Is Hyde County’s fight over school funds over?
By Kip Tabb | Outer Banks Voice on August 2, 2022
Commissioners restore $400K in cuts, another $75K may be sought
On July 28, after a month-long dispute over school funding, the Hyde County Board of Commissioners voted 3-2 to raise the county’s share of the schools’ annual budget to the $1.712 million figure the schools had requested.
That was up from the $1.3 million the commissioners previously approved on June 27, a $400,000 deficit that would have had cascading financial impacts on the schools. It also triggered a school committee request for arbitration, although that avenue failed to resolve the impasse.
With the commissioners’ July 28 decision to restore that funding, the question now is whether the school will receive another $75,000 in county funds that Hyde Board of Education Attorney Richard Schwartz says is due them.
At the heart of that battle over the Hyde County school budget is a county trying to cope with a shrinking tax base compounded by the recovery costs from Hurricane Dorian.
“Hyde County is struggling with revenue this upcoming year due to being at the bottom of our reevaluation cycle compounded by a severe loss of housing values since the destruction of Hurricane Dorian,” Hyde County Manager Kris Noble wrote in an email to the Voice.
The county also needed to replenish its reserve fund that has been depleted by Hurricane Dorian and the COVID pandemic. The fund had fallen below state guidelines, and the commissioners voted to raise the county property tax and reduce funding for every department except the sheriff’s office.
The potential loss of $400,000 from the county’s contribution to the school budget would have also jeopardized other funding dollars, according to Hyde County Schools Superintendent Dr. Melanie Shaver.
Shaver, who just began her tenure on July 1, said that in a smaller school district like Hyde County, one other affected source of school dollars would have been annual small school funding from the state.
“When you look at small school funding, there’s a local [removal] rule,” she said. “If you’re cut below what you had been funded at 95% per student, you could stand to lose your Small School Funding as well. We get about $1.8 million from small school funding. That’s where a lot of our teachers and our staff come from.”
Hyde County as well as North Carolina schools in general, had already lost the Hold Harmless funds the state had been providing to help districts through COVID. The Hold Harmless funds maintained the state’s contribution to school budgets at pre-COVID levels. Because state school funding is based on student enrollment, Hyde County, which saw a decrease in enrollment, stood to lose more funding.
“If we lost the Small School System Supplemental Funding in addition to the cuts from State [Hold Harmless] funds, in addition to the $400,000 cut from local funds, Hyde County Schools would be effectively unable to operate,” Board of Education Chair Angela Todd wrote in an email.
Board of education attorney Schwartz told the Voice that school funding in North Carolina is incredibly complex, with multiple sources providing revenue. He added that it is likely the county commissioners did not know how dramatically the cuts would affect the district.
“I don’t think they realized the impact,” he said.
There may still be, however, one piece of unfinished business.
Because the attempt to find a funding solution through arbitration did not succeed, Schwartz said that under a state formula, the Hyde County Schools are actually due $1.787 million in county funding under that calculation — $75,000 more than the original budget request of $1.712 million.
The board of education is meeting on Aug. 2 and Todd expects the new budget figure to be part of the discussion.
“Whether or not the BOE will accept the $1.712 [million] or move forward in demanding the full statutory funding formula, I don’t have an answer for that yet. The regularly scheduled BOE meeting is [today] and I expect that we will be discussing the matter with the BOE attorney before determining our next step,” she wrote.