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Bonus Dilemma

North Carolina leaders were elated with the news this month that test scores had improved far beyond their expectations.

Gov. Michael F. Easley, a Democrat, pointed to the latest test results for students in grades 3-8 as a sure sign that the state's efforts for improving schools are "paying off."

But now the state is going to have to pay up in a big way.

The good test-score news left officials pondering how to come up with some $40 million in a tight state budget to pay the bonuses promised to teachers at those schools under the 8-year-old reform initiative.

The ABCs of Public Education, established in 1995, rewards teachers and staff members at schools that meet or exceed state expectations on the tests with up to $1,500 each in bonus money.

This year the results, released Sept. 10, were unprecedented. Three out of four of the state's 2,220 schools surpassed benchmarks set by the state, and one in five met the minimum improvement standard. African-American students saw an average gain of 10 percentage points and narrowed the achievement gap between themselves and their white peers.

State officials asked for and received $100 million from the legislature this year for the bonuses after projecting that about 35 percent of the schools would qualify for the incentive program, a proportion consistent with the percentage in previous years.

"We did question the numbers initially," said Philip Price, the assistant state superintendent for finance and business. "They were researched and scrubbed, but they're just as good as they can be."

Now Mr. Price and other officials are scrutinizing the state's $6 billion education budget to find the money needed to pay out the bonuses by next month.

That won't be easy, he said. Like other states, North Carolina is in the midst of a fiscal crisis. Last year, the Tar Heel State faced a $2 billion deficit. The current state budget is $14.8 billion.

Last week, the state was looking at another unexpected expense as Hurricane Isabel, which threatened much of the East Coast, arrived first in North Carolina.

But observers are confident the state will find a way to come up with the cash, as it did last year during the record deficit.

John Dornan, the executive director of the Public School Forum of North Carolina, said that reneging on the bonuses "would be a real morale killer."

—Kathleen Kennedy Manzo

Vol. 23, Issue 4, Page 21

Published in Print: September 24, 2003, as State Journal

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