Wake schools face a $7.5 million budget shortfall. It could lead to painful cuts.
Controversial ideas such as shutting down a popular Wake County high school, changing school building temperatures and which students get a laptop were among the ideas floated Wednesday due to looming school budget issues.
Wake County school administrators cited Wednesday a $7.5 million budget shortfall that will need to be addressed this school year. At the same time, administrators estimate the district will need an additional $69.4 million next year in local funding from the Wake County Board of Commissioners.
The budget news led staff to have school board members break out into small groups to discuss potential areas to study to make cuts as well as to raise additional money.
“We know that we have a lot of services that we provide and a lot of programs that we fund that we all like and think are good programs,” said school board chair Chris Heagarty. “If they were things that obviously weren’t working or were bad, it would be easy. We’d just discontinue them.”
Potential cuts to explore
During Wednesday’s brainstorming session, board members suggested using famous alumni to solicit donations for schools. Another idea was to explore allowing homeschoolers to play on high school athletic teams if they enroll part-time so Wake gets state funding for them.
But the cuts were the most painful ideas. Those suggestions include:
▪ Study whether Crossroads FLEX could be incorporated into other high schools instead of having its own building in Cary. The specialized school costs more per student to run but allows students to take a mix of online and in-person classes on their own schedules.
▪ Adjust the temperature settings in school buildings to be a little warmer or a little colder depending on the weather conditions.
▪ Study whether all elementary school students or K-2 students should still get a district-issued computer. Wake issued a Chromebook to every student during the pandemic.
▪ Convert under-enrolled multi-track year-round schools to a traditional calendar. Schools get teaching positions based on how many students they have so Wake puts additional resources to under-enrolled schools.
▪ Reevaluate the formula used to provide assistant principals. Wake’s formula is more generous than other districts, leading to schools getting more assistant principals.
▪ Convert Restart schools, a program for chronically low-performing schools, to a traditional calendar. Many restart schools operate on a modified calendar, contributing to costs of running buses on that schedule.
▪ Freeze hiring of non-essential positions until 2026.
“Not all of these are things we are necessarily advocating that we shouldn’t do,” Heagarty said. “But these are things that we should explore and look at.”
Superintendent Robert Taylor said they’ll need to get the public and staff onboard with any changes while explaining that the district’s resources are finite.
Budget shortfall this year
Wake County is required to maintain a balanced budget so it must erase any shortfalls. Currently identified shortfalls include:
▪ $3 million in child nutrition due to factors such as higher food costs and raises in employee pay.
▪ $2.5 million from last year’s utility costs being more than what’s currently budgeted
▪ $1.3 million in charter school payments from more Wake County students than expected attending those schools.
▪ $658,000 to pay for criminal records checks of job applicants and school volunteers.
In past years, Wake could tap into its rainy day fund and savings from vacant positions. But Wake has fewer vacancies than normal this school year. Heavy use of the rainy day fund has dropped it below the recommended level the district uses for dipping into it to pay for extra expenses.
The district learned last week it will get additional state funding due to Wake having more students than expected. This will cover most of the shortfall with the district looking elsewhere to cover the rest.
Chief Business Officer David Neter said those additional measures could include things like freezing vacant positions, restricting travel and restricting non-personnel related spending.
“There’s a good potential of putting some spending restrictions and hiring restrictions back in place because we have so little wiggle room that we have had in the past,” Neter told the board.
$69.4 million in additional needs
Administrators are already working on the budget for the 2025-26 school year.
Commissioners currently provide $702.6 million of the school district’s $2.2 billion annual operating budget.
At this early stage, administrators estimate it would require an additional $69.4 million next year from the county to fund things such as employee raises and increases in benefits, increased charter school enrollment and the opening of four new schools. The $69.4 million includes replacing $13 million that was taken from the rainy day fund this year to fund items.
Wake is projecting the state will raise school employee salaries by 3.5% so it would have to match that in the local salary supplement. Administrators are also looking at a 1% locally funded salary increase and an 80-cent raise in the minimum pay for hourly employees to $18.55 an hour.
Administrators threw out the caveat Wednesday that the $69.4 million is still a rough estimate.
This year, commissioners gave a $58.3 million increase in school funding. School administrators said they don’t anticipate getting a similar large increase next year based on county revenue projections.
School board member Lynn Edmonds said she’s worried about the budget impact of the state increasing spending on private school vouchers and potential cuts in federal funding from the new Trump Administration.
“I’m horrified at what the potential is in 2025,” Edmonds said.
Wake says it’s underfunded
Wake is funded significantly less than most other districts in the country, according to Neter.
Last school year, Wake spent $12,200 per student. That’s compared to $17,300 per student in Chapel Hill-Carrboro and $13,100 per student in Charlotte-Mecklenburg. An additional $100 per student in Wake would require $16 million more per year. For $1,000 more per student, it would cost $160 million.
Like other North Carolina school districts, Wake gets the majority of its funding from the state. Neter cited a recently released report from the Pennsylvania-based Education Law Center that ranked North Carolina 48th in the nation in funding level.
“This state is investing significantly far less of its wealth, or economic output, in education than most other states,” Neter said.
Wake says it’s not easy to make budget cuts because 94% of employees work directly in schools The district is in the process of picking outside groups to do studies looking at staffing levels and whether pay for employees is competitive enough.
“We have a large budget, but we know a lot of it is spent on personnel,” said Taylor, the superintendent.
Neter acknowledged that there’s no direct correlation between increased funding and better academic outcomes. But he said Wake is doing a better job than a lot of districts in the state and nation while spending less per student.
“Imagine what we could do with more?” Neter said.
This story was originally published December 18, 2024 at 2:35 PM with the headline "Wake schools face a $7.5 million budget shortfall. It could lead to painful cuts.."
