June 30, 2010

The House and Senate returned on Monday to meet at 10:00 AM. The House Democrats and House Republicans caucused on Monday at 5:30/6:15, respectively, to discuss their strategy for the budget vote. The budget is a conference report and though they can debate the document for hours on end, they cannot amend or change the conference report. They can only vote Yes or No. They read the Conference Report (State Budget) in on Monday night and voted on Tuesday 66-49 to pass the report on second reading. The House Republicans

On Wednesday, they are expected to pass the bill on third reading, send it to the Governor where she will likely have a signing ceremony. This is the first time in seven years they will pass the budget before July 1. They rumor is they will try and adjourn sine die by Friday, July 9, which happens to be the day the final State revenue figures are due to be reported and word is they are not good. So the legislature needs to leave and get out of town having passed the budget and all other bills they deemed necessary this year before more troubles arise.

The Education Lottery probably accounts for the biggest change to public school funding for 2010-2011. The legislature had an $800 million funding hole to fill this year. Last year’s budget was just over $19 billion though after it passed the Governor had a 5 percent hold back on funding for all state agencies except education. This year there is an added $518 million beyond the $800 million to cover a possible shortfall in Federal funding for Medicaid aid to the States. The General Assembly has added a contingency plan to the budget should those funds not materialize by January 1, 2011. That plan includes 8 items with the last two being retirement contribution reduced and a 1 percent funding cut to all state agencies, respectively. The 1 percent cut will impact education in this plan and that could mean $70 million to all of public schools which amounts to around $7 million in additional reduced funds to Wake County Schools.

Some of the key funding and budget special provisions (brief) are noted below:

Education Statewide Funding Key Issues 2010-2011:

Lottery Class Size Reduction Funded: $221.6 million

Lottery Capital Funded: $ 113.7 million (reduced from projected $170 million)

Education Stabilization Fund Transfer (swap): $373 million plus (unknown increase)

LEA Flexibility Cut: $304.8 million (Increase $80 million from 2009-2010)

Mentor Pay Additional Cut: $9.2 million (No Program funding for 2010-2011)

Central Office Additional Cut: $2.4 million

Limited English Proficiency Additional Cut: $4 million

Transportation Operations Additional Cut: $10 million

Transportation Bus Replacement Additional Cut: $11.9 million (Emergency Bus Replacement only)

Instructional Supplies Cut: $3.3 million

NC Virtual Public Schools: $5.6 million (Eliminated State funding)

Staff Development Cut: $12.62 million (Eliminated all funding for 2010-2011)

Textbooks Cut: $112.9 million (Eliminated all but $2.5 million for 2010-2011)

Corporate Income Tax for School Construction: $64.5 million (Funding Suspended for 2010-2011)

Drivers Education Funded: $32 million (Funding restored)

The link to the money report:


State Education Policy Key Issues:

Extraordinary Measures to Manage Loss of Federal Funds: Requires 8 funding sources with the last one being a 1 percent cut to all state agencies including education ($70 million in education)

Lottery Funds: Various funds will be transferred within the State Lottery Fund in 2010-2011. To offset potential cuts to public schools. Capital funding for schools is reduced in this transfer.

Disadvantaged Student Supplemental Fund:  The State Board in allotting DSSF funding shall take into consideration the extent to which the LEA’s policies or expenditures have contributed to or is contributing to increased segregation of schools on the basis of race or socio-economic status.

Protection of the Classroom while Maximizing Flexibility: Allows for the transfer of funds except for school-based positions. LEAs are required to maximize federal funds and desi9gnate all Title I-eligible schools prior to dismissal of classroom-based personnel. Allocation of K-3 teachers and class size requirements shall remain unchanged.

Federal Funds for Education: If additional federal funding is received for public schools the State cannot supplant state funding, but must allocate the additional federal funds to the schools as intended.

Driver Education Program:  The Driver Education program will be reviewed to determine the most appropriate source of funds to support the program and outcomes of the funding on student driving, recommending improvement of services, reduction in costs and/or duplication, and alternative funding mechanisms including fees. Recommendations, November 1, 2010.

NCVPS Formula: The State Board shall implement an allotment formula for NCVPS starting with 2010-2011 school year. The formula shall create a sustainable source of revenue to support student enrollment by adjusting LEAs teacher allotments which are based on average daily membership.

Community College Formula Implementation:  A funding formula for 2011-2012 that will provide funding to LEAs for the purpose of paying tuition for high school students taking Community College courses.

Furloughs: LEAs may furlough employees up to two days with conditions set forth in the provision.

The link to the budget special provisions:



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