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Budget Woes, Not Reform Bills, Center Stage in N.C.

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North Carolina's worst budget crisis in at least three decades is overshadowing efforts by state officials and lawmakers to speed up what many see as the slow pace of improvements in the state's public schools.

Legislators have spent the bulk of their time since convening in late January wrestling with the state budget, which in the current fiscal year shows a shortfall of $729 million out of a total of $7.25 billion.

Education has largely been spared painful cuts for this year, although some school-construction projects will be put on hold as a result of the budget cuts announced by Gov. James G. Martin.

Next year, however, the schools are not expected to do so well. Legislators are eyeing $371 million in cuts, including $169 million in education funding, to address a budget gap estimated at $1 billion.

The cuts identified thus far apply only to basic state support for education. Lawmakers have not yet addressed how to pay for the state's existing school-reform initiatives, any new programs, and salaries and benefits for school employees.

Although members have been preoccupied with discussions of raising taxes and slashing spending, several education bills pending in the legislature contain significant reform-oriented proposals.

House Democrats, for example, this month introduced an $118.7-million omnibus education bill that incorporates suggestions made in a host of reports issued by task forces, study commissions, and committees that have been examining education in the state.

The large number of studies reflects a widespread frustration with the progress of Tarheel schools, which despite two major reform programs in recent years have continued to fare poorly on measures of student achievement.

Finance Equity Targeted

The Democrats' bill would allocate $51.1 million l year to pay for the third phase of a new teacher-salary schedule that was begun in 1989. It also would allocate $28 million for the state's Basic Education Program, which was launched in 1984 to equalize course offerings, class size, and staffing levels in schools across the state.

For the third straight year, the amount falls well below the $100 million legislators initially planned to spend annually when the eight-year program began. The bep has since been extended over 10 years.

In his budget proposal, Governor Martin did not recommend funding the plan at all.

The omnibus education bill also would earmark $15 million over each of the next two years to help equalize spending among wealthy and poor school districts. A Senate bill with a similar purpose would provide $13 million for grants to school systems with fewer than 2,500 students.

The Public School Forum of North Carolina, which last fall released a study documenting unequal spending by districts, has been lobbying for the state to address the issue.

"I'm cautiously optimistic about what seems to be very broad-based recognition that all schools have not been created equal and that it's time to do something, even before a court suit," said John Dornan, executive director of the Forum, a public-private school-advocacy group. "We have the potential to be one of the only states that steps up to the question without a court order."

The Democratic bill also includes other initiatives recommended either by Superintendent of Public Instruction Bob Etheridge or by a task force appointed by the Governor.

The proposals include adding 16 days to the school year, requiring high schools to develop "tech prep" curricula that give vocational students solid academic preparation, and creating a competitive pilot program to encourage districts to set up "outcome based" programs in which students would progress only by demonstrating mastery of their subjects.

Flexibility Encouraged

In the Senate, the major education legislation would build on and expand an existing program designed to give districts greater flexibility in exchange for being held accountable for specific goals.

Under the current program, called Senate Bill 2, school districts are able to request waivers from the state board of education. (See Education Week, Dec. 6, 1989.)

In practice, however, only about half of the 1,800 requests for flexibility made by districts so far have been granted, according to Mr. Dornan, whose organization was the major supporter of the legislation.

The new bill lists 16 broad areas--including class size and certification requirements--in which districts would automatically be granted flexibility. Districts would only have to seek waivers from the state board in areas not covered by the bill.

Mr. Dornan said it would be "fair to say [the bill] gives schools all the rope they need to hang themselves or to prove whether, with flexibility, they will be able to innovate."

The bill also contains a detailed process for the state to put a failing district into receivership.

The provision is "fairly dramatic, yet our association feels that you just simply can't let failing schools continue to fail," observed Gene Causby, executive director of the North Carolina School Boards Association.

A House-passed bill containing similar provisions for state intervention in low-performing districts is before the Senate Education Committee.

'Project Genesis'

Perhaps the most dramatic education initiative being considered by the legislature, though, is the proposed "Project Genesis," which would allow school boards in Cumberland, Gaston, Johnston, and Wake counties to launch deregulated schools from the ground up.

A bill creating the program has passed the Senate and is being considered in the House. The prime mover of the initiative is again the Public School Forum, but it also has the strong support of Mr. Martin and top business leaders, according to Jackie Womble Jenkins, an education adviser to the Governor.

Backers of Project Genesis recently traveled to Washington to share their ideas with U.S. Secretary of Education Lamar Alexander. Ms. Jenkins said the trip was made out of the belief that the program could serve as one model for creating the 535 innovative schools called for by President Bush in his education package.

Despite the strong support behind the proposal, Ms. Jenkins said it faces "rough sledding" in the House, where legislators may not be willing to give educators the degree of flexibility provided by the bill.

The measure would permit school boards in the four counties, which are planning to open new school buildings in 1992, to put the leadership of the new schools out for public bid.

A winning five-person management team would be chosen to run each school, following requirements established by the local boards.

The administrators chosen for the schools would not have to meet state certification requirements themselves, and would have broad latitude to design programs.

Mr. Dornan said proponents of the bill believe it would help to unleash untapped creativity and be more effective than trying to change existing school cultures.

Eventually, if the results from the first four Genesis schools are encouraging, the program could be expanded to include failing schools in other districts, Mr. Dornan said. In those areas, school boards would be free to replace existing school managers with new teams that made proposals for turning the school around.

The legislature also is considering several bills that would change the governance of public schools.

Governance Issues

The constitution provides for an elected state superintendent, who works with a school board appointed by the governor. Currently, the Governor is a Republican and the state chief is a Democrat, which has led to frequent clashes over the budget and other issues and charges that policymaking is fragmented.

The proposals under consideration would either make the elected superintendent the chairman of the state board, or give board members the power to appoint the superintendent.

Legislators are deeply divided over the issue and may not be able to reach an agreement on any bill this session, said Mr. Causby, whose association supports an appointed school superintendent.

Another hotly debated proposal would have taken away school administrators' tenure and replaced it with employment contracts. The measure has already been defeated, however, despite widespread support among education groups.

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