Board Cuts $11 Million Responding to State and Local Revenue Shortfall

December 2, 2008 - The Board of Education cut $11 million from its budget to return funds to the NC Department of Public Instruction and Wake County Commissioners, both short of revenue as national economic woes begin to affect North Carolina.

“Its clear to me there will be a revenue shortfall,” Superintendent Del Burns told the school board today. “Recovery in our community will take time. We are looking to address this current reduction and are mindful of the impact it will have on our future budgets.”

The state budget reductions include: $3 million reduction in classroom materials and instructional supplies (with $2 million of that shifted to local funding); $998,000 in at-risk student funding; $750,000 in school technology funding; $400,000 in lapsed salaries savings from Career and Technical Education; $240,413 from the elimination of out-of-state travel, the increase in the hiring freeze for Central Service vacancies from 60 to 90 days and base budget reductions of 3 percent in locally funded Central Services non-personnel accounts; and $90,000 in lapsed salaries from Academically Gifted funding. The state reductions total $5.4 million.

Chief Business Officer David Neter said the at-risk student funding and school technology funding involved carryover funds from the prior year that was larger than anticipated. Neter said the savings from lapsed salaries involved vacant positions.

The county budget reductions include: $3,236,527 net savings due to enrollment growth being lower than anticipated; $1,513,473 from the elimination of out-of-state travel, the increase in the hiring freeze for Central Service vacancies from 60 to 90 days and base budget reductions of 3 percent in locally funded Central Services non-personnel accounts; $950,000 in deferred spending for mobile units, vehicle replacements and bus purchases. $2 million of fund balance will be appropriated in the capital outlay fund. This will allow the county appropriation allotment in the capital outlay budget to be reduced by $2.0 million. The local reductions total $5.7 million.

State funding was reduced by 1.45 percent for Central Services and 0.73 percent for schools. Local funding was reduced 2.88 percent for Central Services and 0.49 percent for schools. Neter said administrators worked to minimize the impact of the reductions on the classroom and on employees.

“What we’re seeing with these reductions is the elimination of flexibility in our budget,” said Dr. Burns. “We have to continue to be attuned to what happens with the state and county budgets and the impact that will have on school system funding.”

Dr. Burns explained to the board in the Nov. 18 committee of the whole meeting that all school systems across North Carolina are required to revert a portion of their state appropriation in order to address reduced state revenue. The WCPSS portion of that is approximately $5.4 million. WCPSS must report back to the state by Dec. 19 plans for reducing funding by that amount.

When Wake County Commissioners met yesterday, they asked the school system, Wake Technical Community College and Wake County departments to reduce budgets by 1.8 percent. The school system portion of that reduction is approximately $5.7 million. Earlier, Wake County Manager David Cooke had made the school system aware of revenue shortfalls that were impacting the county and Dr. Burns had advised the school board of the county funding issues at the Nov. 18 meeting, also.

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