Members of the Macon County Board of Education are faced with arguably the hardest decision the school system has had to make in years. With continued cuts from the state level, increased operational costs and a zeroed out fund balance, the school system will likely not have enough funds to finish out this year, and will inevitably have to make serious cuts in order to be able start school next fall.
During a budget work session Monday night, members of the Board of Education were told by Interim Superintendent Dr. Jim Duncan that in order to continue operating at the same levels come August, the school system would have to ask the county to add more than $2 million to the county's allocation for the school system budget.
Despite being in a deep recession, over the last five years the Macon County Board of Commissioners have continued to make education a top priority. Since 2008, Macon County has committed about $80 million to the school system, with about $34 million being allocated for general operating expenses and nearly $46 million for capital projects. This year alone, Macon County has dedicated $12,384,421 to the school system for current expenses, solid waste, teacher supplements and debt services. Out of the county’s overall operating budget for 2012-13, 28 percent of $44,275,869 was designated for the education system. With the county's main source of revenue coming from property taxes, nearly 50 cents of every dollar Maconians pay in property taxes go directly into the school system.
While the county has continued to support public education, state mandated cuts have slowly diminished the school system's fund balance causing devastating cuts to be proposed for next school year. Dr. Duncan worked with incoming superintendent Dr. Chris Baldwin and School Finance Director Angie Cook to look at all expenses that are paid for out of county funds, and determine what areas can be cut without directly affecting the quality of education children in the district receive.
Since 2008, the county has contributed an average of about $6.8 million a year to the school system's budget. Last year, the county contributed $6.9 million. Dr. Duncan informed the board that if no changes are made in the day-to-day operations, the school system would have to ask the county for an increase of $2,033,518 next year, making its total request from the county standing at $8,944,518. Because of the current state of the economy, and cutbacks on the county level, Dr. Duncan informed the board that while it was uncertain how much the county would give the schools, he was certain they would not fund the entire amount needed.
Dr. Duncan presented board members with a list of proposed budget cuts totaling $1,950,393 that would significantly lower the school system's budget, and leave them with asking the county for an $83,125 increase from last year's funds. “I tried to zero out the budget and make enough cuts to where we did not have to ask the county for any additional funds, but that just was not possible,” said Dr. Duncan.
Among the nearly $2 million in cuts proposed, a total of $1,088,118 includes instructional staff. The board looked at absorbing 11 teacher positions and 25 teacher assistant positions.
“If we look at not replacing teachers who are retiring, and not re-hire the current interim teachers we have, who have no expectation for employment after this year already, we eliminate all teacher assistants except for those who are in kindergarten classes, we will save another $618,077.”
Dr. Duncan explained to county commissioners during their joint meeting on Tuesday night that the teacher positions being proposed to be absorbed will not send any employees home. “We have people who are retiring and interims who were hired knowing that they would only be employed for a set time,” he said.
The teacher absorptions would be done based on the state requirement that classrooms have to have a 1:22 teacher student ratio. “We have very few classes with more than 18 students, so through some consolidations and rearranging, we can reduce the number of teachers we have without affecting the level of education we offer students,” said Duncan.
According to Dr. Duncan, the school system is operating at the same staffing levels this year as they were during the 2005- 2006 school year but are doing so with significantly less funds. Eighty-five percent of the overall school system's budget goes directly to school personnel. “Regardless of what funds the school system is able to secure, we can not continue operating with the staffing levels we currently have,” said Duncan.
Teacher positions are not the only thing on the chopping block. Dr. Duncan informed the board that if the school system closed two selected schools within the district, the budget would be reduced an additional $200,000. Right now, both Union Academy and Macon Early College receive grants to operate, and those grants pay for the majority of the expenses associated with the schools. Despite the grants, the school system pays about $100,000 extra each year for expenses incurred by the schools. Dr. Duncan proposed looking at closing those schools and putting those children in existing facilities in the district.
“We don't want to get rid of schools like Macon Early College, but we have to look at everything in our budget that we are asking the county to fund,” said Dr. Duncan. “This is the hardest thing I have had to do in my 44 years of school work.”
Board of Education members Gary Shields and Jim Breedlove questioned the legality of closing Union Academy because according to state statute, each district must offer an alternative choice to public education for the children who need it.
During the joint meeting, Commissioner Ronnie Beale noted that school closings are becoming all too common because of budget cuts. In Philadelphia, one school district is in the process of closing 37 campuses by June because of the inability to fund the operations in the district.
School athletics are also among the items being debated by the school system to be cut next year. Dr. Duncan proposed that the district eliminate all middle school athletics as well as co-curricular (non-revenue generating sports) throughout the county.
By eliminating middle school sports, the district stands to save $50,000. Elimination of co-curricular sports, which include sports such as wrestling, golf, baseball, softball, swimming and diving, would save the district $12,900 a year. Football and basketball are the only two sports in the county that generate a revenue and although funds earned through those sports are distributed to other sports, after those funds are disbursed, the district still pays an additional $12,900. Dr. Duncan explained that the reason why sports such as football were not looked at as being eliminated was not only because of the revenue it generates, but because those sports have contracts with other schools for games each year. If Franklin High School eliminated the football program, schools such as Brevard would charge for the cancellation.
“Athletics are one of the biggest graduation coaches we have,” said board member Stephanie McCall. “We would be better off getting rid of graduation coaches than to eliminate sports.”
The joint meeting with commissioners was mostly informational and was to let the county know what to expect in the last few months of the school's budget planning process. “These cuts are in no way an attempt to gorge any department or anyone, they are all just possibilities that we have to consider if we do not somehow have more money,” explained Dr. Duncan. “We don't want to do any of these cuts, but realistically speaking, we will have to do some of them.”
Beale pointed out that it is important to realize that school districts have no way of generating a revenue on their own, but instead they depend on funding from the state, federal and local governments.
By state statute, the state of North Carolina is solely responsible for the public education system. Beginning in 1933, the General Assembly voted to control all of the state’s public schools, making North Carolina the first state with such a system. The move to state control was made in the midst of recovering from the depression since local governments did not have the finances available to keep schools from closing.
While the county's allocation of funds to the school system has remained steady since 2008, the state's commitment to education has been drastically reduced. Beginning in 2008, the state began asking local districts to send back a portion of the state allotted funds in the form of a discretionary reversion. Each year the state would give funds to every district in the state, but then mandate that local districts decide where in the budget to cut and return that money to the state. In 2008, while Macon County received $25.9 million from the state, they were asked to return $174,039 of it. In 2009, the state reduced Macon County's overall allocation to $22.8 million and increased the reversion to 673,694. The reversion increased again in 2010 to $905,028; to $1,264,969 in 2011; $1,064,424 this school year, and Angie Cook predicts the reversion will increase again this year to $1,096,500.
For the 2013-14 school year, the total cost of the state's reversion, for all 117 school districts in the state, is projected to be $376,124,279, that is nearly a $400 million education budget cut mandated by state legislators.
In order to prevent the reversion from directly affecting education, Macon County and other districts in the state have been forced to dig into their fund balance, which has acted as a reserve in the past. This year, Macon County completely depleted the fund balance just to keep the doors open.
In addition to utilizing the fund balance and in order to meet the demands of the reversion, Macon County “traded in” teacher positions. This year Cook traded in 18 teacher positions, switching them from state funds to local funds, allowing the school district to meet the reversion. Those 18 positions increased the total number of teachers being paid for out of county funds to 52.
“We are hoping that the reversion will not happen, but that is hoping against hope,” said Dr. Duncan. “The reversion makes absolutely no sense, it makes no sense to give money then to take it back.”
Beale noted that fighting the reversion was the first step in fixing the district's problem.
State law mandates that school districts submit their budget to the county for approval on April 15 of each year. Last year, Macon County completed their budget, and while it was not easy, was able to turn in a balanced budget. After submitting the budget and getting the county's stamp of approval, in a midnight session of the state legislation a salary increase was approved for teachers. The 1.2 percent salary increase and additional benefit increase was mandated for the 2012-13 school year.
With the budget already finalized and in place for the school year, Macon County schools had to find funding to give the 52 teachers paid out of local funds the same increase the state paid employees received. Before the school year even started, Macon County schools found themselves in a $550,000 deficit.
In addition to the reversion and unfunded salary increase, Macon County schools were hit with another unbudgeted increase when Duke Power received a rate increase of more than seven percent. The rate increase came in the middle of the school year causing higher energy costs with no additional monies to pay for it.
The school district is also constantly battling gas prices. The state provides school districts with $2.79 per gallon of gas. With gas prices currently averaging $3.79, the county has to find funds to pay the extra $1 a gallon for gas to run busses. When gas prices go up, the state's allocation still remains the same, causing the burden to fall on local taxpayers.
According to Beale and Board of Education Board Chair Jim Breedlove, there is currently legislation in the General Assembly that would move the responsibility of school transportation entirely to the local level. It would become the county's responsibility to pay 100 percent for gas for yellow and white buses, but the county would also be responsible for the maintenance and purchase of new vehicles as needed.
“Our schools are the state's responsibility and we can not keep assuming the state's responsibility on the local level,” said Beale.
Because of the cuts over the last several years, the county has stepped up to continue offering a high standard of education for students. The North Carolina statewide average on per pupil student is $1,893, while Macon County surpasses that by devoting an average of $2,430 per student, making Macon County 15th out of 117 districts in the state for per pupil funding.
Macon County is 56th in the state for state funding and 73rd in the state for federal funding, and with the three funding sources combined, Macon County falls 40th out 117 school districts.
The school system has until April 15 to submit a budget to the county. County Manager Jack Horton suggested that the school system's finance director meet with the county's finance director and begin working on thoroughly deliberating the proposed cuts and areas in the budget that can be improved on.
None of the proposed cuts are definite, and both the county and the school board vowed to do everything possible to avoid as many cuts as possible.
Editor's note: The Macon County News will continue looking at the school system's budget in next week's publication, including an in-depth look at North Carolina's Education Lottery Funds as well as proposed legislation endorsed by Senator Jim Davis to change the way the state allocates funding for teachers in rural schools such as Nantahala.