House and Senate leaders are working behind closed doors to come up with a final budget for next year and reportedly the two sides are close to an agreement, though there may still be differences on raises for state employees and retirees and how fast to phase in another tax cut.

But dozens of important policy decisions are part of the budget negotiations too and one of them is vitally important to thousands of public school teachers and students and their families across North Carolina.

The House budget included a provision changing the way the state calculates the letter grades it assigns to each school as part of the relatively new and flawed A-F grading system.

The grades are currently determined by a formula that counts student performance on standardized tests for 80 percent of the calculation of the grade and growth in test scores for 20 percent.

That predictably has resulted in most low-income schools receiving a low grade, no matter how much students improve from year to year. More than 90 percent of the schools that have received a D or F are schools with more than half of their students eligible for free or reduced lunch.

That means the grades aren’t actually an indicator of how schools are doing. They are a measure of how many schools have a majority of students from low-income families.

Even many supporters of the troubling grading system have acknowledged that the formula is flawed and unfairly punishes low-income schools. Last session the House moved to change the formula to 50 percent performance on tests and 50 percent growth but the Senate refused to go along, so low-income schools and their students were unfairly stigmatized for another year.

Now the House is trying again with its budget provision to change the formula to 50-50. The Senate did not include the change in its spending plan so its fate is up to the backroom negotiators.

It ought to be an easy decision. Regardless of how hard the students and the teachers at D or F schools work and improve, they are branded as failures, with a D or F slapped on their doors.

But there’s something else going on here. The rigid formula is part of the plan devised by some people crusading to dismantle traditional public schools and siphon the taxpayer money off to unaccountable private and religious schools and the growing number of out of state for-profit companies running charter schools in the state.

This week the right-wing and misnamed group Americans for Prosperity used the grading system to claim that 500 public schools are failing. That is part of the rationale for the group’s support of legislation creating “Achievement School Districts” that could eventually turn over operation of struggling schools to a for profit company even though the scheme has failed to increase student achievement in other states that have tried it, most notably Tennessee. The company always gets it money though.

As the PolitiFact feature in the News & Observer recently found, the claim about 500 failing schools is misleading. AFP Director Donald Bryson told PolitiFact that the schools remain “broken education communities, systematically failing to teach tens of thousands of students without any path towards meaningful, long-term reform or improved achievement.”

That is absurd. Many of the schools branded with a D or F grade are improving, but since the formula only counts growth for 20 percent, many of them will remain designated as failures by the grading system, regardless of how the students are doing.

That allows groups like AFP to continue to demean the work that dedicated teachers and ambitious students are doing in those schools every day and helps AFP and other anti-public school groups build their case for vouchers and turning over more schools and more public money to private companies

That designation of failure bothered folks enough in the House last session that they changed the formula. The changes were not enough and neither chamber has a plan to invest additional resources and services to help the students and the schools that are struggling

But at least the House recognizes the problems in the grading system. Senate leaders do not or don’t care or like it the way it is because it serves their ultimate ideological aims.

The battle over how to resolve that disagreement between the two chambers may be a small part of the budget debate, but it has significant implications for hundreds of schools and thousands of hardworking teachers and students and families in North Carolina.

Chris Fitzsimon is founder and executive director of N.C. Policy Watch.

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Chris Fitzsimon

Contributing Columnist