Times are tough, and in response Jackson County department heads have been ordered to reduce spending by 3 percent between now and June 30, the end of the current fiscal year.
Additionally, a hiring freeze will continue and the use of part-time employees will be curtailed as much as possible to save dollars, interim County Manager Chuck Wooten told the Jackson County Board of Commissioners this week.
Every county in North Carolina has braced for upcoming cuts as a result of the state’s $3.7 billion shortfall. But Jackson County is having problems just getting through the next few months, at least in terms of meeting its projected revenues and expenditures for the current fiscal year.
Wooten, who took over the county’s top paid slot in January on a temporary basis after serving as Western Carolina University’s finance officer for 30 years, crunched the budget numbers and determined Jackson County was facing a shortfall of its own: $336,004, to be exact.
Property taxes haven’t been collected at the rate projected, and the failure of residents to pay vehicle taxes compounded the problems, he said. Jackson County’s budget for this year assumed a property tax collection rate of 95.4 percent. The actual collection rate is running about .62 percent behind.
Wooten instituted these additional steps:
• Travel to conferences and for professional development will be approved only when it is necessary to maintain a license or certification. All travel must be approved in advance, and out-of-state travel is out, unless it involves licensing.
• Equipment not yet purchased has to be approved by Wooten before being bought, and the purchase won’t be approved unless it is absolutely necessary.
• Employees have been asked to avoid stockpiling supplies, and to buy only what is needed to get through the year.
County employees must submit lists of budget savings to Finance Officer Darlene Fox by Feb. 11, according to a memorandum sent this week by Wooten to department heads.
“In addition to these immediate budget actions, I will be evaluating other county policies and practices to determine if budget savings are available by implementing modifications,” he wrote.
Wooten warned county employees that the new budget for fiscal year 2011-12 would likely reflect an expected three to five percent reduction in tax and locally generated revenues, and to plan accordingly.
“It is apparent that our tax base will not increase at levels similar to past years,” Wooten wrote.
Macon County Schools, like other local school systems in North Carolina, has been warned by state leaders to plan for cuts that could mount as high as 15 percent.
Along with other county departments, the school system will have to make some difficult choices in the days and months to come, Macon County commissioners agreed during a recent work session. Such as tapping into the schools’ fund balance — broadly speaking, the difference between assets and liabilities on its balance sheet — to help reconcile financial needs with actual available dollars.
Macon County Schools Superintendent Dan Brigman said this week the schools’ current fund balance comes to about $3 million. This money, Brigman noted, includes certain money allocated last summer by the federal government.
“We have worked very hard in the Macon County school system to preserve the fund balance in preparation for the loss of (some state money) to be removed July 1,” Brigman said, which will create an immediate “$2.4 million deficit in our state budget allocations for Macon County as a result of these dollars being taken away.”
Also important to understand, Brigman said, is that additional cuts might well come from the state.
Hard times, however, might call for hard choices.
“I always sound like I’m down on the school board,” Commissioner Bobby Kuppers said, adding that he’s not against school board members — rather, Kuppers emphasized, he’s a big supporter.
However, Kuppers said, “their fund balance is our fund balance — the bottom line is, they can’t look to me for $2.5 million while protecting $3 million … we’ve got to be really smart, and really careful, about what we invest our fund balance in.”
Macon County Manager Jack Horton told commissioners a 15-percent cut by the state to local schools could translate to the loss of 5,000 teaching positions statewide.
Kevin Corbin, a long-time Macon County Board of Education member who stepped in to complete the final two years of commissioner-now-state-senator Jim Davis’ term, said he doesn’t believe the county’s fund balance would be well spent funding continuing expenses such as salaries.
“(But) if this year and next year we have truly bottomed out, then using the fund balance (to bridge the gap) isn’t a bad thing,” Corbin said.
“We’ve had to make some very hard decisions the last three years,” Commission Chairman Brian McClellan said. “It’s going to be more of the same, and nobody is exempt from that.”
Macon County Schools’ entire total budget to operate the school system is $31,579,444.
Most people predicted that this session of the North Carolina General Assembly was going to be fast and furious, and it appears that is indeed the case. The GOP-led General Assembly is advancing legislation that Democrats have traditionally not supported, like raising the cap on charter schools and opposing the federal health care law passed last year by Congress.
In addition, the $3.7 billion projected budget shortfall is also forcing lawmakers to look all over for money, a challenge that is also highlighting the different philosophies of both parties.
It appears a move is afoot to snag money that is supposed to be headed for the Golden LEAF Foundation.
This fund was established from the tobacco settlement proceeds and is supposed to be used to promote the “long-term, economic advancement of rural, economically distressed, and tobacco-dependent counties.” That said, the $68 million annual settlement payment is being eyed by GOP leaders in the General Assembly as a piece of the deficit-reduction puzzle.
On Thursday, the Senate gave tentative approval to a plan that would take proposal that would take money from approximately 20 state accounts and the three funds supported by the 1998 national tobacco settlement — Golden LEAF gets half the tobacco settlement money, and two sister funds, the Health and Wellness Trust Fund and the Tobacco Trust Fund, share the other half.
The vote was 30-18 to take what would amount to about $142 million in all.
An email was sent out yesterday by the Golden Leaf Foundation president saying the idea was a bad one, and that other states have taken similar actions with bad results.
“That’s not the answer. Other states have used their tobacco settlement funds long ago to patch their budget. Now their money is gone, and they face the same issues we face but don’t have access to the assets you currently do through the Golden LEAF Foundation to create jobs and expand economic opportunity. Golden LEAF has helped create an anticipated 4,300 jobs and over $900 million in capital investments in the last two years alone, wrote Golden Leaf president Dan Gerlach.
A Western North Carolina source who is involved in an economic development project funded by the Golden Leaf Fund told The Smoky Mountain News on Thursday that conference calls were held around the region on Thursday to discuss the possibility the fund would be raided and ongoing projects might be stopped in their tracks.
So far this issue has been mostly split right down party lines, with Republicans supporting taking the money and Democrats — along with Gov. Bev Perdue — insisting the money stay where it is. Some Republicans have suggested that the Golden LEAF Fund should be dissolved and all of its $600 million in assets go toward deficit reduction.
Rep. Ray Rapp, D- Mars Hill, wrote in his e-newsletter that debate on repealing the federal health care law was one of the two dominant topics from the General Assembly’s first full week in session (the other was the economy).
Republicans in the House introduced and passed a bill to block the requirement in the federal health care law that requires everyone to buy health insurance by 2014. The bill — which passed essentially along party lines, 66-50 — would force Attorney General Roy Cooper to join other states in challenging the federal law.
“It only seems fair that we ask everyone to take personal responsibility for their own health by purchasing their own insurance so that we can require insurers to cover people with pre-existing conditions, allow young people to stay on their parents’ health policies until age 26, eliminate life time limits and provide tax credits for small businesses that want to cover their employees,” said Rapp, who has been appointed Democratic whip for this session of the General Assembly.
Rapp and other Democrats point out that the Attorney General has said it would cost $344,000 to join the suit, tough money to come by in the face of the projected budget shortfall. Both Rapp and Rep. Phil Haire, D-Sylva, voted against the bill. Rep. Roger West, R-Marble, voted for the bill.
• As reported in the Asheville Citizen-Times Friday, Feb. 4, bills are progressing in both the House and Senate that would ban the practice of involuntary annexation, which forces residents near town limits into the town’s jurisdiction. Annexations typically mean additional city taxes and are usually accompanied by more services.
However, towns now have the right to grow their boundaries even if the residents to be annexed don’t support the move. These laws would ban that type annexation.
“I believe that people should have the opportunity to vote whether or not they should be included in an adjacent municipality,” said rep. Tim Moffitt, a Republican lawmaker from Buncombe County.
The bills would halt all involuntary annexations until July 1, 2012, during which time GOP leaders want to craft a new set of laws governing annexation.
• The Associated Press is reporting that Republicans are in support of a bill to lift the cap on charter schools and allowing proceeds from the state lottery to be used to build new charter schools.
State laws governing charter schools have changed very little since a bill passed in 1996 allowing for up to 100 charter schools in North Carolina. Because of the cap, charter school supporters say students in 53 of the state’s counties don’t have charter schools. The current 100 schools have a waiting list of 20,000 families, according to Darrell Allison, president of Parents for Educational Freedom in North Carolina.
Charter schools don’t charge tuition and have open enrollment. They are run by private boards and exempt from many of the rules that are in place in traditional public schools. The state money allocated for each student follows that student to a charter school, but so far charters have not received any lottery money.
Opponents also worry that lifting the requirement that enrollment in charter schools reflect the general racial and ethnic composition of a county could lead to problems. They argued for slowly raising the allowable number of schools rather than a blanket lifting of the cap.
“What I do not want to do is create a dual system of schools and charter schools,” said Sen. Malcolm Graham, D-Mecklenburg.
The bill is currently in committee.
Local boards are finding themselves on the wrong end of the dog when it comes to putting together budgets for the upcoming fiscal year.
In Jackson and Macon counties, at work sessions held by commissioners in their respective counties last week, much of the discussion at these relatively informal get-togethers involved speculation on when — and what — might be expected from the state General Assembly.
The state, as it were, would be the front end of the dog.
North Carolina is facing a projected $3.7 billion shortfall. Thousands of state jobs are threatened, with massive cuts expected to come for health and human services, schools and other critical services offered on the state and local level.
So, what does that mean for counties?
“There are certain things we have to provide,” said Evelyn Southard, finance officer for Macon County.
And not knowing how much money will come down the pike from the state complicates matters, she said. When counties will know the full extent of the financial devastation is unknown, but that knowledge is critical to local boards starting preparations on budgets for the next fiscal year.
Macon County Manager Jack Horton warned his board that even though members of the General Assembly are making happy noises about having their budget passed by the end of June, August is more typical, and the state has actually lagged before into October.
“We have to have the (ability) to take care of the county business whether the state gets their house in order or not,” said Horton, a veteran administrator who has also worked over the years in Swain and Haywood counties.
In Jackson County, officials were concerned about staying within this year’s budget in addition to preparing next year’s.
Jackson County must either slow its spending, interim Manager Chuck Wooten said, or the county must dip into the fund balance — those are the two choices facing Jackson’s commissioners. An across-the-board cut for county departments seems the most palatable option of the two, Wooten said.
The problem is not enough people are paying their taxes in Jackson County. A gap between the budgeted tax-collection rate for the current fiscal year, and the actual collection rate occurring so far is 0.62 percent off what was originally projected. Sounds tiny, but that adds up to big bucks: there is a projected revenue shortfall for the current year of $336,004, including failures to pay vehicle taxes.
The recession has taken its toll on all counties when it comes to people paying their taxes. Jackson’s budget for this year assumes a property tax collection rate of 95.4 percent. Last year, the tax collection rate was only 94.8 percent, but county leaders apparently banked on it coming back up.
Wooten said as a result this year’s budget is “too optimistic,” though he stopped short of assigning blame. Wooten replaced longtime County Manager Kenneth Westmoreland in January.
In response, Jackson County commissioners indicated they would probably become more aggressive in tackling tax scofflaws.
“Why have we not gone after this?” Jackson Chairman Jack Debnam asked, presumably of the only two (Democrats) commissioners who remain from the previous board.
Debnam then answered his own question: “I know, we’re a small county — they could be friends and relatives.”
New Commissioner Doug Cody, a Republican, warned his fellow members that favoritism must play no role.
“If we go down this road, it is important to treat everyone equally,” he said.
Macon County leaders, by comparison, were merry about having a mere $34,283 projected discrepancy.
“And I think there’s some room in here for our expenditures and revenues to be even better than is shown here,” Southard said.
In other state-local government news, the N.C. Association of County Commissioners last week passed a list of legislative goals the group wants state leaders to adopt. Beale, who attended the meeting, summarized the top five priority goals of the group:
• Oppose shifting road maintenance from the state to the counties.
• Reinstate Average Daily Membership, a formula that uses school enrollment to determine funding levels, and lottery funds for school construction.
• Ensure adequate mental-health funding by seeking legislation for adequate capacity of state-funded acute psychiatric beds; oppose closing state-funded beds until there is adequate capacity statewide, and seek legislation to maintain the existing levels of state funding for community mental-health services.
• Preserve the existing local-revenue base (don’t take money streams away from already-hurting local governments).
• Authorize local revenue options by allowing counties to enact by resolutions, or at the option of boards of commissioners, by voter referendum any or all revenue options from among those that have been authorized for any other county.
When Jackson County’s new commissioners announced they would oversee all hiring to determine whether positions should be filled or wiped off the books, the mandate had a fiscally prudent, vigilant-watchdogs-of-taxpayer-dollars sound.
“I have to admit, this is causing somewhat of a problem in being able to manage this,” interim County Manager Chuck Wooten told the board last week, just more than a month after commissioners so tightly grabbed the reins.
Though commissioners control the budget, statutorily speaking the sheriff and register of deeds — both elected positions — have full powers to do the hiring and firing in their own departments, Wooten pointed out.
Wooten also asked: did commissioners really want to clog-up the system (about 4 percent of the Jackson County workforce is currently open) by scrutinizing positions mainly paid for using state dollars, such as at the health department and in social services, which have their own overseeing boards? And, what about contracted and grant-paid positions? Take a transit driver, 85 percent grant funded, as an example of the latter category, Wooten said. Do you need to personally approve who is hired?
Well, no, now that the problems being created by practically their very first official decision as commissioners (during a Dec. 6 meeting) has become clear, it turned out the board didn’t really want oversight of those hiring decisions. In a 5-0 vote, they agreed in those cases to let others — the departments or boards directly involved, or Wooten — make the hires.
Unlike municipalities in North Carolina, county commissioners must vote for their manager to be given hiring oversight. State law gives town managers that right without elected leaders’ say-so. Most of the state’s 100 counties’ board of commissioners automatically extend that power to the county manager hired to, well, “manage” the county.
Jackson County commissioners did, however, retain the review-before-advertising-any-county-positions paid for purely with county money, via the general fund. Though, it should be noted, Wooten advised the five men they might want to reconsider that decision, too.
Wooten was hired as a temporary replacement for former County Manager Ken Westmoreland, who either elected to leave voluntarily before the new board convened in December, or who was shown the door. This depending on whom you believe, Westmoreland (who said he was forced out) or Chairman Jack Debnam (who said “it was his decision”).
Wooten retired Jan. 1 after 30 years of experience overseeing Western Carolina University’s finances. He has said he expects to help commissioners hire a replacement county manager within six months or so.
Jackson County has three new commissioners: Debnam (a conservative independent); Doug Cody (a Republican) and Charles Elders (a Republican). Democrats Mark Jones and Joe Cowan round out the board.
Haywood County commissioners have cut five full-time jobs and frozen four open positions to stave off a projected budget shortfall for the current fiscal year.
It marks the third straight year commissioners have cut county jobs to counter recession-driven budget deficits. Commissioners held a work session on the issue last week, where County Manager Marty Stamey suggested the job cuts to keep the budget in check.
The job cuts will target county departments involved in the construction trade. Building is still off from pre-recession levels, with a requisite drop in workload for county building inspectors, erosion control officers and well and septic tank permiters. Those departments are also bringing in less in fees. Stamey showed commissioners financial data to demonstrate the decline in building and real-estate-centric services.
The cuts will take the county down to 507 full-time positions, the smallest number of staff they’ve employed since they started keeping count in 2005. The employee count peaked out in 2009, when the county employed 557 full-time staff members, and the number has been dropping steadily every year, to 534 then 516.
Making the cuts would, he said, save the county $200,000 in the 2011-12 fiscal year, while keeping the four unfilled positions frozen would save an extra $250,000, for a total of $450,000 in savings.
Stamey recommended freezing the assistant county manager position, a title he formerly held until being promoted to the top job last fall. Other open positions that will be frozen include project specialist, IT technician and a human resource specialist.
Commissioners questioned Stamey about what effect these cuts would have on county staff, whether they would require layoffs or could be achieved through early retirements.
“Do they have people that are close to being ready to retire?” Commissioner Mike Sorrells asked of the three departments going under the axe. Stamey answered that, yes, some did, but it remains to be seen whether all five positions can be eliminated with retirements or relocations.
Commissioner Bill Upton expressed his reservations, saying he wasn’t sure how much further they could go following last year’s cuts.
“Down the road, it’s going to be tough, because I thought last year we got down to the bare bones and this is probably getting into the bone a little bit,” said Upton.
“We’re drilling into bone,” replied Stamey, who said that remaining county staff have been working increasingly hard over the last two years to makeup for the shortfall caused by losing colleagues.
Commissioner Kirk Kirkpatrick noted that in governmental situations it isn’t as easy to adjust budgets to revenues as it might be in business, because there’s still a certain threshold of services that need to be provided, regardless of how many people use them.
That is, in part, why trimming any more fat will be difficult going forward, and with $3.7 billion in state budget cuts looming, Commissioner Chairman Mark Swanger said he was uncomfortable with the unknown of what that might do to county budgets.
“The unknown here is what bothers me, what kinds of costs will be going to counties,” said Swanger. “It remains unknown what effect it will have on our budget, but it will not be a positive effect.”
By definition, the lottery is a gamble. There’s no guarantee of winning, no assurance that you’ll look back on your ticket purchase without regret.
Sure, it can pay out big sometimes, but you could just as easily come up empty. And in North Carolina, for the school districts the education lottery helps fund, it turns out the story of what happens to that money might be much the same.
For the last five years, regulations on what can be done with lottery money have been pretty strict. But with state and local budgets in crisis, the General Assembly last year lifted some of those strictures, allowing schools to pay other expenses that were losing state funding with lottery money; a consolation prize for losing the big pot. So many districts started clutching money they once spent freely, fearing state budget cuts that are just over the horizon and wondering if they’d made the right choices with lottery money given to them in the past.
SEE ALSO: GOP may loosen rules on lottery proceeds
In Swain County, lottery money has always gone to debt service, paying down notes taken out for school improvements. County Manager Kevin King said that’s what they’ll continue to put those dollars toward for the foreseeable future. The same is true for Macon and Jackson counties.
In Haywood County, however, they’ve taken fuller advantage of what the funding rules allow. The way lottery money allocation works today is pretty simple: school districts get a percentage funding based on their ADM, average daily membership, which is basically how many students are attending their schools. Districts used to get extra money based on their property tax rates, which put western counties with historically low rates at a disadvantage. However, after years of lobbying by school officials, the General Assembly removed that inequity during its last session.
But regardless of where it comes from, lottery funds have, in the past, been earmarked only for capital improvements. That means new buildings, repairs to existing facilities and, as in Swain County, debt service for similar projects that have already been paid for.
Back in Haywood County, they decided to use their funds to install artificial turf on their sports fields, a project that’s taken their yearly lottery funds, which average about $600,000 annually, since they started receiving them.
After last year, though, when the extent of state budget woes became increasingly clear, Assistant Superintendent Bill Nolte said they started saving as much of that money as they could, aware that the state would have to find $3.7 billion dollars in cuts somewhere, and schools might be first on the chopping block.
“You … want to save the lottery money because it’s the only source that you have as an emergency source,” said Nolte, noting that, after paying the remaining two turf payments that are still outstanding, Haywood’s lottery fund balance would leave about $600,000 to fund teaching positions or address liability issues and emergency facility needs, which is as low as he’d like to see the fund get.
“We’re down pretty close to a pretty uncomfortable level of having a reserve there,” Nolte said.
But when asked whether, retrospectively, the turf still seem like a sound decision, Nolte defended the choice. He said the school system used the money for one of the few things it was allowed to spend it on.
“It [lottery funding] was never intended for emergency crises, it was never intended to pay for teachers, it was never intended to buy paper. That [capital expense] was the only thing we could spend it on at the time. It was a very logical expenditure,” said Nolte. “If we had a crystal ball and we knew that two to three years later we would be in an economic crisis, we may have not done that project.”
But, as Nolte points out, crystal balls were in short supply, and in what seemed like a healthy economy, they would have been decried for saving the money then.
“Back when we did the fields, there was no opportunity to spend the funds in another manner. If we had saved those funds back then, people would have said, ‘what are you saving for?’” said Nolte. “At the time that we made those expenditures it was a very popular decision.”
Now, however, there is no decision more popular than holding onto what you’ve got, in case things continue to decline.
That’s the opinion voiced by several commissioners at a recent Haywood County Commissioners meeting, where they expressed concern about what’s happening to the county’s lottery money.
Commissioner Bill Upton, who was formerly a principal and superintendent in the Haywood County school system, questioned school officials on the wisdom of using lottery funds to fix decrepit bleachers instead of saving the money in case it’s needed for teacher positions next year. Commissioners eventually approved the bleacher repairs, which had been flagged as a safety hazard by the school’s insurer for several years, but their reluctance to dole out lottery money on non-essentials was clear.
“The ballgame’s changed and that’s my big concern,” said Upton in an interview. “In the past, you know, you had to use lottery monies for projects and all. I think that’ll change.
“The unknown is what bothers me, and you hate to make decisions that will come back and hurt you this summer [when the state budget is set].”
According to North Carolina State Superintendent June Atkinson, a lot of districts around the state are thinking along the same lines. She said that few chose the option to use lottery money for teacher funding or other non-traditional uses last year. There were more hoops to jump through, including extra scrutiny at the local level, and there was still some federal funding available that gave many districts a buffer for state losses.
But this year, said Atkinson, those federal appropriations will be long gone, to the tune of $1 billion statewide, and the $3.7 billion hole at the state level is going to hit schools hard. This year, she expects many more districts to take the General Assembly up on any offer of unrestricted lottery funding they choose to make.
“In the leadership in our schools, people are making a concerted effort to stretch every dollar as far as they can go. When those federal dollars dry up, I’m sure school districts will be looking at those lottery funds,” said Atkinson.
However, she doesn’t think the lottery will ever become a staple to school funding — no matter how many restrictions are removed — because it’s just not enough to make up for what’s being lost.
“The lottery really is just icing on the cake,” said Atkinson, “because it is an unstable source of dollars. It changes based on the whims of people that buy lottery tickets … the percentage of the lottery dollars is such a small amount of money in comparison to the total amount [needed for school funding].”
And, just as in other retail sectors, those ticket-buying whims have been severely curtailed by the economy. Lottery revenue saw about a $44 million drop last year, and if those patterns continue, schools will have even fewer dollars to deal with.
But as for the money that’s left, Atkinson said she’s confident that lottery funding in the future, at least in the short-term, will surely be re-routed to needs other than capital projects, which would leave the state’s school facilities languishing.
Nolte said they’re already experiencing that squeeze in Haywood County.
“We swallowed very hard and did not do a building replacement at Waynesville Middle because we knew we might need that fund for schools or teachers,” said Nolte. That decision, he added, was pretty unpopular.
But they’ve been told to brace for a 10 to 15 percent cut from the state this year, so they’re hanging onto what they’ve got.
Nolte said he knows people might look at Haywood’s past lottery decisions as questionable, but would counter that argument by pointing out that the school system has long been recognized as fiscally responsible, running every project on time and on budget.
“I know that people want to make the arguments of bleachers versus teachers, or they want to make the argument of athletics versus academics, or they want to make the argument of don’t do anything to buildings, just keep people in jobs,” said Nolte. “But I hope people understand that we make the best decisions we can make with the information we have at the time.
“It’s real easy to second guess, and I just hope that people understand that we’ve got a long history of making very good decisions when it comes to capital expenditures. We’re taxpayers too, so we want to be very prudent with the revenues that are allocated to the school district.”
Statewide, Superintendent Atkinson hopes that lottery funds will help schools survive, but concedes they are a band aid on a hundred bullet wounds, and schools will have to shore up for a hard hit that’s coming soon, prioritizing student success over all else in the face of a bleak financial future.
“We’re at the point where we can’t make cuts without harming students. North Carolina ranks about 42nd in the nation as far as school funding. We’ve mad a lot of progress, and I just hate to see our not being able to continue that progress,” said Atkinson. “Money does matter.”
Staff Writer Quintin Ellison contributed to this report.
Up to 1,700 jobs, perhaps a whole campus eliminated — the dire picture painted this month by Erskine Bowles, president of the University of North Carolina system, on the state of higher education during these tough economic times isn’t pretty.
Locally, staff and faculty at Western Carolina University in Cullowhee, Southwestern Community College in Sylva and Haywood Community College in Clyde are preparing for significant budget cuts.
Most likely, a 10-percent reduction is coming. State colleges and universities across North Carolina, however, are outlining what they’d do in response to higher and lower reductions, as directed by the UNC system and The State Board of Community Colleges.
“We are hearing talk of impending heavy slashing and have been asked to prepare scenarios of how we would deal with 5-, 10- and even 15-percent cuts,” said Rose Hooper Garrett, public information officer for SCC, via email.
A year ago, the UNC system took a $70 million cut, or less than 3 percent.
“At this point, it’s too early in the process to provide the actual impact of what a 10-percent budget reduction would do to the overall operations of WCU,” said Chuck Wooten, vice chancellor for administration and finance for the university.
“It’s fair to say that most likely we will have fewer class sections, more students in each class, more dependence on part-time faculty, reduced funds for faculty travel and professional development, fewer funds for general operations such as supplies and equipments, elimination of vacant positions, possible elimination of positions that are currently filled, and reduced funds for general maintenance of the physical plant of the campus.”
Here’s what is happening: North Carolina is facing a budget deficit of $3.5 billion.
At 5 percent, the UNC system would cut $135 million and likely eliminate 800 jobs. At 10 percent, the UNC system would cut $270 million and eliminate 1,700 jobs.
“We’re really going to impact the academic side,” the Associated Press quoted Bowles as saying.
Rose Harrell Johnson, president of Haywood Community College, said the community college would lose more than $1,306,478 with a 10-percent reduction.
“For comparison, the college received an increase of $1,213,111 in state funding this fiscal year because it had a 10.77 percent enrollment increase,” Johnson said. “If the budget reduction becomes reality, the college will lose its enrollment growth budget increase and potentially more.”
Among other measures, Garrett said SCC has been considering tuition increases.
“At the system office we will look at operations, contracts and personnel,” she said.
Wooten said WCU anticipated budget reductions by making a number of decisions in the 2009-2010 fiscal year to take in budget reductions totaling about 8 percent, which eliminated 93.92 positions.
“After satisfying budget reductions for 2010-11, $4,404,792 remained for use against future budget reductions,” Wooten said.
WCU would see reductions of $8,638,874 at the 10-percent level and $4,319,437 at the 5 percent level, he said.
“WCU’s plan, which was submitted to the Office of State Budget and Management, would first offer up the full amount remaining from previous budget reductions ($4,404,792) to satisfy the 5-percent budget reduction plan, and campus divisions and departments have identified additional budget reductions ($4,234,082) to satisfy a 10-percent budget reduction plan … (this) would potentially eliminate 41.08 positions in the 2011-2012 fiscal year budget.”
With the Jackson County budget a few short weeks from completion, a split emerged among commissioners concerning raises for county workers.
Last week Commissioners Tom Massie, William Shelton and Mark Jones voted to eliminate employee raises in the upcoming budget and save the county $294,000.
Both Chairman Brian McMahan and Commissioner Joe Cowan opposed the measure.
McMahan isn’t happy with the decision, which he sees as abandoning an employee compensation system the board has already paid dearly for implementing.
Last year, the board commissioned a salary study for all county positions. The study recommended big raises for those already in the highest paid county positions. Commissioners enacted the raises but at a high political price.
“We took a lot of criticism about salary increases and the Mercer Study, and for us not to stay with the system was just backing up,” McMahan said.
Nonetheless, Massie proposed cutting step raises for 400 employees, an automatic increase of 2 percent of their annual salary.
Massie suggested the cuts in a budget work session last week. There have been more than a dozen budget work sessions in recent months, but last week was the first mention of cutting employee raises.
Massie said few workers are getting raises these days. State employees, school employees and the employees of surrounding counties haven’t gotten increases for two years, he said.
“We’ve bucked the trend the past couple of years, but this year just isn’t the year to raise salaries,” Massie said.
Massie said he doesn’t believe the commissioners should have to insulate the county’s workers from the economic troubles everyone else is feeling.
McMahan countered that a major portion of the money saved through the cuts is merely being reapportioned to other programs rather than used to lower taxes. Indeed, $112,621 is set to go back into the community in the form of contributions to the libraries and resources like the Community Table and the Jackson County Animal Shelter. Another $50,000 was placed back into the county’s contingency fund, and more than $200,000 will be set aside for future capital projects.
At a public hearing on the budget, the county heard from several community organizations requesting financial support.
For McMahan, the step increases are part of a larger employee compensation system that he said has helped the county attract and retain quality workers. He also objected to the late timing of the decision.
“If we were going to do this, it should have been brought up in January so the employees could plan for it,” McMahan said.
County employees had their insurance benefits changed this year, and their annual deductible was raised from $500 to $1,250.
The debate over the step increases was the one hot point in what has been a relatively amicable budget process.
The budget drafted by County Manager Ken Westmoreland called for a 9 percent overall reduction from last year. But the decrease was achieved primarily by leaving vacant positions unfilled, reducing capital expenditure outlays, and nickel and diming across the departments.
Jackson County has not had to cut services or jobs this year.
The commissioners also designated $80,000 for commercial investment in the county’s economic development fund, a signal that the county intends to get its Economic Development Commission back into action after years of controversy paralyzed it.
The county’s total budget in its most recent form weighs in at $66.6 million.
While university leaders are nervously hoping state lawmakers will pass a budget that looks something like the Senate version, many K-12 school officials are openly rooting for the House version.
Seeing public schools and colleges compete for the same budget dollars is not unusual, especially during this recession.
John Bardo, chancellor for Western Carolina University, said the budget would ideally not pit educational systems against each other.
“We cannot get good students in our institutions if the K-12 sector or the community colleges aren’t doing their jobs,” said Bardo, adding that lawmakers should consider the various entities as one system that builds competitiveness for North Carolina.
Bill Nolte, associate superintendent for Haywood County, added that he understands the dilemma leaders across the board face during this recession.
“We know it’s not the mayor’s fault or the state superintendent’s fault. It’s just the state of the world economy right now,” said Nolte.
According to Nolte, the governor’s budget is the least desirable for K-12 schools. To prepare for the worst, that’s the version Haywood County schools is working with in crafting its budget.
Last year, Haywood County’s school system lost 44.5 positions. This year, Nolte estimates Haywood will lose around a dozen more.
“Out of 1,200 plus, it’s a lot, but it could be a lot worse,” Nolte said, citing the total number of school employees. About 10 of the 12 positions would be absorbed through retirement and resignations, avoiding actual layoffs but impacting staff levels nonetheless.
Other budget cuts will likely limit textbook purchases, replacement of school buses and staff training.
While state lawmakers make mandatory cuts for all public schools, they also require individual school systems to decide where to make additional cuts. Under the governor’s budget, Haywood has to come up with $2.3 million in additional cuts, compared to $1.4 million under the House budget.
Gwen Edwards, finance officer for Jackson County Schools, said the K-12 school system will probably have to make $750,000 of its own discretionary cuts above and beyond what state lawmakers slash.
Federal stimulus money may make up the difference this year, but that money, which has eased the pain of state cuts for two years now, will dry up come the 2011-12 school year.
“We’re anticipating that that’s where a lot of hurting is going to be,” said Edwards.
Jan Letendre, finance officer for Swain County Schools, said many have likened the cutoff in federal stimulus money to a “funding cliff.” What’s also worrying for Letendre, though, are state cuts in funding for custodians, school secretaries and substitute teachers.
Letendre pegs the discretionary cuts for Swain’s school system at about $575,000 this year.