Governor Perdue’s Education Budget Highlights

Overall General Fund Appropriations:
K-12 appropriations 2 percent decline (2009-10); .6 percent decline (2010-11)
UNC appropriations 5 percent increase (2009-10) 7 percent increase (2010-11)
Community Colleges – appropriations 6 percent increase (2009-2010); 11 percent increase (2010-2011)

Summary
Public education fares better than any other agency.  Perdue actually increases spending by 2.5 percent (this is overall spending including the spending of receipts). Money from state funds and federal stimulus package will increase funding $350 million across all education levels.  Per student state support for K-12 education will increase from $5,597 to $5,736.

Major cuts include a total of $98.2 million in “truth in budgeting” payroll adjustments ($24.2 million in K-12, $55 million in UNC, and $19 million in the Community College System). Perdue also recommends $263 million in “flexibility reductions” in which agency heads are tasked with finding cuts ($144 million for K-12, $99 million for UNC, and $20.9 million for the Community College System).

Question: Budgets for next two years include $581 million in Education Fiscal Stabilization funds in 2009-10 and 2010-2011 to offset the cuts.  How will that money be replaced in future years?

Public Education Budget Cuts

• Truth in Budgeting Reforms which budgets payroll closer to actual salaries and benefits paid will save about $24.2 million for each of the next two years.
• Budget reduces state aid to LEAs by $ 144 million in each of the next two years, based on ADM membership. Budget also eliminates Student Accountability Allotment of $38.3 million each year for next two years.  Funds are expected to be replaced by Federal Stimulus funds. How will these functions be financed when Federal stimulus money is gone?

Public Education Budget Expansions

• $6.6 million for Dropout Prevention Grants.  Increase Dropout Prevention Grants $6.6 million each year.  Should programs that are poorly targeted, show little in the way of real results and lack a credible evaluation system be renewed?    
• Learn and Earn High Schools.  Budget also calls for opening 12 new Early College Learn and Earn High Schools, costing $3.6 million each year. Should we open new schools when even former Governor Easley admits Learn and Earn enrollments have been less than satisfactory?
• Teachers Experience Based Step Increase. $64 million in “experience-based” step increase is provided to help bring NC teacher salaries to national average.  They receive no across-the board raises, however.  National average statistics are troublesome because costs of living are different in different places.  A 2009 study by Terry Stoops of the John Locke Foundation found an average North Carolina teacher draws $59,000 in annual compensation, $4,000 more than the average teacher nationally. 

Programs Downsized or Eliminated

• Governor’s School – enrollment for the highly politicized summer education program is reduced from 800 to 400 students.
• New curriculum on Personal Financial Literacy Instruction ($500,000) is eliminated.
• Department of Public Instruction:  Only 2 programs totally eliminated, saving $1 million with no staff changes.

UNC Highlights

• State  will fully fund expected enrollment growth (4,000 FTEs) and provide $23.4 million per year to expand financial aid
• Truth in Budgeting Reforms: (See definitions above) UNCGA and campuses save about $55 million each year for next two years.
• Provides $23 million for student financial aid each year for need based financial aid.
• Only 5 programs eliminated:  $1.8 million in recurring funds and $1.5 million in nonrecurring funds.    

 Community College System Highlights

• Truth in Budgeting Reforms:  $19 million savings in each of next two years. 
• State fully funds expected enrollment growth of 12,500 FTEs. Provides additional $3 million reserve for schools who experience enrollment growth greater than 5 percent.
• $20.9 million management flexibility reduction, 9 jobs eliminated.
• Eliminates 4 NCCC programs,  $3.1 million in savings in 2009-2011. However no savings in personnel costs.

 Major Issues: 

• How will state replace $1.4 billion in federal stimulus money? 
• Program eliminations provide insignificant cost and personnel savings for DPI, UNC and CCC.  Additional reductions to the Department of Public Instruction and UNC Centers and Institutes are possible