North Carolina teachers rally on May 16 (via North Carolina Association of Educators Flickr)
Last week we posted a guide to the corporations and billionaires that are defunding public education and opposing striking teachers in Arizona, West Virginia, Oklahoma, Kentucky, and Colorado. We paid special attention to the austerity and privatization agenda in these states – in other words, how corporate forces in these states have pushed tax cuts that gutted state revenues for public school funding, and then, when public schools suffered because of this, these same corporate forces called for school privatization.
Since the teacher strike wave has spread to North Carolina, here’s an update that begins to look at some of the corporate forces that teachers in that state are up against. North Carolina has implemented some of the most aggressive tax cuts for corporations and the wealthy in the entire US, and it’s home to some of the most aggressive right-wing and school privatization forces in the country as well.
Similar to teachers in other states, North Carolina teachers are making demands to reverse the crisis created by these corporate forces and their austerity agenda. These demands include a rise in per-pupil spending, $1.9 billion to fix crumbling schools and large class sizes, an end to corporate tax cuts until per-pupil spending and teacher pay reach the national average, and hundreds of new nurses, social workers, and counselors.
North Carolina teacher pay ranks 39th in the nation, and teachers have experienced a 9.4% decline in real income since 2009. Whereas the national average of per-pupil spending is $11,642, it is significantly less in North Carolina at only $9,329. Moreover, as we discuss below, corporate school privatization advocates have succeeded to reallocating public education funds into the coffers of private and charter schools.
This defunding of public education is the product of one of the deepest waves of tax cuts for corporations and the wealthy in the entire US. These tax cuts have benefited big businesses and the super-rich tremendously – the top 1% of North Carolinians have received more than a one-third of the money from the tax cuts – but gutted state revenues for public services like schools.
In 2013, the GOP-dominated North Carolina state legislature approved a plan that cut corporate taxes from 6.9% to just 3% by 2017. According to the Denver Post, this is the lowest corporate tax rate in the nation – though still not low enough for North Carolina plutocrats and conservatives, who are lowering it even more next year to 2.5%. In addition to this, the personal tax rate, which taxed the wealthiest at 7.75%, was turned into a 5.75% flat tax, which was lowered again to 5.49% in 2017 and it set to fall to 5.25% in 2019. On top of all this, North Carolina abolished its estate tax while boosting sales taxes on things that would disproportionately hit working people, like car repairs.
These tax cuts have devastated state revenues that go into funding services like public schools. In 2017, the North Carolina Justice Center wrote that tax cuts from 2013 to 2017 would result in $3.5 billion less revenue than before the tax cuts were implemented (at most, economic growth in the state made up for only about one-third of these losses). Meanwhile, the North Carolina Legislature’s Fiscal Research Division projects a budget shortfall of at least $1.2 billion in 2019, which is 5% of the total state budget.
As a result of all this, real spending on per-pupil spending is down, and there are 10,000 fewer public teachers in the state. According to the Institute on Taxation and Economic Policy, since 2009-2010 state funding for textbooks has declined 45%, funding for supplies and materials has declined 55%, and funding for technology in schools has declined 59%. Earlier this month, the State Board of Education pleaded with state leaders to hold off on a $5 million cut to the school budget planned for July, which comes on top of another $3 million cut last year.
As mentioned, this damaging agenda of tax cuts and public school defunding has been driven by powerful corporate forces and their far-right allies. A key player has been Art Pope, a multimillionaire who is the founder and CEO of Variety Wholesalers, a chain of hundreds of discount stores based in North Carolina. Pope’s net worth is unclear – he denies that he’s a billionaire, though he has spent tens of millions on state politics and a 2011 story said his family foundation may have $150 million in assets.
Pope has bankrolled the conservative austerity agenda in North Carolina as well as reactionary causes like HB2, the so-called “Bathroom Bills” that discriminated against transgender people. He has spent at least $55 million on conservative think tanks and advocacy groups – and this number is from 2014. After throwing millions into pushing a far-right agenda in North Carolina, then-Governor Pat McCrory even made Pope his budget director – quite literally letting this big donor become a major architect of the state’s austerity agenda (Pope’s political donations stopped when he was in government, but they shot back up when he left the position in late 2014).
Pope is a key player in the same donor network as the Koch brothers. He is a funder of American for Prosperity (which he gave $215,000 to in 2015-2016) and dozens of other far-right, billionaire-backed groups that push the austerity and privatization agenda. In particular, Pope bankrolls a slew of State Policy Network (SPN) affiliates and associates. The SPN is an astroturf network of thinks tanks that pushes school privatization and has issued guidelines – that were leaked to the media – on how to discredit striking teachers. North Carolina SPN affiliates and associates include the John Locke Foundation, the Civitas Institute, and the Jesse Helms Center. Pope gave these three groups a combined $3,836,0000 in 2015-2016, and the John Locke Foundation and Civitas Institute in particular have been big opponents of teachers, publishing a stream of anti-teacher, pro-school privatization articles in the lead up to North Carolina teachers’ actions. (The Civitas Institute also created a repugnant database of those arrested in Moral Monday protests that included their mugshots).
While Pope has been a big driver of North Carolina’s far-right austerity and privatization agenda, other corporate forces have pushed and benefited from that same agenda. One big player is Duke Energy, a major fossil fuel and utilities corporation based in North Carolina. The board chair of the North Carolina Chamber of Commerce, David Foundation, is the North Carolina president of Duke Energy, and Duke is one of the Chamber’s foundation investors. Pat McCrory, who was governor when the state legislature passed its huge tax cuts, and who appointed Art Pope as his budget director, worked at Duke Energy for 28 years prior to entering politics. McCrory hosted a private dinner with Duke CEO Lynn Good and other Duke executives at the Governor’s mansion in 2015. Good is widely seen as one of the most powerful persons in the state. In the past, Duke has been tied to the state’s school privatization movement.
Two of North Carolina’s four billionaires, Jim Goodnight and John Sall, co-founded and are top executives of SAS, a business analytics software vendor based in the state. Goodnight and Sall together are worth almost $15 billion. Goodnight and former Governor McCrory are friends, and Goodnight is a big political big donor and is viewed as influential in North Carolina politics.
Other major corporations with their headquarters in North Carolina include Bank of America and Nucor. Corporations in North Carolina have also benefited from close to $5.5 billion in subsidies, most of it since 2008, according to Good Jobs First. The biggest beneficiaries of corporate tax subsidies include Apple (which has received over $360 million in subsidies), Dell (which has received over $303 million in subsidies), and Fidelity Investments (which has received over $105 million in tax subsidies).
These corporate forces that have benefited from North Carolina’s huge tax cuts have also created conditions for the state to become a laboratory for school privatization. A leader of Parents for Educational Freedom in North Carolina, or PEFNC – a big beneficiary of Walmart money with ties to Betsy DeVos, which we discuss below – remarked that “you’d be hard-pressed to find another state that has done so much in education reform.” One big thing that has paved the way for this school privatization has been the rise of vouchers – with different titles like Disabilities Grant, Opportunity Scholarship, Education Savings Account – that have channeled public revenue away frm public schools and into the private and charter school system.
The Waltons – heirs to the Walmart fortune – have intervened in North Carolina to push school privatization (Walmart is also the biggest private employer in North Carolina). Since 2009 the Walton Foundation has channelled a whopping $4,635,000 to PEFNC. In February, PEFNC’s president left the organization to become national director for state teams and political strategy for the American Federation for Children (AFC) – the school privatization advocacy group that was founded by Betsy DeVos. The AFC funded the PEFNC while DeVos was in charge of it.
As the Waltons’ actions show, the school privatization push in North Carolina gets a lot of money from out of state. Another example of this is Oregon multimillionaire John D. Bryan, who runs a charter school network with 13 schools in North Carolina. Bryan threw $600,000 into North Carolina politics to ultimately help pass a law allowing for the takeover of low-performing schools in the state. Now, Bryan’s charter network, TeamCFA, is being recommended to partner on the takeover of several schools.