Schools Want State to Extend Tax Hikes
The Moore County Board of Education believes that an extension of temporary state taxes could help offset budget cuts to the school system.
During its regular meeting Monday, the board unanimously approved a resolution asking lawmakers to consider extending temporary taxes to help balance the state budget.
In 2009, the General Assembly increased the state sales and use tax by 1 percent and imposed additional corporate and personal income surtaxes to generate additional revenue and balance the state budget. The taxes, which are set to expire June 30, would add $1.3 billion to the state deficit.
Chairwoman Laura Lang said that by extending the temporary taxes, the state could balance its budget without having to make significant cuts that could severely impact the public education system, which currently makes up 35 percent of the budget.
"Right now, $1.3 billion is not money this state can afford to lose," she said. "We don't see a justified reason to be cutting [those taxes] on the back of education."
Superintendent Susan Purser said state legislators might believe the expiration of taxes would help generate economic growth, but more money in pockets now would come at the cost of limiting opportunities for students who are the future of the state's economy.
"It is an issue of economic prosperity," Purser said. "As we limit public education, we are therefore limiting our own opportunities to economic development."
Lang said no one wants to raise taxes, especially in the current economic climate, but she added that the extension of the current taxes would be a simple solution compared with other options, since the tax is something that all North Carolinians have been living with for the past year.
"This isn't an inconvenience," she said. "We're just talking about not letting one lapse that we're already used to."
Other board members agreed.
The board passed the resolution to join other school boards in the Sandhills region who have also voiced their support for extending taxes. Last week, the Cumberland County Board of Education also passed a resolution asking legislators to consider the temporary tax extension.
During the meeting, Mike Griffin, chief finance officer, also presented information from the N.C. Department of Instruction to give the board a better idea of the financial outlook for the 2011-2012 fiscal year.
The state was previously anticipating a $3.7 billion shortfall, but Gov. Beverly Perdue said during her State of the State address Monday that the deficit is now projected to be closer to $2.4 billion.
Last week, Perdue said the projected deficit had been reduced to $2.7 billion. Perdue will present her recommendations on balancing the budget to lawmakers later this week.
Griffin said he is cautiously optimistic about the lower deficit projections.
He said $1 billion of the reductions relies on two variable factors: the state being $700 million ahead of its projected revenues for the current fiscal year and the passage of a bill that could grant Perdue the discretion to make cuts to the current budget up to $400 million.
Griffin said he is hesitant to rely on the $700 million estimate until after tax season is over.
"April is the largest revenue month in the state of North Carolina," he said. "If they're still $700 million ahead after April, I will feel very positive about that number."
The remaining $300 million could come in cuts made by Perdue before June 30 if the General Assembly passes a bill granting her the authority to make cuts.
Griffin said that if those cuts effect public education, the school system could end up reverting $800,000 back to the state if cuts are made proportionately. He added that reverting funds is not a new concept to the system.
Two years ago, the system reverted $800,000 to the state.
Griffin also told the board how the system has been preparing for cuts over the last few months. Last fall, Perdue asked all state agencies to prepare budget plans with cuts of 5, 10 and 15 percent.
Griffin said that the school system expects cuts of at least $8.2 million next year, which includes a 5 percent cut in state funding and the expiration of $5.2 million in federal stimulus funding at the end of this fiscal year.
At 10 percent cuts, the system will lose $11.2 million, and cuts of 15 percent, a worst-case scenario, could cut out $14.2 million.
Griffin told the board that the system has streamlined costs over the years by eliminating 20 positions at the district level and reverting six vacant positions back to the state, instead of filling them.
The system has also eliminated 38 teaching assistant positions, 23 of which were layoffs, and made budget reductions across the board, which Griffin said would continue to happen.
Less Money Per Child
Griffin added that additional state budget cuts would impact a system that already spends less money per student than the national and state average.
According to rankings from the National Education Association, North Carolina ranks 42 out of 50 states in per pupil spending. During the 2008-2009 year, North Carolina spent $8,743 per student. The national average was $10,190. Moore County Schools spent $8,436.
Griffin said the current numbers on spending are even lower for the state this year. He told the board that Moore County ranks 84th in per pupil spending among the state's 115 school districts.
He explained that the school system ranks higher because it does not qualify for additional state funding that would be allocated to areas with less income.
Moore County ranks eighth in per capita income for the state.
Griffin added that Moore County ranks 28th in local funding.
When Griffin finished his report, board member Lorna Clack thanked Griffin for his presentation though the financial outlook was a little "gloomy" for Valentine's Day.
"Our Valentine's getting littler," she said.
The board's next regular meeting will be March 14.
Contact Hannah Sharpe at firstname.lastname@example.org.
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