Education CFO talks about the impact of budget cuts on NC schools

Our story about budget cuts is on the NC Policy Watch main page. To accompany that piece, here is a Q&A with Philip Price, chief financial officer for the North Carolina Department of Public Instruction.

Policy Watch: With three years of budget cuts now amounting to nearly $700 million, what has been the impact on schools throughout the state?

Price: They’ve been challenged. They have to come up with ways of addressing the large negative reserve that’s in place. They’ve had to increase class sizes. Initially there was a significant reduction in support personnel, your clerical (positions) and custodians and, for that matter, teacher assistants. In other words, your non-certified personnel. In the first couple of years, the cuts were predominantly in those areas, and then as the cuts continued, they had to move beyond those particular areas and start hitting into the instructional personnel…. So they’ve been challenged, and they’ve had to deal with those challenges by making some tough decision at the local level.

At least 45 percent of the budget is associated with classroom teachers, that’s why it such a large percentage to have to consider. If I told you to cut your budget and 50 percent of your household budget is food, you’d probably have a difficult time coming up with reductions without touching your food budget.

Policy Watch: How are schools and school systems coping with the cuts?

Price: A school district that has a large local revenue stream that’s supported by local funds – let’s take Wake County – (is) impacted differently than a school district that has very little local revenue or tax base, let’s say Tyrrell County or, for that matter, Greene County. Greene County has no locally paid teachers, so they have less flexibility when they start trying to address reductions than a school district that has a rather large local teacher population like a Mecklenburg or a Wake.

If you look at a Tyrrell or look at a Greene, they are mostly funded by state and federal (funds), so when you start reducing your state money and the federal recovery money has gone away, they are working at the bare minimum. Last week I was in Yancey County, and they have a central office of three people. They’re trying to get everything done. It’s a small school district, but you still have transportation, you have child nutrition, you have all the logistics of getting payroll done, so it’s a big business with limited resources available to them.

Policy Watch: School leaders say they are doing everything they can to protect the classroom. Is that the case, and if so, will it last?

Price: Everybody has tried to focus on doing what they can to keep the student-teacher relationship minimally impacted, . . . (but) they’re losing the support in the classroom, and the teachers are starting to stress more because they have to take on more, and it gets to a point where people just get exhausted, and I think they are very close to it.

The problem (at the administrative level) is everybody has to chip in and do the work, … so you start having slippages, having audit exceptions, you start having kids left on school buses, you start having things that you would have normally been able to take care of because people were overseeing and monitoring the whole process. . . . They are overwhelmed because they just got to get it done.

Policy Watch: Do you think more budget cuts are likely in the next session of the Legislature?

Price: You can look at last year. There were cuts to public schools, but they actually came in and made changes to try to reduce the negative impact of the negative reserve. You know that hole in the budget where they say, ‘Here’s all your money. Go out and educate the kids, but give us back $360 million.’ That was supposed to be $504 million, so the lawmakers did listen to the school districts. They did make an effort to try to reduce the continuing cuts, and I would expect that trend to continue. The problem they are going to deal with is the economy is still not on a fast track, so they have limited revenue to work with, which is going to be their challenge.

Policy Watch: Test scores and graduation rates went up last year. What does that say about the adverse effect of budget cuts?

Price: It takes a few years for the Titanic to turn. We’re this big huge aircraft carrier, and it takes a while for the impact of a change (to take place). . . . I do have great confidence that the budget cuts are going to start negatively impacting the performance of our kids…. The school districts are leaner, meaner. I’m not going to argue that point, but I think they’ve just gotten exhausted and can’t keep it up.

Policy Watch: Just to verify, the total amount of budget cuts for the past three years amounts to $690 million. Is that right?

Price: That’s about right. I don’t have the number in front of me. It doesn’t sound way off. Some of the commercials that were on TV did seem way off. Over the last three years they’ve done a lot of increasing in benefits. The retirement rate has increased around 75 percent form what it was three years ago, so everybody who is being paid from state funds had to pay more into the retirement system (and) the state had to contribute more, so that makes it look like there’s been an increase in state funding. . . . When you look at the raw numbers, and there are a lot of political people who do so, they say, ‘Look, we put more money into public schools. We didn’t decrease it as much as people say we did.’ But that money is really not going for new programs. It’s only going for the people who are still employed. It’s not adding new employment. . . . [T]he net buying power of public schools has dropped quite a bit over the last three years, especially if you back out all the increases that they put out there for benefits.



One Comment

  1. david esmay

    November 15, 2012 at 1:03 pm

    Is this all part of that moron and ALEC darling Phil Berger’s attempt at improving schools?

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