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School cuts loom unless legislators act

Posted March 19, 2012 12:01 a.m. EDT
Updated March 19, 2012 7:26 p.m. EDT

— Superintendent Eddie Ingram began warning Franklin County Schools' teaching assistants after looking at the budget cuts his district could face this coming summer.

“What we have told folks during the course of the year is, if they have an opportunity for another job, they may want to take advantage of it. Because they may not have a job here next year,” he said.

One of the state’s “low wealth” school districts, with about 8,600 students, Franklin County relies heavily on state and federal funding. So his district is particularly vulnerable to two funding cuts built into the state budget that could take effect July 1.

If lawmakers don’t make changes when they hold their May budget session, school districts will have to absorb $332.6 million in cuts across the state. That would amount to roughly 4 percent of the funding state taxpayers put into education this year and comes on top of hundreds of millions of dollars taken out of school budgets over the last three years.

Republican lawmakers who control the General Assembly say they would like to blunt the effect of those looming cuts. But they cannot say how they'll do that, and they've rejected outright Gov. Bev Perdue’s call for raising the state sales tax.

Perdue, a Democrat, insists a tax increase is the only way to make sure local schools don't lose more teachers than they have already. She starts a month-long series of speaking engagements on behalf of her plan Monday in Charlotte.

"I'm not picking a fight with them. Quite frankly, I'm trying to stand up for the children," Perdue said Sunday afternoon. She later added, "Education is the difference-maker for children, and families, and economic development."

Districts like Franklin County are caught in the middle of this political stalemate.

“Unless we get some relief, some people will be losing their jobs,” Ingram said.

Specifics vary in each of North Carolina’s 115 school districts, and some administrators say they’ll be able to avoid job losses – this year. But virtually all will take steps they would rather not, such as making bus routes longer, spending from savings, and declining to fill positions when employees leave.

Perdue pushes school funding in tour

Perdue will speak with business leaders at a round-table in Charlotte Monday and is due for an appearance in the Triangle later this week. Both appearances will focus on K-12 education.

In coming weeks, Perdue told WRAL, she will will make similar pitches about the importance of funding for community colleges and the state’s university system. All of that will culminate in the release of a budget proposal that would raise the state sales tax by three-quarters of a penny.

In most of the state, that would raise the sales tax from 6.75 percent to 7.5 percent, or $7.50 on a $100 purchase, excluding certain items such as groceries.

Perdue staffers estimate the tax increase would bring an additional $750 million to $850 million into state coffers. And some polling, including a February Elon University Poll, indicates the idea may be popular with residents. However, any tax increase has been a complete non-starter among GOP lawmakers.

"The people of North Carolina are willing to invest for education," Perdue said.

Asked why she is pushing for a tax increase legislative leaders resist, Perdue said she hopes public pressure will help change their minds. 

GOP: No talk of taxes

“There are no plans at this point to increase sales or income tax,” said Sen. Pete Brunstetter, a Winston-Salem Republican and a lead budget writer in the Senate.

Republicans took control of both the House and Senate for the first time since the mid-19th century in January of 2011. They inherited a recession-battered economy and a state budget that spent more than North Carolina would collect in taxes. Most GOP lawmakers had run on a pledge to lower taxes.

By June, they had written and passed a two year budget plan – overriding Perdue’s veto with the help of a handful of House Democrats – that allowed a temporary 1-cent sales tax to expire.

Traditionally, lawmakers would rewrite much of the two-year budget before it takes effect in July of this year. Brunstetter said that this year’s adjustment would be modest.

“There’s going to be very, very little money to do anything different from what we had in the two-year plan,” he said.

State tax collections are running $145 million ahead of projections, less than half of what would be needed to bridge the $332.6 million in new school cuts scheduled to kick in July 1.

However, there’s no guarantee tax collections will continue to outpace expectations. And other government programs, most notably the state’s Medicaid insurance program for the poor and disabled, will be competing for any surplus.

“The cliff really is coming with that money going away,” said Katherine Joyce, assistant executive director with the N.C. Association of School Administrators.

Schools lose state and federal funds

The funding cliff Joyce is talking about was created by two efforts intended to help the state government and school districts cope with the downturn in the economy.

Flexibility cuts, or reversions, were a device first created when Democrats controlled the General Assembly. Under a flexibility cut, a school district is given an allotment of money based on the number of students it serves. It is then ordered to immediately hand back part of that allotment.

Rep. Bryan Holloway, a King Republican and a key leader on education issues in the House, said that system allows local schools to decide what they can live without.

Using that flexibility, Holloway said, school systems have found ways to reduce costs that do not affect the classroom. And he is convinced that schools can cope with the loss of EduJobs money in the same way.

“I just don’t think every single cent of that goes toward real jobs,” Holloway said.

But school administrators point out that 85 to 90 percent of their operating budgets go toward salaries and benefits.

“That’s a crazy statement,” Franklin County’s Ingram said of Holloway’s assertion. “We’re a people business. We can’t cut enough paper clips out of the budget to come up with $3 million.”

Other school administrators agree funding cuts have and will continue to force them to eliminate positions, freeze hiring and contemplate layoffs.

“There’s no logical way a system can take those kinds of cuts without affecting personnel,” said Ricky Lopes, associate superintendent with the Cumberland County school district.

School systems had been able to blunt the effects of discretionary cuts by using federal EduJobs money, grants created as part of the stimulus specifically to keep teachers employed.

That funding will be used up by the end of this summer. At the same time, the two-year budget increases the amount of the flexibility cut school districts will be asked to hand back to the state.

The bottom line: $332.6 million in money schools could use in the current fiscal year that they will not have after July 1.

Sample cuts:

School systemEduJobs value in FY 11-12Jobs funded by EduJobsDrop in funding
Cumberland$10,698,156198.66$13,321,245
Durham$6,301,336124.36$7,920,364
Franklin$1,717,44849.33$2,151,753
Union$7,659,270204.11$9,652,182
Wake$28,260,750 548.07$35,567,263

“I would like to do away with as much of that discretionary cut as possible,” Holloway said. But it is unclear where the state might find the money to do that, and Holloway would offer few specifics.

To a person, Republican leaders say they must first see revenue results that usually become available in late April before they offer firm plans. Economists who work for the legislature warn that the economic recovery is still weak and could be stifled by any number of factors, including rising gas prices. That means any “April surprise” is likely to be a bad one for schools.

Legislators want proof from schools

“As far as the state budget goes, we’ve added teachers,” said Sen. Jerry Tillman, a key figure in education policy and budget writing in the Senate.

This is a fact that Republicans have been hammering on for much of this spring. While true, it falls short of the complete picture.

There are actually 915 fewer public school teachers across the state compared to last year due to federal and local cuts. And many of the teachers added by the state had been paid for in prior years from other sources of money that expired.

The impact of losing EduJobs money is also hard to see if one just looks at the state budget overview.

Senate President Pro Tempore Phil Berger, an Eden Republican, points out that if you look at the state budget, education funding holds roughly steady between this year and the year that begins July 1.

That's because EduJobs money is accounted for by local school districts, and doesn't show up as a line item in the state budget. Also, growing enrollments drive the amount of money schools districts are due to receive up, even as an increased flexibility cut takes away those gains. 

Republicans like House Speaker Thom Tillis said last year they would call any superintendents who claimed they were having trouble staffing their classrooms to testify before legislative oversight hearings. There has been no need for what Democrats predicted would be a mass layoff of teachers, Tillis and other Republicans say, since most of the jobs lost were unfilled positions.

Those oversight hearings have been slow to develop. The first is scheduled for April 19, about a month before lawmakers enter their May budget adjustment session.

Holloway and Rep. Linda Johnson, a Kannapolis Republican, run the Joint Legislative Oversight Committee on Education with Tillman. Both said they don’t know which superintendents will come or what they will say.

It’s likely the messages will vary as they did when WRAL asked school officials how they would cope with the planned additional funding cuts, should they come to pass.

Franklin County’s Ingram said that the EduJobs money had paid for 50 of his district’s 115 teaching assistants. Many of those people work with one-on-one or in small groups with students learning to read, he said. Without a replacement for EduJobs, most of those assistants would have to be let go.

Cost to keep teachers falls on counties

Other school systems are hoping their county commissioners will help them. Both Wake County and Durham County schools have asked for additional tax dollars from their county governments, which are cash-strapped themselves.

In November, Durham County voters approved a quarter-cent local sales tax to help pay for education. It’s less clear where extra money for Wake County schools might be found.

”We cut people hard last year," said Wake County School Superintendent Anthony Tata. "We cut down into the marrow of the bone last year and we took some pretty significant cuts. We are as lean, I think, as we can possibly be.”

Tata said his top priority would be protecting teacher jobs.

Jeff Nash, a spokesman for Durham County schools, said the district will focus on keeping teachers. But that means school buildings will go without regular maintenance, computers in classrooms will fall further out of date and children who ride the bus will spend more time in traffic.

“It’ll be great if we can keep our teachers. It would be greater if we could give them some supplies,” Nash said.

Like Holloway, Berger said he's seen information that suggests the loss of EduJobs will not be felt squarely in the classroom. More than half of the federal money, he said, has gone toward administrative costs.

But according to information from the Department of Public Instruction, EduJobs alone accounts for more than 5,400 positions throughout the state. And superintendents say that the cuts will affect the classroom.

"The quality of education is going to suffer if these cuts go through," said Ed Davis, superintendent of Union County Schools. He said the school district, like the state, still has to work through its budget, so nothing is final.

But he estimated the $9.9 million Union County will lose in state and federal money is the equivalent of 97 teaching positions plus 150 teacher assistant positions.

"It'll be a big deal this year," Davis said. "There will be some teachers that will be let go, and lots of teacher assistants."

Cumberland County will be able to offset the cuts by using its fund balance, the equivalent of a government’s savings account, Lopes said. But that will only work for one year. After that, there won’t be enough savings to fully offset the state and federal cuts.

“It’s not a sustainable revenue source,” he said. To avoid teacher layoffs in the future, he said, more funding will be needed.

Other districts were circumspect about the costs and their plans. Terri Sessoms, a spokeswoman for Johnston County Schools, refused on behalf of administrators there to talk about potential cuts.

Joyce, of the school administrators association, said many school leaders don’t want to worry parents or teachers. And some, she said, may fear that speaking out could bring reprisals from lawmakers.

“But the truth is, long-term, they’re going to have fewer people in the classroom to deal with students,” she said.