‘Difficult decisions’: Durham County and school leaders discuss upcoming budget

During their quarterly meeting on Tuesday, Durham County Commissioners and School Board members met for a long discussion about how to fund the school district's needs.

Factors for how to fund the school district include slowing job growth in Durham and nationwide, declining enrollment at DPS, and a loss of federal dollars.

Durham Public Schools' early budget discussions

Durham Public Schools CFO Jeremy Teetor started his presentation with the good news; the district completed two audits in one year, which show significant improvement.

DPS has also added money to its fund balance.

Challenges the district faces include declining money from the state.

“We're also bracing for two new charter schools opening in the next year and the potential migration of 1000 students to those charter schools,” Teetor said. “That will increase our responsibility by about $6.6 million."

DPS does not yet have a specific budget ask, with more meetings scheduled for March, but Teeter said they expect with 5% personnel cost increases from the state, retirement and health insurance increases, and rising utility costs, they will likely request at least $8 million more for their continuation budget. With the addition of the charter schools costing $2.8 million, their ask may be around $10.89 million.

Teetor listed other asks in the possible expansion budget, including salary increases for classified staff to get them up to County minimum wage levels, bonuses for transportation safety assistants, and salary scale reclassifications for occupational and physical therapists.

“It's not lost on us, the historic investments Durham County Commissioners have made in Durham Public Schools,” Teetor said.

Durham County's Budget Outlook

Durham County Budget Director Keith Lane led the County presentation, telling school board members and County Commissioners that the near economic future is “cloudy and concerning.”

He repeatedly used the term “inflection point,” alluding to lost jobs in Durham County, and a public-adjacent economy, meaning top employers include public entities such as the County and School District that rely on money from federal and state resources.

"It's that job growth and income growth that funds sales tax growth. It empowers the buying of houses, it empowers the ability to pay property tax,” Lane said.

Lane showed graphs illustrating the increase in funding each year for DPS from the County.

"Can that level of growth continue every year from Durham County?" he asked. “That's a profoundly different level of funding over the last five years compared to the five years before. Can we afford that?”

Lane also pointed to the decline in enrollment at Durham Public Schools.

"There are less students now in Durham Public Schools now than there were almost 25 years ago,” he said.

Lane explained the gap between the County’s revenue and DPS’ ask.

"You all have asked for $10 million plus, in continuation needs; that's not a single new dollar for any requests. That's already more than we have available revenue to support. Difficult decisions are coming for all of us."

County Commissioners also emphasized the hard decisions, pointing to the recent reevaluation of property in Durham County.

“Now, we're in a situation where we may have to go back to them in the form of a tax hike, and I'm asking that my colleagues think hard and long about what that looks like for our residents,” Commissioner Stephen Valentine said. “I don't want to put any more pressure on our residents than that needs to occur."

"I know there are a lot of demands on you all that have come out of the meet and confer process, but we also have to be realistic, and as you can see, it's just literally not possible,” Commissioner Wendy Jacobs said.

Jacobs said the County understands the need to increase pay for classified staff.

“That is a no brainer. We have to figure out how to do that,” Jacobs said, adding that it may take a couple of years.

School Board members and staff point to the costs that continue to rise.

"Even with less students, we're paying more for retirement, insurance, utilities, salaries,” School Board Member Bettina Umstead said.

The School Board has a work session scheduled for Thursday, March 12th, along with another meeting on March 26.