Education

Wake schools consider outside revenue-generating measures

Posted May 26, 2010 9:06 p.m. EDT
Updated May 26, 2010 11:05 p.m. EDT

School Funding (Generic)

— Wake County schools are looking at $40 million less in funding for the upcoming school year, because of low revenue and state-mandated budget cuts.

The school board’s Finance Committee was updated Wednesday on prospects for the system’s 2010-11 budget in light of previous and recent reductions in state support.

"There is uncertainty at this point,” David Neter, the district’s chief business officer, said.

Because the district can't get all the money needed, talk is turning to ways of generating revenue from outside sources. School districts across the United States are facing budget shortfalls and many are finding creative ways to offset financial losses.

In Anne Arundel, Md., Wake school system's financial officer Mark Winters said, vending company contracts are bringing in extra funds. Seattle, Wash., schools generated $2 million charging for parking spaces. San Diego, Calif., is looking into putting ads on their Web site, and Boston, Mass., is considering ads on school buses.

Wake schools already have one outside revenue-generating measure, a vending contract with Pepsi that brings in around $100,000 a year.

"We are paid a rebate back on the drinks for every case, so we actually get dollars back,” Winters said.

To bring in more money, Wake school board members have considered naming rights to ball fields.

"But there is not a huge amount of interest,” school board member Keith Sutton said.

Interest is increasing for creating a foundation, a nonprofit to raise money through donations. Contributors could use it as a tax write-off.

Charlotte-Mecklenburg Schools has a foundation that raised nearly $2 million, and in Jefferson County, Ky., more than $4 million was generated through a nonprofit.

“I think it is feasible. I think we are going to take a closer look at it,” Wake School Chief Business Officer David Neter said.

Neter said new cuts in Gov. Bev Perdue’s budget amount to $19.7 million – just about the $20 million the Wake school district had expected after the governor announced all state agencies would have to make new cuts, including the Department of Public Instruction.

The new reductions include $13.2 million in what are called discretionary reductions, meaning the school board can decide what to eliminate. About another $6.5 million comes in mandated areas, including less state funding for step increases in salary for teachers, support for transportation and changes in the amount the state pays toward retirement.

The Wake school board last month passed a $1.4 billion budget proposal that included $20 million less in state funding that already was known.