Southwest Wake News

June 11, 2014

Wake leaders could use liquor-sale funds for one-time teacher-pay boost

The Wake County Board of Commissioners was told Monday that it could use excess ABC revenues to give teachers a one-time bump in supplemental pay.

County Manager Jim Hartmann told the Wake County Board of Commissioners on Monday that it could use excess revenues from liquor sales to give teachers a one-time bump in supplemental pay, but should wait until the state completes its teacher-pay plan before deciding what to do next.

Hartmann made the recommendation to board members at their budget workshop on Monday.

The board had asked Hartmann at its last meeting to talk with county school officials to find a way – without raising taxes – to make Wake’s average teacher salary supplement the highest of any county in the state. Supporters of much higher salaries for teachers in the state’s largest school system called the move recommended Monday insufficient.

Most public school teachers are paid by the state. But counties can supplement their pay, and Wake now pays an average supplement of $6,204 per year. The system paying the highest supplement is Chapel Hill-Carrboro, which gives teachers an additional $6,441.

Commissioner Paul Coble said having the highest supplement would help Wake recruit new teachers.

“That gives us a competitive advantage,” he said.

Democrats said being No. 1 in teacher pay supplements would be more of a symbolic gesture, amounting to about $237 more annually per teacher on average. At a budget hearing last week, commissioners heard from dozens of teachers who said their salaries are not enough to live on. Many spoke of having second and third jobs. Some qualify for housing aid and food assistance.

In the face of such need, Commissioner James West questioned the purpose of putting a few hundred dollars more per year in teachers’ pockets.

“I just don’t think that that amount is going to do a whole lot” to increase teacher morale or job satisfaction, West said.

The county and the school system are in the process of crafting their budgets for the 2014-15 fiscal year. Commissioners will be asked to approve a budget at their meeting Monday.

A boost from the ABC

Hartmann proposed last week that the school board use its own fund balance to pay for an increased supplement. On Monday, he recommended that the board use $3.75 million in revenues from the county’s ABC Board to raise teachers’ supplemental pay for the coming year. The ABC Board generated more revenue in 2013-14 than projected, and Hartmann did not include the extra funds in the budget he presented to commissioners last month.

But the ABC surplus is not a reliable source of teacher salary supplements from year to year.

So Hartmann, Wake schools Superintendent Jim Merrill and other staff have talked in the past week about transferring money from the schools’ fund balance to the county’s fund balance. Deputy County Manager Johnna Rogers said that if the schools could transfer $20 million from their fund balance to the county’s fund balance, it could free up about $4 million in county tax funds per year, which could be used for future teacher supplements.

To keep its AAA bond rating, the county has to maintain a fund balance of 30 percent of its current-year revenues. For rating purposes, the school system’s fund balance does not count toward the county’s fund balance.

The school system has a policy of keeping a fund balance of no more than 6 percent of the subsequent year’s appropriation from the county, but has waived the policy in recent years to keep the excess, saying the extra cash might be needed to make up for shortfalls in state funding.

The fund balance is about $36 million, but the school system had planned to use all but about $6 million of that in the coming year’s budget.

In the meantime, the N.C. Senate has proposed a controversial plan for raising teacher salaries, and the House is set to release its budget proposal on Tuesday.

If the legislature ultimately approves a budget with a raise for teachers, it may finance the raise by passing on more education costs to counties.

Waiting for the state

Hartmann said he and Merrill agree that the schools and the county should wait until the state passes its budget to see what if any additional costs the state will pass along. Then, in the fall, Hartmann said, two entities can decide whether to transfer money from the fund balance. In the meantime, he said, they will continue to talk regularly.

Though they did not immediately resolve the issue, Republican board members praised county and school staff for being able to hold productive discussions on funding issues, something commissioners and school board members have struggled with for years.

Democrats, the minority on the board, were not as encouraged.

The school board asked the county for a $39.3 million increase in funding for the coming year, $29.1 million of which would have been used for a 3.5 percent pay raise for all school employees. The budget Hartmann recommended included a $10.2 million school budget increase, with no raise.

School board Chairwoman Christine Kushner said by phone after the meeting that she had not seen the plans presented Monday. But she said they fall short of the amount the school system needs to provide teachers adequate pay.

“We need a long-term plan for increasing our teacher salaries,” she said.

Kushner said the school board hasn’t discussed what it will do if it doesn’t get the full $39.3 million increase.

Staff writer T. Keung Hui contributed to this story.

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