Census Bureau. 2015. “Annual Estimates of the Resident Population by Sex, Age, Race, and Hispanic Origin for the United States and States: April 1, 2010 to July 1, 2014.” Publication of the U.S. Census Bureau, Population Division, available on the internet at http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk.

14. North Carolina Office of State Budget and Management. 2015. Projected County Totals – Standard Age Groups. Available on the internet at http://www.osbm.nc.gov/demog/countytotals_standardagegroups.

15. United States Department of Education, National Center for Education Statistics. 2015. Digest of Education Statistics Table 203.20. Enrollment in public elementary and secondary schools, by region, state, and jurisdiction: Selected years fall 1990 through fall 2024.” Publication of the National Center for Education Statistics, available on the internet at https://nces.ed.gov/programs/digest/d14/tables/dt14_203.20.asp.

16. Hui, T. Keung. 2015. “Wake County school system seeing fewer new students than expected.” Article appearing in the December 8, 2015 edition of the News and Observer, available on the internet at http://www.newsobserver.com/news/local/education/article48670670.html.

17. Forster, Greg. 2013. “Win-Win Solution: The Empirical Evidence on School Choice.” Publication of the Friedman Foundation for Educational Choice, available on the internet at http://www.edchoice.org/wp-content/uploads/2015/07/2013-4-A-Win-Win-Solution-WEB.pdf#page=1, pages 10-13.

18. National Association of State Budget Officers. “State Expenditure Report.” Publication of the National Association of State Budget Officers, available on the internet at http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report%20%28Fiscal%202013-2015%29S.pdf, page 8.

19. De Rugby, Veronique. 2013. “The U.S. Debt in Perspective.” Publication of the Mercatus Center, available on the internet at http://mercatus.org/publication/us-debt-perspective.

20. Pew Research Center. 2010. “Baby Boomers Retire.” Available on the internet at http://www.pewresearch.org/daily-number/baby-boomers-retire/.

SOURCES

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21. National Association of State Budget Officers. “State Expenditure Report.” Publication of the National Association of State Budget Officers, available on the internet at http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report%20%28Fiscal%202013-2015%29S.pdf.

22. Kaiser Family Foundation. 2012. “5 Key Questions about Medicaid and its role in State/Federal Budgets and Health Reform.” Available on the internet at https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8139-02.pdf.

23. Rowland, Diane and Barbara Lyons. 1996. “Medicare, Medicaid, and the Elderly Poor.” Article in Health Care Financing Review, Winter 1996 Volume 18, number 2. Available on the internet at http://www.ssa.gov/history/pdf/RowlandandLyons.pdf, pages 65-66.

24. Moody’s Investor Service. 2015. “Moody’s: Aging population driving increases in state Medicaid long-term care spending.” Publication of Moody’s Investor Service, available on the internet at https://www.moodys.com/research/Moodys-Aging-population-driving-increases-in-state-Medicaid-long-term--PR_325875.

25. Kaiser Family Foundation. “Medicaid Spending by Enrollment Group.” Publication of the Kaiser Family Foundation, available on the internet at http://kff.org/medicaid/state-indicator/medicaid-spending-by-enrollment-group/#.

26. United States Census Bureau. 2011. “The Older Population: 2010.” Publication of the United States Census Bureau, available on the internet at https://www.census.gov/prod/cen2010/briefs/c2010br-09.pdf.

27. Ibid, Wiles.

28. Ibid NASBO, page 19.

29. Ibid NASBO, page 3.

30. Poterba, James M. 1996. “Demographic Structure and the Political Economy of Public Education.” National Bureau of Economic Research Working Paper number 5677, available on the internet at http://www.nber.org/papers/w5677.

31. Peterson, Paul E., Ludger Woessmann, Eric A. Hanushek and Carlos Xabel Lastra-Anadón. 2011. “Are U.S. Students Ready to Compete?” Publication in the Fall 2011 edition of Education Next, available on the internet at http://educationnext.org/are-u-s-students-ready-to-compete/.

32. North Carolina 8th graders took the 8th grade reading exam for the first time in 1998.

33. North Carolina Department of Public Instruction. “Cohort Graduation Rates.” Available on the internet at http://www.dpi.state.nc.us/accountability/reporting/cohortgradrate.

34. Tippet, Rebeca. 2015. “NC in Focus: Increasing Educational Attainment.” University of North Carolina Carolina Demography Blog, available on the internet at http://demography.cpc.unc.edu/2015/12/10/nc-in-focus-increasing-educational-attainment/.

35. Cheng, Albert, et al. 2015. “No Excuses Charter Schools: A Meta-Analysis of the Experimental Evidence on Student Achievement.” EDRE Working Paper No. 2014-11, available on the internet at http://www.uaedreform.org/downloads/2014/12/no-excuses-charter-schools-a-meta-analysis-of-the-experimental-evidence-on-student-achievement.pdf.

36. See National Alliance of Public Charter schools Public Charter School Dashboard at http://dashboard.publiccharters.org/dashboard/students/page/overview/state/NC/year/2013. For the 2012-13 school year North Carolina district schools enrolled 51.8 percent White students, 26.1%, 14.3% Hispanic students. North Carolina charters enrolled 60.7 percent White students, 26.4% Black students and 6.4% Hispanic students.

37. Peterson, Paul E. 2010. “Charter Schools and Student Performance.” Column appearing in the March 16, 2010 edition of the Wall Street Journal, available on the internet at http://www.wsj.com/articles/SB10001424052748703909804575123470465841424.

38. See Ladner, Matthew. 2015. “Slice and Dice the Data but Arizona Charters Continue to CeleNaep Good Times.” Publication on the Jay P. Greene Blog, available on the internet at http://jaypgreene.com/2015/11/16/slice-and-dice-the-data-but-arizona-charters-continue-to-celenaep-good-times/. See also Ladner, Matthew. 2015. “Florida Charter Schools: We’re going to CeleNAEP and Have a Good Time!” Publication on the Ed Fly Blog, available on the internet at http://www.excelined.org/2015/11/20/florida-charter-schools-were-going-to-celenaep-and-have-a-good-time/. See also Ladner, Matthew. 2015. “AZ Charter Scores are Real, and They’re Spectacular.” Publication on the Jay P. Greene Blog, available on the internet at http://jaypgreene.com/2015/12/08/az-charter-scores-are-real-and-theyre-spectacular/.

39. National Center for Education Statistics. 2015. National Assessment of Educational Progress. Available on the internet at https://nces.ed.gov/nationsreportcard/.

40. Batdorff, Meagan, et al. 2014. “Charter School Funding: Inequity Expands.” Publication of the University of Arkansas Department of Education Reform, available on the internet at http://www.uaedreform.org/wp-content/uploads/2014/charter-funding-inequity-expands-nc.pdf, page 2.

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41. For details on the uses for North Carolina’s voucher program for special needs students, see http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/BySection/Chapter_115C/GS_115C-112.6.html.

42. Office of the Nevada State Treasurer. 2015. “Treasurer’s Office Says Last Minute Enrollment “Glitch” Fixed-Extends Deadline Until 5:00 P.M. Wednesday.” Press Release by the Nevada State Treasurer Office, available on the internet at http://www.nevadatreasurer.gov/PublicInfo/PR/2015_News_Releases/.

43. Postal, Leslie. 2015. “Florida Ranked Third for AP Success.” Article in the April 8, 2015 edition of the Orlando Sentinel, available on the internet at http://www.orlandosentinel.com/features/education/school-zone/os-florida-class-of-2014-ap-scores-post.html.

44. College Board. 2014. “The 10th Annual AP Report to the Nation.” Publication of the College Board, available on the internet at http://media.collegeboard.com/digitalServices/pdf/ap/rtn/10th-annual/10th-annual-ap-report-to-the-nation-single-page.pdf, pages 12-13.

45. Foundation for Excellence in Education. 2013. Florida’s Education Revolution. Publication of the Foundation for Excellence in education, available on the internet at http://excelined.org/wp-content/uploads/Floridas-Education-Revolution-Summary-2013.pdf, page 7.

46. Kansas State Department of Education. 2015. 2015 Credential Incentive Report. Publication of the Kansas Department of Education, available on the Internet at http://www.ksde.org/Portals/0/CSAS/CSAS%20Home/CTE%20Home/Initiatives/2015%20Credential%20Incentive%20Report.pdf.

47. Parents for Educational Freedom in North Carolina. 2015. “Public Charter Schools.” Publication of Parents for Educational Freedom in North Carolina, available on the internet at http://pefnc.org/resources-research/public-charter-schools/.

ExcelinEd.org

About the AuthorDr. Matthew Ladner is the Senior Advisor of Policy and

Research for the Foundation for Excellence in Education.

Ladner has written numerous studies on school choice, charter

schools and special education reform and coauthored Report

Card on American Education: Ranking State K-12 Performance,

Progress and Reform for the American Legislative Exchange

Council. Ladner has testified before Congress, the United States

Commission of Civil Rights and numerous state legislative

committees. Ladner is a graduate of the University of Texas

at Austin and received a Ph.D. in Political Science from the

University of Houston. Ladner is a Senior Fellow with the

Foundation for Educational Choice. He lives in Phoenix with his

wife Anne and children Benjamin, Jacob and Abigail.