State could demand more money from school systems

The state of North Carolina, struggling to fill an estimated $3.2-billion budget deficit, this week will order schools to send unspent state funds back to the N.C. Department of Public Instruction.
Burke County Public Schools expects the state will demand $392,000 to $545,000 from this year's budget.
With about eight weeks remaining until the fiscal year ends June 30, the schools haven't spent some money, but they've committed almost all of it, mostly to personnel.
"There go all our summer programs," Finance Director Keith Lawson said Friday when he broke the bad news to Schools Superintendent David Burleson.
Lawson just returned from a meeting of other school finance officers and administrators in Raleigh. He and Burleson will update the school board today on the possible impact of the upcoming reversion order. Other than summer programs — already severely curtailed — they say there's almost nothing left to send back to Raleigh.
The school district already cut its budget when N.C. DPI earlier this year asked the district to "revert" $500,000. Then the state froze payments of lottery revenue and capital funds.
On the day after Easter, N.C. DPI announced an additional freeze, effective April 16, on noninstructional support for custodians, secretaries and clerical staff. Burleson and Lawson say it's fortunate they were at work (some school districts were on spring break). They transferred about $250,000 in local support items to state support before the freeze took effect.
The school district has three main sources of revenue. State funds, primarily based on enrollment, cover certified staff and instructional support. The federal government funds programs such as Title I and Title VI. Local support (ad valorem property taxes, fines and forfeitures) covers everything else, including some salary supplements, jobs the state doesn't support, school construction and maintenance.
Burleson and Lawson said almost everyone in the schools now is trying to avoid spending money on anything except educating children. They've sifted the school budget with the proverbial fine-toothed comb. Lawson and Associate Superintendent Rick Sherrill spent weeks in February and March having one-hour meetings with every single principal and director, listening to their suggestions for cuts.
"Basically, we said, 'Protect the classroom,'" Burleson said.
Everything else was subjected to close scrutiny.
The result was a 22-page document that details $6.2 million in cuts in the 2009-10 budget.
The cost-cutting already is well under way. In Lawson's finance office, they even reuse the copy paper, printing on the blank side.
When N.C. DPI's next reversion order arrives, Burleson and Lawson expect they will have to divert funds from the federal government's economic-stimulus package. Burke County Public Schools expects $1.9 million in stimulus money earmarked for Title I programs. The money was to be here in March. When it arrives, hundreds of thousands may go right back out the door to Raleigh.
Burleson and Lawson hoped to use the stimulus money to help compensate for next year's anticipated loss of state funds. Some of the federal money is earmarked for Title I programs at schools with high percentages of students receiving free and reduced-price lunches — a vital need in a county wracked by high job losses. Lawson and Burleson hope they can reduce the impact of losing stimulus money until 2010-11.
Meanwhile, the clock is ticking on next year's budget. The school district must submit its 2009-10 budget to the county commissioners by May 15.
Burleson describes the budgeting process as trying to hit a moving target while the state shifts funds, the governor orders furloughs and the General Assembly wrangles over next year's budget.
Burleson's worst fear is that the legislature will raise the student-teacher ratio by two pupils. Burke County could lose as many as 115 teachers from a certified staff of 1,000. He said the district would feel the impact for 13 years.
Lawson said there were no predictions in Raleigh about when the legislature will finalize the education budget, except one:
"In all likelihood," he said, "we'll start the school year without a budget in place."
And that could mean another hair-raising year of making budget adjustments on the fly, just as the Burke County schools are struggling to do now.