By Dr. Francis P. Koster

KANNAPOLIS (September 24, 2025) – On June 11 of this year, CNBC conducted a survey which ranked North Carolina (the ninth most populous state) as the “Number One State in America for Doing Business”!

North Carolina won the number one slot in part because in 2013 our state legislature put in place a plan to reduce the corporate income tax rate from 6.9% to 2.25% by 2025, and 0% for tax years 2029 and beyond. This plan has had, and will continue to have, a significant impact on our state budget.

In 2024, while these cuts in corporate taxes were being implemented, the aggregate total of all our state investments in public K-12 instruction ranked us 48th nationally in funding per student – $4,655 below the national average. 

In the “#1 State for Business” competition, using a scale developed by the business community, each state can earn a maximum of 2,500 points. Of those 2,500 points, only 110 points can be used to measure any dimension of education! That should tell you something about how much the business community is paying attention to our public schools.

Underfunding North Carolina public schools is not caused by lack of money – it is caused by our business community and elected officials thinking of funding K-12 education as an expense, not an investment. 

When you are thinking about North Carolina tax reductions for profit-making corporations as a benefit to the state as a whole, compared to the benefits investing in schools might bring, two facts should be borne in mind:

1. If you add the total enrollment of North Carolina’s public schools and the number of people working at those schools, and divide by the state population, you will find that one in seven North Carolinians works in or attends a public K-12 school; and
2. Traditional K-12 public school districts are the single-largest employer in 35 North Carolina counties, and among the top five employers in 98 counties.

Below is a list of ways our legislature could invest dollars from the state budget that would improve the state’s school funding rank while earning a nice rate of return.

One very successful investment strategy which has been shown to pay huge rates of return is to fix all the air conditioning in office buildings. Since the 1990’s, research done by Lawrence Berkley Laboratory, Harvard School of Public Health, and all of North Carolina’s universities have clearly demonstrated that old buildings with poor Indoor Air Quality (IAQ) lower the ability of the employee’s brain to work at its full potential. This problem is now actually an opportunity that could be profitably solved.

For example, a comprehensive analysis by Carnegie Mellon University of private sector investments that improved Indoor Air Quality (IAQ) found an annual Return On Investment of at least 120%.

Another study done by five researchers from a different group of respected universities showed that an annual investment of less than $40 per employee to improve Indoor Air Quality increased productivity by $6500 each year.

This potential to earn a high rate of return by improving brain functions also indicates a high rate of return can be achieved by investing in the brains of kidsin North Carolina schools. For example, Keller Independent School District in Texas implemented facility improvements in 2005. They saw an increase of 17.3 percent on test scores while the average daily attendance rate rose to 97 percent.

Lack of oxygen-rich fresh air in our state’s school buildings lowers student learning one or two letter grades each year for 12 consecutive years. The Environmental Protection Agency (EPA) estimates that half of all school buildings in America have indoor environmental pollution bad enough to lower learning. This condition changes the economics of a child’s life forever, perpetuates poverty and dependency on social welfare programs, and increases the crime rate.

Some of the roots of this problem/opportunity in our schools are found in our state’s history.  After the Civil War, the North Carolina legislature devised a series of laws that made it difficult for poorer parts of the state to build new schools. In particular, they made school building construction and maintenance the financial responsibility of the local school district. Richer (mostly white populations) school districts could build nice buildings, but poor school districts would not have the resources to. These 200-year-old laws still exist today.

Public Schools First NC, a highly-regarded not-for-profit located in Raleigh, has written a great summary of this history.

In 1994, because some financially-challenged North Carolina counties’ school buildings were in terrible shape, a group of concerned parents from five poor counties came together and sued the state legislature to change these 200-year-old laws. The parents won. The North Carolina courts ordered the legislature to alter the system of school funding for facilities’ construction and maintenance, so all students had equal access to a sound education.

Rather than doing as the court ordered, state politicians have used legal maneuvering for 25 years to prevent the use of state money to fund school systems with an equal amount of money per student in all schools across the state.

They are still blocking it, with serious cost to our society, because the obsolete old buildings, lacking ventilation, lower learning so much that 12% of the students do not graduate.

Our public high schools have a graduation rate of 88%.

This has serious financial implications, because failing to graduate results in an average annual income of $23,842, compared to a graduate’s earnings of $30,106. The 12% of North Carolina students who fail to graduate from high school earn an average of $6,264 less annually. On average, these same non-graduates qualify for various kinds of taxpayer-funded food and other assistance, and high school graduates do not qualify for it nor need it.

The savings to the state budget caused by investments in improving graduation rates are not counted in Return On Investment (ROI) calculations.

And while you are considering rate of return, another recent allocation of investment funds should raise your eyebrows. 

In 2024 our legislature passed a law that took $432 million dollars away from public schools to fund students attending private schools. This is called “Opportunity Scholarships,” or a school voucher program.

The numbers grew to $625 million for school year 2024/25 and are now budgeted to go to $800 million in 2031/32. 

In budget year 2024-25, using this taxpayer money, the North Carolina legislature invested in 642 private schools by subsidizing 80,470 student Voucher Recipients at a one-year total cost of more than $432 million dollars. Approximately 73% of the schools receiving voucher support were religious schools. The majority of the funded students were affluent.

Your accountant would be shocked to learn that no audit is required on disbursed funds. And unlike public schools, there is no requirement that assessments be made of the private schools’ success at year-after-year learning. 

Funding schools and supporting private sector economic growth is not an either/or choice. As other states have demonstrated, you can do both – and in many cases investing in K-12 pays a higher rate of return.

Why don’t we?

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Dr. Francis P. Koster is a retired pediatric healthcare administrator and the President of The Optimistic Futurist’s partner organization, The Pollution Detectives, Inc., a not-for-profit that lends meters and gauges to folks who want to make sure their kids’ schools are safe and optimal for learning. Learn more on the website or send an email to