Allotting Inequity: Evaluating North Carolina’s Classroom Teacher Funding

While many state-level finance equity studies examine the effectiveness of state funding mechanisms overall, fewer examine specific components that make up these mechanisms. This research uses state-level longitudinal administrative data to examine levels of horizontal and vertical equity in the distribution of teacher salary dollars via the position allotment element of the North Carolina state funding mechanism. Using OLS regression with districts and year fixed effects, we find inequities in the allocation of teacher salary dollars related to concentrations of racial and language minority groups at the district level. Specifically, we find inequities linked to African-American and English-learning students. We hypothesize that these inequities are linked to the use of prior-year district salaries to calculate current-year allocations, resulting in a cycle of inequity that builds over time.