N.C. explores use of $300 million

North Carolina leaders are trying to figure out what to do with $300 million in federal money meant to save teachers' jobs.

Between provisions in the new state budget and decisions made by local school systems, North Carolina hasn't had massive teacher layoffs, and so far local school systems haven't been threatening to dump jobs.

"Many school systems, with the state's help, have their bills paid for the year," said Mark Johnson, a spokesman for Gov. Bev Perdue, a Democrat.

So state officials spent part of the day Thursday getting clarification on exactly what can be done with the federal windfall. The word from Washington: A lot.

The state has until Sept. 30, 2012, to spend the cash, which can be used for salaries for most education jobs outside of administrative positions. There are no restrictions on using the money as a substitute for already approved state spending.

"Our first priority is to bring back the folks who were laid off," Johnson said. "Beyond that, we need to review our immediate needs and our potential needs for next year."

It's no surprise that a huge pot of cash coming into the state has officials and interest groups thinking about where to spend it. But there are reasons to hold back. Next year, the budget is projected to have a $3 billion deficit. That figure is nearly 15 percent of state spending.

Superintendent of Public Instruction June Atkinson said the money would be very helpful next year.

"We have yet to find a solution for the cliff we're going to face," she said.

State budget writers spared education from the worst cuts this year, but Atkinson said the money could still be used to cut class sizes and restore high school courses that some districts eliminated.

Brian Lewis, a lobbyist for the N.C. Association of Educators, said the money should be used to restore teaching and teachers assistant jobs cut in the last fiscal year.

"We need teacher assistants," he said. "We need teachers. Overcrowded classrooms are still the norm."

Rep. Ray Rapp, a Madison County Democrat and an education budget writer, said the lack of restrictions on replacing state spending could help mitigate deep cuts to other areas of state spending. The Democrats who wrote and passed the state budget chose to minimize cuts to education at the expense of other categories, such as Health and Human Services.

"In terms of some of the needs in the areas that were cut, that money could be a major boost," Rapp said.

Rep. Thom Tillis, a Cornelius Republican, said the state should not be in a hurry to spend the money. Anything funded with one-time grant money will only add to the spending deficit ahead.

"If we've figured out a way with the cuts to overcome the problems for teachers, why in the world would we just spread that somewhere else?" Tillis said.