1. Budget Basics Preparing for the 2011 NC General Assembly Session

2. Situation Analysis NC budget shortfall of approximately $3.7 billion for the 2011-12 fiscal year. Cause: end of federal stabilization funds; end of some state taxes; end of nonrecurring cuts. Economic recovery continues to be slow.

3. Situation Analysis Public school budgets have been cut for three consecutive years. K-12 public education is the largest share of the state’s budget, so it’s tough to reach reduction targets without cutting public schools.

4. Situation Analysis

5. Trend over Time

6. How NC Ranks North Carolina ranks 45th in the nation in per-pupil spending.

7. Common Questions Why are schools always on the chopping block? NC’s Public School Fund is the largest chunk of the state budget’s General Fund.

8. Common Questions What about the lottery funds – won’t they help? Lottery funds do help – but they make up only about 3.9 percent of the budget. And, they’re designated for specific purposes – K-3 teachers, More at Four, school construction and scholarships.

9. Common Questions Can’t we just cut administration and leave teachers alone? Eliminating all administration (NCDPI, central office staff, principals/assistant principals) would total $478 million – less than half of the possible $1 billion in targeted cuts.

10. Common Questions Why not cut out testing? Wouldn’t that save a lot of money? Cutting out all testing would save about $11 million - far short of our needed cuts. Also, remember, NC is required to do some testing under federal and state laws.

11. Common Questions Won’t the federal Race to the Top funds help solve our budget problem? Race to the Top is providing nearly $400 million over four years to North Carolina - but the funds are targeted for specific purposes and not for general use. Funds are a one-time allocation.

12. What about KCS? Total KCS Budget = $47.5 million

13. What about KCS?

14. KCS ARRA Funding (Stimulus) KCS will lose nearly $2.5 million in ARRA funding for 2011-2012. That equals 53.78 positions. We will be able to absorb some of those positions by using other funding. However, it is an extremely significant loss.

15. How MIGHT state cuts affect KCS? 5% cut: 5% Reduction 2011-2012 Estimated Allotments Reduction+/- 001 TEACHERS250 positions15 positions235 002 CENTRAL OFFICE $ 574,056 $ 28,703 $ 545,353 003 NON-INSTRUCTIONAL SUPPORT $ 1,417,211 $ 141,721 $ 1,275,490 005 SCHOOL BUILDING ADMIN162 months9 months $ 153 007 INSTRUCTIONAL SUPPORT27 positions3 positions $ 24 012 DRIVER TRAINING $ 96,522 $ - $ 96,522 013 VOC-MONTHS OF EMPLOYMENT245 months11 months $ 234 014 VOC-SUPPORT $ 67,481 $ 3,374 $ 64,107 015 SCHOOL TECHNOLOGY $ 34,783 $ - 022 MENTORS $ 53,233 $ - 024 Disadvantaged Student Supplemental Funding $ 284,598 $ - $ 284,598 027 TEACHER ASSISTANTS $ 2,069,125 $ 783,982 $ 1,285,143 028 STAFF DEVELOPMENT $ 52,594 $ - 031 LOW WEALTH $ 249,814 $ - $ 249,814 032 EXCEPTIONAL CHILDREN $ 2,635,660 $ 89,612 $ 2,546,048 034 AIG $ 250,518 $ 12,526 $ 237,992 054 ESL $ 599,463 $ 59,946 $ 539,517 056 TRANSPORTATION $ 657,234 $ - $ 657,234 061 INSTRUCTIONAL SUPPLIES $ 304,242 $ 30,424 $ 273,818 069 AT-RISK $ 883,274 $ 88,327 $ 794,947 TEXTBOOKS $ 300,000 $ 30,000 $ 270,000 TOTAL $ 10,530,492 $ 2,541,430

16. How MIGHT state cuts affect KCS? 10% cut: 10% Reduction 2011-2012 Estimated Allotments Reduction+/- 001 TEACHERS250 positions19 positions231 002 CENTRAL OFFICE $ 574,056 $ 45,924 $ 528,132 003 NON-INSTRUCTIONAL SUPPORT $ 1,417,211 $ 141,721 $ 1,275,490 005 SCHOOL BUILDING ADMIN162 months14 months $ 148 007 INSTRUCTIONAL SUPPORT27 positions3 positions $ 24 012 DRIVER TRAINING $ 96,522 $ - $ 96,522 013 VOC-MONTHS OF EMPLOYMENT245 months16 months $ 229 014 VOC-SUPPORT $ 67,481 $ 3,374 $ 64,107 015 SCHOOL TECHNOLOGY $ 34,783 $ - 022 MENTORS $ 53,233 $ - 024 DSSF $ 284,598 $ - $ 284,598 027 TEACHER ASSISTANTS $ 2,069,125 $ 1,488,774 $ 580,351 028 STAFF DEVELOPMENT $ 52,594 $ - 031 LOW WEALTH $ 249,814 $ - $ 249,814 032 EXCEPTIONAL CHILDREN $ 2,635,660 $ 89,612 $ 2,546,048 034 AIG $ 250,518 $ 25,052 $ 225,466 054 ESL $ 599,463 $ 59,946 $ 539,517 056 TRANSPORTATION $ 657,234 $ 52,579 $ 604,655 061 INSTRUCTIONAL SUPPLIES $ 304,242 $ 30,424 $ 273,818 069 AT-RISK $ 883,274 $ 88,327 $ 794,947 TEXTBOOKS $ 300,000 $ 75,000 $ 225,000 TOTAL $ 10,530,492 $ 3,654,595

17. IMPORTANT INFORMATION Legislative session is just beginning & budget outlook could change many times. Possibilities being considered: –No new taxes, and sunsetting taxes allowed to expire –Across the board pay cuts for state employees –Removing the 12% bonus for NBPTS teachers –Removing the 10% bonus for master’s degrees –Requiring state employees to pay part of their health insurance premiums

18. Other important Info We have met personally with our Cabarrus/Rowan legislative delegation. –They expect the legislature to provide maximum flexibility so school districts can maximize their limited funds. Cabarrus County has indicated we will receive at least the same funding as this year—NO cuts. That’s excellent news. State tax collections are meeting targets so far, and December sales revenues were strong—more good news.

19. Other important Info The Governor is scheduled to give her budget to the Legislature in mid-February. We also expect planning allotments from DPI in mid-February. These will provide our first clues as to next year’s budget picture. We have a Budget Task Force made up of representatives from all stakeholder groups. They are helping to inform our budget decisions.

20. Our Promises: We will do everything we can to influence legislators to FUND SCHOOLS FIRST. We will do all we can to protect jobs and the education of our children. We will be honest with you and keep you informed every step of the way. We will give you as many resources as possible to communicate effectively with legislators.

21. Next Steps Determine how state and local reductions will affect your schools. Communicate the impact. Stay informed through KCS, the news media, DPI, and your associations. Reach out to legislators and key stakeholders.

22. Next Steps Become familiar with state-level strategic cut options that have been identified to limit classroom impact, and maintain necessary infrastructure. www.kannapolis.k12.nc.us

23. Questions If we cut personnel, who will make that decision and how will they decide? When will we know something about our jobs? (Timeline) Will my pay be cut? Will my hours be reduced? Where are we looking to make cuts besides personnel?

24. Questions If our budget is so bad, how can we afford the “extras” that we’ve been doing: Biotech Academy, 411Fit, etc.? Will class sizes increase? Will we change the structure of how teacher assistants are paid?