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Published in Print: May 2, 2001, as N. Carolina Schools Brace For Budget Crunch

N. Carolina Schools Brace For Budget Crunch

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Faced with the threat of a deepening budget crisis, North Carolina school leaders are bracing for what observers say could be the toughest test yet of the state's resolve to improve public education.

Legislators have asked state education officials to find ways to cut more than $125 million, or about 2.3 percent of the state allocation for public schools in the fiscal 2002 budget. While lawmakers have suggested that spending for materials and noninstructional positions be slashed first, officials and observers say the extent of the proposed cutbacks is likely to lead to the elimination of instructional programs and teaching positions.

Such steps, they warn, could seriously undermine the state's most aggressive and consistent reform program to date.

"We've gone after buses and spark plugs and cleaning supplies first," said state schools Superintendent Michael E. Ward. "We've tried to protect the classroom as much as possible, but you can't with cuts of this magnitude."

Budget worries have plagued the North Carolina legislature for months. Fallout from Hurricane Floyd last year, enrollment increases, and the national economic slowdown are among the factors straining the budget.

In February, Gov. Michael F. Easley declared that the state's $800 million budget shortfall for fiscal 2001 amounted to an emergency. Mr. Easley, a Democrat, vowed to continue school improvement efforts despite the crisis, and education appeared to have dodged the knife when the governor announced $1 billion in budget cuts for this fiscal year. So state school officials were surprised by an April 11 letter from the Senate appropriations committee asking that they identify where spending could be reduced.

Cuts Identified

In their response, Mr. Ward and Philip J. Kirk Jr., the chairman of the state board of education, wrote that "such reductions run counter to Governor Easley's promise that services to children could not suffer as the state went about the business of identifying sources to balance the budget."

"Cuts of this magnitude will stymie the educational progress the state has made since 1995," they added.

The state board and the schools chief identified potential cuts of $10 million, or 10 percent, from the department of public instruction; more than $25 million in district-level support-staff jobs, such as clerical and janitorial positions; $7 million for classroom teachers, the equivalent of 189 positions; and $13.5 million for teacher assistants.

The proposal would also eliminate the $2.7 million school breakfast program; the school-safety-assistance teams established after the Columbine school shootings, for a savings of $500,000; and $6.7 million for professional-development.

The worsening financial picture comes as the state is making strides in improving student achievement and raising teacher salaries.

North Carolina has drawn praise nationally for its aggressive accountability plan, which grants rewards to school that meet predetermined achievement goals on state tests and punishes those that do not. The 5-year-old plan has drawn hundreds of millions of additional dollars into education, providing salary adjustments to bring teacher pay up to the national average and bonuses for teachers and other staff members in the state's improving schools.

Other states have used the ABCs of Public Education, as the program is called, as a model for their own accountability initiatives. Observers have warned, however, that sustaining the effort could prove difficult if the state's economic boom went bust.

"North Carolina is one of the states that is leading the pack in terms of improving test scores and intelligent reforms," said David W. Grissmer, a senior management scientist with the RAND Corp. in Santa Monica, Calif., who has studied North Carolina's accountability plan.

The current budget picture is "a serious problem for education reform," Mr. Grissmer said. "Reform without resources is sort of empty," he said. "It's not going to be a disaster next year or the year after, but three or four years down the line."

A 'Test Case'

Just as the economic boom helped push North Carolina to the forefront of education improvement nationally, it could be the state to watch as it struggles to sustain its efforts through fiscal instability.

"I think the North Carolina financial situation is going to be a good test case for the rest of the country when it comes to sticking the course on education reform," said G. Thomas Houlihan, a North Carolina educator who will take over the helm of the Council of Chief State School Officers this summer. "At the same time, it may be an opportune time to take a look at some of the recommendations that have been funded and determine whether or not they're working."

State lawmakers expect that the final budget could contain considerably smaller cuts if the governor's savings measures are approved and projections for increased tax revenues pan out.

"We do not want to impact the progress we are making in our public schools," said Sen. Walter Dalton, a Democrat and the senior chairman of the education appropriations committee. "But life is not easy. We also have the constitutional mandate to balance the budget."

Even so, Mr. Dalton added, many lawmakers view the ABCs program as "fairly sacrosanct."

Further complicating the situation is a judge's ruling in March in the state's 7-year-old school finance case that would require districts to serve the needs of disadvantaged students first, even if it meant diverting money from upper-level academic programs, administration, and extracurricular activities.

The state board has appealed the decision. Last week, Superior Court Judge Harold E. Manning Jr. denied the state's request for a stay of the ruling. The state is now expected to ask the state supreme court to delay implementation of the ruling during the appeal.

Local school officials met in Raleigh last week to discuss the proposed cuts. The budget could force districts to make some hard choices between people and programs, the officials reported.

In the New Hanover County public schools, a 22,000-student district in Wilmington, for example, the cuts identified by the state would reduce the district's $134 million operating budget by $1.3 million, said Superintendent D. John Morris Jr. That translates into about 31 teaching and support-staff positions, and a sizable reduction for transportation at a time when enrollments and gas prices are rising. The money the district requested from the county's commissioners is coming up short as well.

"We have put everything on the table," Mr. Morris said. "Are we going to cut middle school athletics, which benefit the students who most need activities after school? Do you cut back on nurses and social workers?"

One thing is certain, Mr. Morris said: "This is going to hit real hard."

Vol. 20, Issue 33, Pages 20,22

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