Fuel costs melt down school budgets

State could withhold $50 million from districts to pay for filling tanks, giving teachers bonuses

RALEIGH -- Soaring diesel fuel costs could force schools to reduce field trips and athletic events and lose millions in state financial support for hiring teachers.

At an emergency meeting of the State Board of Education on Tuesday, officials warned that they might have to withhold $50 million from school districts so they could have money for fuel and teacher bonuses.

For districts such as Durham and Johnston counties, it could mean the loss of $1.1 million. Wake County could lose $4.7 million.

"I do want to sound an alarm and warning that we're heading in the wrong direction," said Howard Lee, chairman of the state board.

Even if legislators come up with the money to cover the cost of diesel fuel that the state reimburses for all of North Carolina's 115 districts, it won't completely shield districts from cuts.

The state doesn't reimburse schools for diesel fuel burned by buses on field trips and athletic events. That's causing at least one district, Johnston County, to re-examine how buses are used.

Dan Jones, Johnston County schools' associate superintendent for finances, said schools there have been asked to consider limiting field trips. He said schools have also been asked to cut back on athletic contests outside the county.

"It's just like the personal things we do," Jones said. "We don't take long trips now like people don't."

A similar pattern has occurred nationwide: School districts have cut field trips and ended the year early to save on fuel.

The problem has been sharp rises in the price of diesel fuel. Even though the state gets districts a lower bulk rate at $4 a gallon, the discounted rate was $2.13 a gallon this time a year ago.

The state tries to cover most of the fuel costs that school districts pay to get students to and from school.

But education officials say the budget being worked on by a conference committee of the General Assembly would give less money for K-12 public education than what had been adopted by either the state House or state Senate.

Philip Price, associate state superintendent for financial and business services, said the preliminary state budget would provide $30 million less than needed to pay diesel fuel costs. He said it would reimburse districts at $1 less a gallon than they're now paying for fuel.

Bonus sum falls short

In addition, Price said, the proposed budget provides $70 million to pay teacher bonuses that are based on how well students do on state exams -- about $37 million less than what school leaders say is needed. Under law, teachers can get a maximum bonus of $1,500.

Unless the state budget provides more money for diesel fuel and teacher bonuses, Price estimates $50 million would be needed from school districts to make up the difference. As North Carolina's largest district, Wake County could take the biggest hit -- $4.7 million. To make that up, money would likely be siphoned from what the state provides to pay salaries for teachers and other employees.

"If we don't have that $4.7 million from the state, it will be challenging," said Wake Superintendent Del Burns.

Shortly after the state board meeting, Senate leaders said they would seek to boost the fuel money and teacher bonuses. Sen. Linda Garrou, a chief budget writer and Winston-Salem Democrat, said they would agree to additional $20 million increases for both fuel and bonuses.

"We've got to do better," Garrou said. "We've got to get those bonuses up. The teachers have earned them, and we've got to give them their gas money."

She and Senate Majority Leader Tony Rand, a Fayetteville Democrat, said they did not know where the money would come from.

Districts are continuing to look for ways to reduce fuel costs.

In Orange County, a committee has been formed. In Charlotte-Mecklenburg, which has the state's largest bus fleet, leaders have floated the idea of cutting back on bus service, especially for magnet schools.

Wake school leaders said things haven't gotten that dire yet. But rising fuel costs forced the district to take $2.2 million out of its rainy day fund in November.

Kevin Hill, vice chairman of the Wake school board, said he would not support moving away from the district's nationally recognized policy of busing students to promote diversity. "I don't sense any sentiment for pulling away from our commitment to healthy schools," he said.

(Staff writer Dan Kane contributed to this report.)