Budget Update 
Planning for 2016-2017

The Board of Education held a budget work session earlier this week and preparations are being made for the 2016-17 budget. The budget draft to be presented in May will include additional reductions in staff due to the increased cost of salaries and benefits, and not enough revenue to sustain staffing at current levels. We have been preparing for these adjustments since the legislature adopted the state budget last fall.
 
Background
The state legislature adopted a budget in the middle of the 2015-16 school year, forcing the Board of Education to authorize the allocation of $488,500 in fund balance in November 2015. Without relying on fund balance, or the district’s savings account, the board would have been required to reduce staff in the middle of this school year. Our administrative staff was directed to begin reductions of staffing through retirements and resignations, and to develop a plan for 2016-17 to adjust staffing and resources to align with projected revenue.
 
Planning for Reductions in 2016-17
We took a different approach to developing the budget this year. Instead of a traditional budget committee all principals and district administrators began meeting months ago, and used a change model developed by the BB&T Institute. BB&T Institute staff graciously trained our administrators on the change model they use in their organization. Through this process, our team spent days examining every part of our school district, from staff to programs, and identified and prioritized potential reductions. Since 2008-09, we had already eliminated 82 positions and those reductions were evenly distributed across every area of our school district; including teachers, teacher assistants, administrative staff, support staff, custodial, and maintenance staff. During that same time, we have seen a decline in student enrollment of approximately 5%, which also affects our funding.
 
In planning for 2016-17, we will need to reduce another 15 positions across Davie County Schools to balance the budget. We can no longer dip into fund balance to sustain positions. Since over 87% of our budget is in salaries and benefits, there was no way to make the necessary adjustments without affecting staff positions. The positions affected include K-8 Spanish, some positions in ESL, a sign language course at the high school with declining enrollment, and a few other positions across the district. Many of our neighboring districts have already cut similar positions and programs.
 
We are making decisions at this time of the school year so those staff affected can be considered when other vacancies arise, or will have time to seek other opportunities. Teachers affected will have an opportunity to add areas to their teaching license if necessary, allowing them to be eligible to teach in other subjects and apply for other teaching positions. None of these reductions have come as a recommendation, but rather as a necessity to balance the budget within existing resources.
 
While these cuts are difficult, they have caused us to explore different ways of doing business. For example, with cuts to elementary Spanish, we are exploring a dual language immersion program as a future possibility, as well as looking for ways to incorporate more of the basics of the Spanish language, culture, and global awareness into our existing curriculum. In addition, we are adding four sections of Spanish at the high school to give more students an opportunity to take a full semester of Spanish (our elementary instruction was limited to 25-30 minutes per week.)
 
Local Support
Without the support of the Davie County Board of Commissioners in 2015-16, and the interlocal agreement for 2016-2018 that was recently adopted by the Commissioners and Board of Education, we would be facing over $1 million in reductions on top of what has already been identified as necessary cuts. We are thankful our current commissioners have increased local support for public education.
 
Changes Over Time
To give our staff, parents, and community a perspective of why we are in this situation, it is important to examine how state allotments have changed over time. Almost 70% of our budget comes from the state public school allotment. Listed below are a few examples of changes in state support for public education from 2008-09 to 2015-16. Since 2008-09, the cost to employee staff has increased significantly. The legislature sets the retirement contribution and state health plan rates for school districts. That retirement contribution per employee has increased by over 88%, and the cost of employer provided healthcare has increased 32%.

State Allotments
Teacher Assistants
The teacher assistant state allotment to Davie County Schools has decreased from $2,248,308 to $1,481,432 (reduction of $310 per K-3 student). Along with the rising cost of matching benefits, this decrease has resulted in fewer teacher assistants working with our children.

Assistant Principals
The assistant principal allotment has been reduced by 19%, or $98,700.

Instructional Support
The allotment for instructional support positions such as counselors, media specialists, social workers and psychologists has been reduced by $201,837.

Supplies, Materials, and Textbooks for the Classroom
The allotment for classroom supplies and materials has been reduced from $58.77 per student to $28.38 per student. The textbook allotment, and now what has been changed to the 'textbook and digital resources' allotment, was $67.15 per student in 2008-09 and is now $29.07 per student, a reduction of almost $250,000.

Non-Instructional Support
This state allotment covers some office clerical, custodians, and substitute teachers and has been cut by 12% or $207,939.

Professional Development
In 2008-09, DCS received $61,521 for professional development for teachers. No staff development funding was allotted in 2015-16.
 
There have been some state allotment categories that have increased since 2008-09, such as the allotment for children with special needs. Even with these increases, the cost of matching benefits for employees has outpaced the increases to these dollar allotments.
 
If the same state allotment formulas used in 2008-09 for the categories listed above were being used in 2015-16, Davie County Schools would have received $1.6 million more in state funds. Thankfully, our local board of commissioners has increased local funding to fill some of this gap, but cannot be expected to make up all of the difference.
 
Low Wealth Formula
Through a complex formula, the state provides funds to school districts that have wealth rankings below the state average. As Davie County’s tax base has improved and poverty ranking has changed, our county’s ability to contribute to public education has increased according to this state formula. These positive changes in our community have resulted in a reduction of Low Wealth state funds coming to Davie County Schools. Our Low Wealth allotment in 2010-11 was $552,000 and is projected to be only $144,000 in 2016-17.
 
Looking Ahead
On a positive note, beginning teacher salary has increased to $35,000 this year and some teachers had a salary increase last year. More salary increases are anticipated this year. That is good news since North Carolina ranks 46th out of 50 states in teacher pay, and 50th out of 51 (includes D.C.) in principal pay.
 
News like this is never pleasant to share, but we hope you now have a better idea of the difficult situation we have been dealt. Regardless of the circumstances, our focus remains on providing the best education we can possibly provide for our children with the limited resources we are allotted. We appreciate your continued support of the public schools in Davie County.
 
 
 
 
 
Sincerely,
 
 
Darrin L. Hartness, Ed. D.
Superintendent
 
 
 
 
(336) 751-5921  |  davie.k12.nc.us |  220 Cherry St, Mocksville, North Carolina  27028 
 
 
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