This month, the Macon County Schools Board of Education voted to approve its 2022-23 Budget Resolution.
Just like other schools around the region, it is struggling to accommodate state-mandated pay increases and will have to allocate over $500,000 from its fund balance, a move that won’t be sustainable for future budgets.
“The bulk of that [fund balance allocation] is because of the increase to $15 an hour minimum wage that went up this year,” said Angie Cook, finance director for Macon County Schools. “That affected the bulk of our custodial staff, our clerical staff and our teacher assistants. The custodial staff and teacher assistants, for the most part, are in the state fund, but all of your clerical people are [paid locally].”
The state budget, signed into law in July, provided salary increases for all public school employees in the fiscal year. It also increased retirement rates to 24.5% and increased health insurance premiums to $7,397 per employee, per year.
In addition to step increases, as well as an increase to the overall salary schedule for public school employees, the state budget mandated increases for hourly employees in the school system. Last year, hourly employees got an increase of 2.5% or up to $13 per hour, whichever was greater. This year, that increased again by 4% or to $15 per hour.
Last year in Macon County, when the school system had to increase hourly employees to at least $13 dollars per hour, the lowest paid hourly employees were at about $12.50 an hour. This meant that the largest mandated increase for hourly employees was only about .50. This year, roughly 100 employees will be getting the $2 raise up to $15.
“That’s a huge impact on our budget,” said Superintendent Dr. Chris Baldwin.
School Board Chairman Jim Breedlove noted that while the school system is required to give those raises, the state has not allocated enough funds to pay for the increase in wages and benefits.
“They did increase the state allotment a little bit for those categories, but it’s not enough to cover the bulk,” said Cook.
Last month, Swain County Schools adopted its budget resolution and faced the same issue, having to allocate over $1 million from its fund balance in order to balance the budget.
“I think it’s really important for everyone here to recognize that swain county is not the only school system that is fighting this battle,” said Swain County Schools Superintendent Mark Sale at the time. “If you go to any superintendent, any school board, you are going to hear some of the same stories. All of us are struggling in different ways.”
Local money accounts for 14.5% of Macon County Schools funding. This fiscal year, the total local current expense is $10.2 million. A little over $2.5 million of that will go toward locally paid teachers, another $3.3 million goes toward operational support services. Nearly $1 million is allocated for technology support services and $0.75 million covers pay for clerical workers and the few principals that are paid from local funds.
The state allocation for this portion of the budget is $40,000, federal allocations are $40,000, local revenues are $1.2 million and county appropriations make up $8.2 million of the local current expense fund revenues. The school system allocated $500,000 from its fund balance to reach needed funding levels.
State funding accounts for about 49.5% of the MCS budget.
The total State Public School Fund Appropriation to Macon County Schools is $34.6 million. This money will pay for all state-funded teachers in Macon County, totaling $21.6 million. It also pays $4.8 million for all state-funded exceptional children’s teachers and teacher assistants, $2.1 million for the bulk of principal and assistant principals, and $1.5 million for guidance counselors and media center personnel. Most custodial salaries also come out of this pot of money at about $2.8 million.
Federal funding accounts for about 19% of the MCS budget.
The total Federal Grants Fund for the 2022-23 fiscal year is $13.2 million. This pays for federally funded classroom teachers, EC teachers and Title One teachers, as well as operational services.
The school nutrition program has a budget of $3.2 million. Of that, a little more than $40,000 comes from state funds, $2.7 million comes from federal funds and $486,050 comes from local revenues. All that money goes toward labor and supplies.
The capital outlay budget for the 2022-23 fiscal year is about $6.5 million. Almost all that funding comes from county appropriations, while a little over $200,000 comes from state and federal funds. Of the capital outlay budget, $2.7 million will go toward the Macon Middle locker room and track projects, and $1.1 million is appropriated for Franklin High School.
Macon County Schools is looking to build a new high school facility in the next couple of years, a needed improvement that will cost the county upwards of $100 million.
“What we need to focus on is that this budget proposal is requiring an allocation of $500,000 from our current fund balance. We can only stand that once or twice,” said Breedlove. “As we have retirements and other things taking place, and positions come in, in terms of making decisions about whether those positions will be filled, it’s time to start looking at those very hard because we’re going to have to attrit. My estimation, there is going to have to be some attrition done. In 2024, we no longer have that stop gap ESSER funding and we can’t continue to appropriate money from our fund balance, just can’t do it.”
Cook noted the likelihood of even more salary and retirement increases in the future.
“We’re into a very tough time, guys,” said Breedlove. “We’ve been through this before. As we enter into this new year, we’ve got to take hard looks at positions and some harder looks at other things, in terms of trying to bring things into line. I hate to say it, but I also think I’m being very realistic.”