Agenda - 04-26-2011 - 1 - Laserfiche WebLink

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3 Orange a1 1 ge o 1 1 1 1\ Schools 200 East King Street Hillsborough, NC 27278 G. Patrick Rhodes (919) 732 -8126 Telephone Superintendent (919) 732 -8120 Fax www.orange.kl2.nc.us Superintendent's Budget Message 2011 -2012 The impact of North Carolina's massive budget deficit and the loss of federal stimulus dollars for K -12 public education have been sources of concern for school systems across the state. Although Orange County Schools has been proactive in preparation for these funding reductions, projected shortfalls approaching 6.4 million dollars pose a serious concern. Orange County Schools is entering a period where we will face the greatest financial challenges the district has ever experienced. Shrinking State Appropriations The North Carolina General Assembly is currently dealing with an estimated 2.5 billion dollar budget deficit. In response, the governor and legislators have indicated they will reduce funding for state agencies including K -12 education. Since 2008 state appropriations to Orange County Schools have declined by 12 %, or nearly 5 million dollars. In an organization which has 85% of its budget tied to salaries and benefits, deeper funding cuts would likely result in future staffing reductions throughout the system In a state that currently ranks near the bottom in per pupil funding (46th) and average teacher salary (45t"3, further cuts in state support for education will have serious implications. Declining Federal Appropriations In 2009, the federal government provided 50 billion dollars to help states restore funding cuts to education. To prevent job loss, Orange County Schools used most of these dollars to maintain the employment of school -level positions, including teachers, teaching assistants, and custodial staff. The federal appropriation to the district will decline by 2.4 million dollars in 2011 -2012. This loss, combined with on -going state cuts, is creating a projected budget shortfall of 6.4 million dollars. Further compounding the reductions in state and federal funding, the district is facing significant increases in our contributions for the state retirement system and employee health insurance. These unfunded mandates from the state are projected to cost the district more than 250,000 dollars. While these factors are a part of doing business, the impact of each increased expenditure is magnified in the light of the deep reductions in funding. Fortunately, our students continue to benefit from strong funding support from the citizens of Orange County. At the local level, revenues continue to be stable and we hope to maintain the same per pupil expenditures. We are grateful to the Board of County Commissioners (BOCC) for maintaining the one bright spot in our revenue picture. This support, combined with good stewardship and the creation of internal efficiencies, has put us in a better position to withstand the budget cuts ahead.