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Durham Public Schools faces a $7 million shortfall this year

Durham Public Schools’ Superintendent Anthony Lewis (left) listens as CFO Jeremy Teetor (right) describes the district’s budget deficit.
Liz Schlemmer
/
WUNC
Durham Public Schools’ Superintendent Anthony Lewis (left) listens as CFO Jeremy Teetor (right) describes the district’s budget deficit.

Even after some belt-tightening measures were put in place earlier this school year, Durham Public Schools’ Superintendent Anthony Lewis says the district is expecting a nearly $7 million budget shortfall that will need to be addressed this year.

“Our most pressing challenge is ensuring the financial stability of this school system,” Lewis said at a press conference Friday.

Lewis said he’s hopeful any necessary budget cuts will not directly impact services for students.

“Our goal is not to touch our students or to touch our staff, but more of thinking about… what can we do a better job of, in terms of allocating money?” Lewis said. “We don't anticipate there will be any major cuts or hard asks for the [school] board. It'll just be an opportunity for us to kind of tighten the belt.”

The shortfall amounts to about 1% of the district’s $691 million annual budget, after the Durham County Board of Commissioners approved a “historic” locally funded increase to the school district’s budget last summer. That boost of funding largely fueled pay increases for classified staff — that were properly budgeted for — said Jeremy Teetor, the district’s new chief finance officer.

“That at this point in time is not a driving factor,” Teetor said. “We just really had a series of items that were under-budgeted, or not budgeted, that we have to account for.”

Teetor said he spent several months combing through the district’s budget after he was hired in November. His finance team initially uncovered a larger $34.5 million shortfall, but the district has been able to significantly reduce it.

At the beginning of this school year, Durham Public Schools withheld 15% of every school and department’s budget to address any shortfalls that might arise. That preventive action taken by former interim Superintendent Catty Moore saved the district $26.4 million. Teetor’s team identified additional savings to bring the deficit down to just under $7 million.

What’s causing the shortfall?

According to Durham Public Schools’ communications department, the finance team’s budget findings included the following items that contributed to the deficit:

  • $18.6 million that was unbudgeted for 315 positions, 247 of which are vacant.
  • $9.7 million was under-budgeted for charter school payments that pass through Durham Public Schools to local charter schools for their annual per-student funding. The unbudgeted amount represents funding for nearly 2,000 charter school students in Durham County.
  • $3 million shortfall for child nutrition, due to a new food sourcing and preparation process.
  • $1.3 million shortfall due to an incorrect estimation of the number of classroom teachers who would require master’s pay when the district extended pay supplements to teachers with master’s degrees.
  • $1 million shortfall due to unanticipated rising costs of utilities and waste management.
  • About $875,000 was unbudgeted for arts supplements, bus driver attendance bonuses, insurance costs, and mileage reimbursements for teachers of homebound students.

The district’s finance and human resources departments are taking steps to make better estimations of these expenses in the future.

Budget issues are affecting public schools across NC

Wake County Schools also has a major budget shortfall this year that has ballooned from early estimates similar to Durham Public Schools’ deficit, up to possibly $70 million because of requirements in new legislation.

Teetor said budget deficits used to be nearly “unheard of” in public schools a decade ago but now plague many school districts.

“This was just not a headline in the past, right, that school systems were wrestling with budget deficits, per se, but it certainly has become more common, definitely in the past two or three years,” Teetor said.

School districts across the state have been grappling with the loss of federal COVID-19 relief funds to schools nationwide, plus years of falling student enrollment at many traditional public schools in North Carolina.

Teetor is the finance expert many school districts call when they're in a pinch. He said a lack of experienced finance directors serving public schools is also hurting school districts' finances. Durham Public Schools has had an interim finance director since their last permanent one resigned a year ago after making a major payment error that led to prolonged staff protests.

Liz Schlemmer is WUNC's Education Reporter, covering preschool through higher education. Email: lschlemmer@wunc.org
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