A reversal of fortune?

Governor’s budget writers backtrack on 2% reduction for public schools; education advocates suggest tight re-election battle may be the motivating factor

North Carolina officials say they have been assured by one of Gov. Pat McCrory’s budget chiefs that a controversial directive to ready a $173 million budget cut will not apply to the state’s public schools.

The seeming reversal comes after Policy Watch’s report last month that all state departments, including the public schools, were called on by McCrory’s budget director to submit 2 percent budget reduction proposals for the state’s 2017-2019 biennial budget, a move that prompted a swift and angry rebuke for McCrory’s office from top education officials and public school advocates.

Such a cut would have had major implications for virtually every component of the state schools budget, threatening thousands of positions for teachers and teaching assistants and spending on low-wealth schools and classroom supplies.

But in an Oct. 20 email obtained by Policy Watch this week, an official with McCrory’s Office of State Budget and Management (OSBM) indicated it was his office’s intent to exclude the state’s public school fund from the budget exercise in preparation for development of the state’s budget.

“We are not focusing on any reduction issues at this time for a couple of reasons,” wrote Adam Brueggemann, assistant state budget officer for education in OSBM.

“First, our office is laser focused on hurricane recovery and will be for the next few weeks. Second, as you may have seen, it was announced today that we are $158 (million) ahead of our revenue targets through the first quarter. So although offering 2% reduction options is generally sound budget development practice, we do not foresee a need to make reductions to (the Department of Public Instruction) or the (State Public Schools Fund).”

Brueggemann’s explanation came nine days after Policy Watch’s report, in which DPI’s chief finance officer, Philip Price, said his office had not been notified of any plans to exempt public schools from the major budget directive.

Additionally, in a series of emails with Policy Watch last month, OSBM Director Andrew Heath never disputed that the 2 percent cut would apply to public schools when questioned, calling it a “longstanding and prudent” budget process that all departments identify areas where cuts could be made.

Heath did not respond to immediate requests for comment by Policy Watch Wednesday.

Meanwhile, Mark Jewell, president of the N.C. Association of Educators, a teacher lobbying group based in Raleigh, suggested McCrory’s budget advisers, with the governor embroiled in a tight campaign for re-election, appear to be backtracking after news of the reduction request generated a swift backlash from public school advocates.

[Tweet ““I guess an election that is a week away changed the mind of our governor who has fallen short on providing our students the resources they need to be successful,” Jewell said.”]

“I guess an election that is a week away changed the mind of our governor who has fallen short on providing our students the resources they need to be successful,” Jewell said. “Many of our schools are starving for adequate funding, and requiring school cuts in a surplus budget year was more than a bad Halloween prank.”

School advocates argued that it was unusual for state leaders to push cut proposals at a time when the state has reported a surplus in revenues, but, in an email last month, Heath defended his office’s move.

“Under Governor McCrory and in prior administrations, OSBM has consistently asked for agencies to identify efficiencies so that we are responsibly spending taxpayer money,” Heath wrote.  “The 8/26 memo is reflective of sound budget practice which has enabled Governor McCrory to target spending in priority areas such as education, teacher pay and savings reserve. “

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Yet, despite the apparent change in direction from OSBM, there remains a significant gap between school officials’ spending needs and early indications from the governor’s budget office.

School leaders told the State Board of Education Wednesday that they will still be expected to limit any request for budget expansion to 2 percent, meaning additions should not exceed $173 million. It’s unclear whether schools would be required to make equivalent cuts to their spending to offset budget expansions in any area, as indicated in an earlier OSBM memo.

State Board of Education members’ top budget expansion priorities, generated through months of discussion, total more than $517 million, not including expected requests for 1 percent raises for teachers and administrators.

North Carolina ranks a lowly 41^st in the nation in teacher pay and 49^th in administrator pay, according to national estimates, while per-pupil spending, according to the National Education Association, ranks just 43^rd in the U.S.

Board members’ budget priorities include calls for millions in funding to hire additional teaching assistants and shore up long-bemoaned shortfalls for classroom supplies, intervention for low-performing schools and districts, technology upgrades, special needs children and more.

State board member Wayne McDevitt said Wednesday that the 2 percent restriction set by OSBM should not limit school officials from putting forth their own spending proposal with identified needs.

“This is just a $517 million piece of a larger puzzle,” said McDevitt.

Board member A.L. “Buddy” Collins said school officials might be better served offering McCrory’s administration and lawmakers with a long-term forecast of the schools’ needs.

“Instead of saying we want this money, It’s better to say this is our long term goal to fund these levels in these areas,” said Collins.

State board members are expected to vote on their proposed budget additions Thursday, although—with McCrory embroiled in a tight race for re-election—there remains uncertainty about what administration will be negotiating the school budget.

Additionally, it’s worth nothing that lawmakers in the N.C. General Assembly have typically drafted wildly different budget plans than those put forth by the governor’s office in recent years.