NEW HANOVER COUNTY — The Brunswick, Pender and New Hanover counties school districts were all stunned to learn it could lose more than $1 million each in operating revenue over the weekend, adding to one of the district’s larger budget woes in the new fiscal year.
READ MORE: NHC Board of Education hears options for pre-K funding cut, including possible school closure
New Hanover County Schools is facing a several-million dollar loss in funding from local budget cuts, the removal from a state supplemental funding program, and a federal funding freeze.
NHC Superintendent Christopher Barnes addressed the loss, which he totaled at $5.3 million, in an email to board members Tuesday morning. This includes a little less than $1 million in pre-K funding, $2.34 million in supplemental funding at the state level, and $1.6 million in federal Title funding.
Last week, the Trump administration paused educational funding across the county for federal review, including $169 million in North Carolina:
- $67.9 million – Title II-A for teacher professional development
- $38.9 million – Title IV-B for before and after-school programs
- $37.2 million – Title IV-A for academic enrichment
- $19.3 million – Title III-A for English-learner services
- $5.4 million – Title I-C for migrant education
The U.S. Department of Education informed North Carolina Department of Public Instruction of the pause right before the funding was scheduled for delivery in the new fiscal year, which began on July 1.
Locally, the pause affects just more than $1 million in Pender, $1.2 million in Brunswick and $1.6 million in New Hanover.
All three districts told Port City Daily both personnel and programming would be affected, though Pender County provided the most details. Chief Finance Officer Lisa Nowlin confirmed its frozen funds affect 38 staff members, $100,000 in professional development and $250,000 in afterschool programming, specifically the academic tutoring and enrichment program Twenty First Century.
NHCS board member Pat Bradford shared Barnes’ email with PCD on Tuesday afternoon. It shows that its frozen funds are used for the beginning teacher support program, emerging leaders, licensing software and stipends for mentor teachers. It also funds NHCS’ migrant education program, curriculum and multi-language learners.
NHCS board member Tim Merrick said just because the Trump administration was withholding funding didn’t mean school districts could also ditch its responsibility to uphold federal requirements, like providing professional development opportunities. Repealing Title II, Title III and Title IV would require Congressional approval, though the Trump administration has shown disinterest in the procedural requirement in its other actions thus far.
“[The Title funding has] become unfunded mandates,” Merrick said.
Bradford said the federal government’s impoundment, which is when the executive branch holds funding authorized by Congress, is “stunning,” even though her fundamental belief is the federal government should not be involved in education.
“I am trusting that the federal and state decision-makers have a plan,” she wrote. “I expect we will see it play out in the courts. The question for us now is: How do [we] weather it?”
Pender County reported it has enough carryover funding from the last fiscal year to tide the district over until a decision is made on its federal funding. Brunswick and New Hanover counties said they were exploring ways to address the freeze.
According to Merrick, the federal funding freeze has put other funding losses the NHCS district has figured out how to absorb recently “back on the table.” This includes the $1-million in pre-K funding and $2.34-million in Supplemental Funds for Teacher Compensation from the state, both of which the district was figuring out ways to cover.
On May 1, New Hanover County Schools received a letter from the North Carolina Department of Public Instruction saying it no longer qualifies for this program based on its recent tax revaluation, which brought with it an average property value increase of 67%.
“New Hanover County no longer is eligible for this support because our tax value is so high,” Barnes wrote in his Tuesday email.
Merrick described the loss as a “slap in the face.”
“It’s the state saying as a county, you’re wealthy enough to give them [NHCS] money, and yet, at the same time, the county is withdrawing and giving us less money this year than last year,” Merrick said. Though the county is providing an additional $8 million this year, Merrick said some of it was cost-of-living increases just to keep up with inflation and ongoing safety upgrades.
Barnes’ letter also notes a loss of $400,000 in at-risk student funding due to a reduction in poverty estimates for 5- to 17 year-olds.
Both Merrick and Bradford, along with board member Judy Justice, described the funding loss total as a triple whammy.
“The three last-minute cuts together moved us into an unintended, but perilous consequence of harming children,” Bradford said.
Barnes agreed in his Tuesday email, saying a single one of these budget cuts could be absorbed over the course of the year, but it will be harder to do all at once.
He also pointed out the state’s contribution is still a moving target, as the North Carolina General Assembly has yet to pass its full budget. NHCS planned for a 3% raise to teachers, but if the state passes a higher percentage, Barnes wrote NHCS “will have to reduce staff to make up the difference.”
Identifying which positions should go would be very difficult, as the superintendent has said multiple times the district is operating at “subsistence level.”
Ultimately, Barnes suggested the board adopt a “wait and see option” at least for the beginning of the year, while the state and federal landscape potentially becomes clearer. Justice agreed.
“There’s so much uncertainty about what’s going on, it’s hard to make plans,” Justice said.
Barnes wrote several options could be explored, including:
- Using all carry-over money from the Title budgets
- Access 100% of lapsed salaries to cover the difference — “but this presents its own problems”
- Appropriate fund balance – “what little we have”
- Go back to the endowment for some portion of this funding
- Go back to the county commissioners for funding — “however if they are laying off staff, asking to maintain ours will be a challenge”
- Implement a hiring freeze beginning with central office and moving to schools as necessary
- Facilitate conversations about redistricting or consolidating
- Restrict spending and travel
- Reduce local supplements until the budget balances or reduce stipends for additional duties
The three school board members that responded to Port City Daily didn’t endorse a specific approach, though Bradford did call for “emergency stop-gap” funding from the county and state until NHCS could find a permanent solution.
Though with varying degrees of intensity, each member did call out the commissioners for their role in the budget shortfall.
“While I do understand the commissioners’ reasons for making cuts, and I greatly appreciate the funding they have provided our schools, these last-minute cuts have put the school district in a crippling shortfall right as school starts,” Bradford said.
Despite the additional $8 million in additional operating funding, NHCS lost six pre-K classrooms, added during the Covid-19 pandemic using expiring relief dollars. On top of this, school nurses and social workers were also cut, but no board member said they’ve been provided a specific reduction amount. Merrick estimated a loss of 14 nurses, and was more adamant the commissioners take responsibility for their budget decision.
“They have said that their tax rate was not arbitrary … if the county commissioners’ choice for a tax rate was not arbitrary, that means they believe that taking 14 nurses, 108 preschool positions, that they believe those cuts specifically are warranted,” Merrick said.
Justice and Merrick said they expected the decision would come up at Tuesday night’ meeting, but said they were wary of making a decision so soon. The board will meet at 5 p.m. on Tuesday, July 8.
Tips or comments? Email info@localdailymedia.com.
Want to read more from PCD? Subscribe now and then sign up for our morning newsletter, Wilmington Wire, and get the headlines delivered to your inbox every morning.
