School budget tight – but workable

By: Frank Bradley
Sentinel Writer

On Monday, the Clay County school board passed a budget resolution that was within the guidelines of the North Carolina state budget. North Carolina appears to be faring better than many other states, according to a recent report by the National Association of State Budget Officers.
While some states are experiencing a first quarter budget shortfall in the 8 to 10 percent range, which is having a significant impact on their ability to adequately fund public schools, North Carolina’s first quarter revenue is only about 1 percent below projected revenues. Collections through September are running $45 million below the state’s $4.2 billion target.
“I think we are going to be all right if the revenues projects hold,” Superintendent Scott Penland told the board on Monday. “However, we’re going to keep an eye on it.”
The report showed that withholding tax collections in the state continue to erode and are 3.5 percent below last year. There are many contributing factors to the revenue loss; however mounting job losses are the leading source for this drop.
The July to September 2009 period was the worse quarter for collections since the start of the recession. Withholdings (wage & salary income taxes) continue to fall as job losses continue to mount. Until total employment numbers start to grow, withholding taxes will continue to weaken; hence the state’s revenues will continue to fall or at best flatten out.
Consumer demand is also weak, meaning less sales tax revenue for the state. It is not expected to rebound anytime soon, remaining weak for most of 2010 and 2011.
The state is allocating just over $10 1/2 million for instructional and supporting services in Clay County for the current fiscal year. Another $1.8 million is being appropriated for school administrative and operational funds in the Local Current Expense Fund. Of that amount, $834,300 is county funds.
In other matters, the board approved a motion to explore contracting with Johnson Controls, Inc. or another energy management company to reduce the cost of electrical and fuel usage for the schools system with the proviso that the plan would not cost the school money and should save it money by implementing ways to become energy efficiency and or conserve energy.
The board also discussed a new state policy concerning a code of ethics which is to be required of all board members. The policy will require all members to take two hours of training and must be adopted by next March. The purpose of the state’s legislation is recognition of a need to conduct the affairs of the board in and open and public manner, complying with all applicable laws governing open meetings and public records.