March 19, 2009

Putting a face on budget cuts

Debates about next year’s budget now dominate local school district discussions, with Wake County reaching a point where specific programs staffed with real people can be identified as potential cuts.

The problem for both employees and school district leaders at this point is trying to sort out the difference between a potential cut, a likely cut and a final decision. In some cases, final decisions could still be several months away.

“This puts a face on it,” school board member Lori Millberg said during a discussion this week about eliminating Communities In Schools site coordinators at 10 schools. “We know those CIS coordinators. But we also have a whole bunch of teachers with terminating contracts and they have faces and stories, too.”

In its simplest form, the budget challenge comes down to declining revenues and a tight timetable for making decisions.

Superintendent Del Burns has recommended the board ask Wake County commissioners for $317 million. That is almost identical to the amount of money the district would have received this year before the county was forced to make mid-year cuts of about $5.7 million.

Commissioners have made it clear that coming up with $317 million is going to be difficult as the recession drags on, even though they know the school district will face higher utility bills, the expense of adding up to 2,300 new students and any increases in benefits and salary dictated by the state.

But an even larger piece of the puzzle is controlled by the General Assembly, which provides more than 60 percent of the revenue for Wake County’s schools.

This is where the timing comes in.

The new fiscal year begins July 1. The first year-round school opens July 7. It is fairly common for state lawmakers to wait weeks or even months beyond that time to approve a budget. This year, that forces Burns and the school board to play a high-stakes waiting game.

With the state also facing a big drop in tax revenues, the superintendent has purposely built a 5 percent cut into his recommended budget for next year. It’s an approach that school board member Ron Margiotta went out of his way to publicly support last week during a budget discussion.

If the state should cut local school revenues less than the 5 percent, the district can quickly refill the positions. “But we don’t want to hire people and then be forced to let them go,” Burns said.

That leaves people like the CIS coordinators on the bubble. So are some first-year teachers, veteran teachers who have come back to fill vacancies after retirement, central office employees and others. They are part of a group of 1,496 employees who work under the terms of “terminating contracts” that technically must be renewed each year.

Money will be saved in other areas such as construction delays, fewer bus replacements, less travel and dozens of other operational items. But those cuts just look like numbers in a binder. The cuts that hurt most – even when they don’t save as much – are the ones that have a face.

Perdue vows to protect education
 
Local school boards have roughly one month before they are expected to present their budget requests to county commissioners. State legislators, on the other hand, are just beginning their debate after receiving Gov. Beverly Perdue’s budget recommendations this week.

Perdue’s $21 billion budget offers a small increase in public school spending, but her recommendations drew immediate criticism from both Democrats and Republicans. Before the debate ends, they must all agree on how to fill an anticipated deficit of $3.4 billion in the coming year.

Much like budget discussions at the local level, the process can quickly become a confusing mess of numbers. But for those who want to follow along and don’t have all day to spend on the task, there are a few key debates that will offer insights.

Cigarettes and alcohol: Most of the roughly $580 million in new revenue will come from these sources. These “sin taxes” traditionally aren’t an easy sell in North Carolina’s legislature, but balancing the budget will be tough without them.

Stimulus money: The number to remember is $1.7 billion. That’s how much the governor is counting on to help fill a large part of the revenue shortfall.

Spending cuts: The figure here is $1.3 billion and this is where most of the action will take place. Because the classroom fares better than other areas in Perdue’s budget, school cuts are most likely if other programs are restored. Not all areas of education are equal in the governor’s budget. Central office functions at the local level are already penciled in for a 5 percent cut, unfilled slots from former Gov. Easley’s More at Four preschool program would be eliminated and private college tuition grants would be reduced.

Noteworthy

.…Several articles were published recently in the editorial pages of The News & Observer supporting the school district’s willingness to consider diversity when making school assignments, including one written by Tom Oxholm, a former school board member and former member of the Wake Education Partnership’s Board of Directors. His guest column can be found here. A separate piece by editorial page editor Steve Ford on the same topic can be found here.

….While North Carolina’s lawmakers must figure out how to address a significant budget gap, it doesn’t take long to appreciate how much worse it could be. California plans to cut 26,500 teachers due to budget shortfalls, Georgia is considering a six-day furlough of teachers to help balance its budget and the town of Pontiac, Mich., issued layoff notices to every teacher in its school district this week. School officials said enrollment and revenues have dropped so dramatically in Pontiac that it is easier to lay everyone off and rehire those who are needed instead of working through cutbacks. The teachers’ union is working with the district on the plan.

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Wake Education Partnership is a 501(c)(3) non-profit created in 1983 to support public schools, in part by educating the community on current school issues. Most of its financial support comes from local business. Please contact Tim Simmons, VP of Communications, at tsimmons@wakeedpartnership.org with comments or questions.