More cuts and reversions likely for local school district

Mar 8, 2010 — The Free Press (Kinston, N.C.)

Chris Lavender

Mar. 8, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- SNOW HILL -- Greene County Schools will likely be required to return nearly $700,000 to the state during fiscal 2011, according to Superintendent Patrick Miller.

Miller said the state had already reverted $513,000 from his school system during the 2009-2010 school year for another mandatory reversion due to the state's budget crisis. Miller asked three local members of the state General Assembly this week to do all they could to limit the amount mandated in the new reversions.

The mandated reversions by the Department of Public Instruction have impacted every public school district in the state, creating further strain on school districts' budgets.

Rep. Van Braxton, D-Lenoir; Sen. Don Davis, D-Greene; and Sen. Edith Warren, D-Pitt attended a legislative dinner this week at Snow Hill Primary School to discuss how the state planned to meet the districts' educational needs and successfully balance the state budget for fiscal 2011.

"The reversion could be 35 percent more next year than it was last year," Miller said. "It could be a disaster for Greene County Schools and for districts across the state."

Greene County Schools has also experienced a cut in its capital outlay funding source through half-cent sales tax money. Beginning last October, the funding formula for the Article 42 sales tax was changed from distributing the tax revenue from the districts average daily membership to a point of sale formula.

According to Miller, Greene County Schools capital outlay budget from Article 42 sales tax will drop from $700,000 to $240,000 in fiscal 2011. The school district collects about $400,000 annually from state education lottery proceeds, which is also used to fund capital outlay projects.

Miller said his district still plans to build a $15 million intermediate school in the coming year, which will open for the 2012-2013 school year.

There are a few signs that the economy is improving but unemployment still remains high in Eastern North Carolina, with unemployment rates near 11 percent in Greene County.

"It's going to be another tough year," Warren said. "Our collection figures are way down. They say the recession has bottomed out but employment growth has not begun to move forward."

Warren said the $1.8 billion in federal stimulus money to the state will soon run out as well, as the 1 cent temporary sales tax designed to alleviate the $4.5 billion shortfall in fiscal 2010 ends. The loss of this short-term revenue will force lawmakers to dig deeper to find ways to meet the state's needs.

"Education is still a top priority for us," Warren said.

Lawmakers said it's still too early to say how large the state's budget deficit will likely be for fiscal 2011. Davis said some estimates place the deficit currently between $500 million and $650 million while personal and corporate tax collection continues through April.

Once these tax collections are completed, lawmakers will have a better picture of the state's short-term financial outlook, Davis said.

"We will have to go back and make some adjustments," Davis said. "We are still waiting for the economy to recover to help bridge some of the budget gaps."

The fiscal 2009 budget for the state was $21 billion followed by a $19 billion budget for fiscal 2010. Warren said the fiscal 2010 budget included a $1 billion federal stimulus allocation and another $1 billion allocation from the temporary 1 cent sales tax hike.

Education funding comprises about 55 percent of the state's annual budget and will likely see another significant round of cuts in the upcoming General Assembly session. Miller said he was advised by the state to expect cuts between 3 and 5 percent in fiscal 2011.

"Education is the biggest part of our budget," Davis said. "Everything will be on the chopping block."

Cost savings are a premium across the board and Braxton, who serves on the state health planning board, urged state employees to consider paying up to $100 towards their annual health care plan.

"Other states subsidize part of their employee's family health plan," Braxton said. "If we lower the cost of coverage, then we will see more buy-in."

Braxton said teachers funded through state dollars and other state employees have resisted the idea to pay some of their health care costs.

"State employees have said they don't want to pay a dime," Braxton said. "If they stick to that, I don't know what we are going to do."

Braxton said the state's health care plan was shored up several years ago with $250 million and co-pays were raised but soon the plan will likely experience another crisis and coverage could suffer.

"There are ways to make it more stable," Braxton said.

Chris Lavender can be reached at 252-559-1078 or clavender@freedomenc.com.

Newstex ID: KRTB-0235-42667624