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STAFF REPORT

TO: Eric Hardy, Deputy Finance Director Date: Aug

FROM: Tony McDowell, Budget ManagerJ ohn Sanchez, Budget Analyst

SUBJ ECT: Teacher Pay inAsheville City School System

This memo is written in response to the request from a councilmember to rese

Asheville City School System (ACS) is funded; who is responsible for setting teaand does the City has any latitude to influence the funding of these salaries.

How are Asheville City Schools f unded?North Carolina General Statute (NCGS) 115C, Elementary and Secondarestablishes a system of NC tuition free public schools. Administrative units school system may be designated as either County or City, and there is nofunding sources between these two designations. NCGS 115C-408 directs that

provide from State revenue sources the instructional expenses for current opepublic school system. The statute further directs that the facilities requiremeneducation system will be met by county governments. To meet this need, NCGProperty taxes; Authorized Purposes; and Rate limitation for Counties, proviwith the power to levy property taxes for various services, including schools. Icounty governments responsibility to provide capital funding to local schcounties may supplement State funding for current operating expenses of the system (NCGS 115C-426(e)).

General Statutes, however, do not include schools as one of the purposes formay levy property taxes (NCGS 160A-209). Consequently, most of the budget decisions for local school districts in North Carolina are made at the state or with little direct municipalinvolvement.

The most recent audited financialstatements (J une 30, 2012),

report ACS funding by source, asdepicted in this graph. Thelargest source of revenue - 43%of total revenue, or $22.4 million came from the State, whileBuncombe County funded 20%,or 10.7 million. ACS is

$22.4$8.1

$2.2 $2.4

FY2012ACSFundingSource($52.6million)

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Who sets salaries at Asheville City Schools?

The North Carolina General Assembly is the body responsible for determincreases to teachers salaries in North Carolina. The State also sets the salaall positions in local school districts, including administrative (non-teaching) pospecific salary levels in school districts across the state vary based on each disto offer a local salary supplement. This local salary supplement is determined part of the budget process and is funded as part of the County budget aAttached to this memorandum is a copy of the FY 2014 budget request fBuncombe County Board of Commissioners, which must approve ACS annualproposed salary supplement is shown on page L-2 of the attached document.

Does the City have the latitude to p rovide additional educational fund ing?In general, a city does not have the authority to provide a direct supplement to statschool funding without the approval of a local act to levy taxes for city schools. however, be certain school functions for which cities are authorized to spend moarts programs and libraries.

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