20 low-wealth NC school districts could lose millions in state funding. Here’s why

Twenty low-wealth school districts could be penalized $37 million due to a difference in interpretation about how to use state funding to boost teacher pay.

The 20 districts were among the North Carolina public schools that received $100 million in new state funding in 2021 to boost the pay of teachers.

But the districts didn’t follow the legislature’s requirements about not using state funds to replace local dollars for teacher salary supplements, according to a report adopted Thursday by the State Board of Education.

The state board asked Thursday that state lawmakers modify the law so that those poor districts aren’t penalized. Any potential relief could come in this year’s state budget.

“These are not some of our wealthiest districts around the state,” said Alan Duncan, vice chair of the state board. “This would have a genuine impact on some districts that would be extremely impactful and negative on their ability to continue attracting quality teachers or educators.”

New state teacher salary supplement

The state pays the base salaries for most teachers. School districts often use local and federal funds to supplement the salaries.

In addition, school districts that qualify for low-wealth funding from the state also can use that money to pay teachers.

In 2021, the General Assembly created a new state-funded salary supplement for teachers. The pot has risen to $170 million this school year.

In return for the new state funding, school districts are to use it “to supplement and not supplant non-state funds provided for salary supplements for teachers.”

Alexis Schauss, chief financial officer of the state Department of Public Instruction, said DPI interpreted it to mean that districts are required to maintain the same level of salary supplement expenditures from local and federal funds.

Schauss said the 20 districts did use the new state funding to increase pay for teachers. But she said they also replaced some of the local money used for teacher salaries with funding from the state’s low-wealth supplemental fund.

‘Difference about interpretation’

The 20 districts differed with DPI’s interpretation of the law. But both the House and Senate budgets side with DPI’s interpretation.

The state board was supposed to send to the General Assembly by April a report on how schools have used the new state teacher salary supplement. But the report was delayed as DPI tried to resolve the issue with the school districts.

It would cost the districts $6.6 million to revise their budgets to stay in compliance with state law. For a district like Cumberland County, it would mean a $160,000 budget adjustment. But Schauss said Nash-Rocky, for example, would need a $1.5 million budget change.

Duncan, the state board vice chair, said asking these districts to come up with $6.6 million is not a trivial amount.

“There has been difference about interpretation,” Duncan said. “These are not small matters. This is significant money that is involved.”

NC districts that could lose money

▪ Alamance-Burlington Schools

▪ Bertie County Schools

▪ Bladen County Schools

▪ Caldwell County Schools

▪ Cumberland County Schools

▪ Davidson County Schools

▪ Lexington City Schools

▪ Thomasville City Schools

▪ Weldon City Schools

▪ Harnett County Schools

▪ Lee County Schools

▪ Lenoir County Schools

▪ Nash-Rocky Mount Schools

▪ Onslow County Schools

▪ Person County Schools

▪ Rockingham County Schools

▪ Clinton City Schools

▪ Surry County Schools

▪ Elkin City Schools

▪ Wilkes County Schools.