North Triangle News

Projected state revenue shortfalls related to COVID-19 will likely force North Carolina schools to make tough decisions for the upcoming budgets that aren't clear at this time. 

State lawmakers and finance experts predict the state's 2020-2021 budget will have $1.5 to $2.5 billion wiped out because of revenue declines, General Assembly Chief Economist Barry Boardman told thinktank Civitas Institute in April. 

If North Carolina's revenue drops $2 billion for 2020-2021, for K-12 school districts that equals an 8% cut in overall funding, according to Civitas Institute. North Carolina public schools receive approximately 63% of their funding from the state.

As an example to understand the financial impact schools may face, Civitas used the Forsythe County Schools as a model. The state awarded the district $335 million in the 2018-2019 school budget, according to Civitas. The organization theorizes that an approximate 8% cut would result in Forsythe losing $27.8 million in state funding — money that would cover salaries for 370 teachers. 

The state's anticipated revenue decline is partly tied to fewer tax dollars from main sources, according to local media outlets and places like Civitas. Statewide shutdowns of nonessential businesses to help slow the spread of COVID-19 also meant that many retailers were not able to sell their products and collect the sales tax. The temporary economic restrictions also saw people who were out-of-work not spending as much. 

However, it's not all bad news for public school districts. North Carolina received approximately $378 million from the CARES Act, Civitas reported, which is for education, plus an extra $95.6 million in emergency relief funding that the governor can award to school districts. 

Though what solutions lawmakers and municipal-level education officials can take to absorb revenue losses or generate more revenue aren't clear yet, Civitas suggested options in its analysis. 

One suggestion is allowing school districts to carry over funding from the previous year. School budgets should have accumulated some funds since closed in mid-March. Reevaluating recurring expenses and instituting hiring freeze could also add to savings. 

The majority of a school district budget pays for salaries and benefits. Civitas wrote that school districts should be able to determine their own class-size caps and staffing ratios. "Empowering school districts to make decisions on the number of teachers and other instructional personnel can produce savings and provide districts a greater sense of ownership of the services they provide," Civitas wrote.

Districts also should be given more flexibility in teacher pay. Create pay schedules that tie rewards to productivity and effectiveness. Offer incentives for hard-to-staff subjects and offer pay for teachers who mentor other teachers. Civitas also said districts should be free to set their academic calendar based on the needs of the community.

Last year, North Carolina spent $3.1 billion on benefits for public school staff, Civitas wrote. Savings can be had by asking employees to shoulder a larger burden of their healthcare expenses. Another suggestion is opting to not provide pension as a benefit, instead of giving employees a variety of benefits to choose from.

The crisis has highlighted that not all school districts in North Carolina have equal access to technology. Districts can work with local governments to ensure rural areas are equipped with broadband. Districts can also review course offerings and determine if students could or should take courses at a local community college in order to free up resources at schools.