Federal impact aid revenue down about $300,000

For the second year in a row, Craven County Schools is looking at a budget shortfall in the area of federal impact aid revenue, according to a budget update the Board of Education received Tuesday morning.

At the board’s February work session, Finance Officer Denise Altman said even if the school system receives 100 percent of the estimated impact aid dollars for its final two payments this year, the school system will miss its estimated budget of $1.6 million by nearly $300,000. Still, Altman believes that the overall budget is in good enough shape to withstand the estimated loss in revenue without major consequences.

Impact aid revenue consists of federal dollars used to assist military-impacted school districts that have lost property tax revenue because of military and other federal employees being exempt from paying such taxes.

Board member Carr Ipock said, historically, the district used to receive nearly $3.5 million in impact aid revenue, so the decrease has had a large effect on the school system’s budget.

Since 2010-11, the district has seen about a $600,000 decline in federal impact funding, according to a 2016 district budget presentation.

“It’s been a topic of conversation for years as the military population seems to be decreasing and our student count is decreasing over the last several years,” Altman said.

Craven County Schools Superintendent Meghan Doyle said when making her 2017-18 fiscal year budget recommendation to the board this year, she will use a five-year trend to estimate the impact aid revenue budget.

Doyle also said the school district is expecting to add a couple hundred more students, as Cherry Point is at a low point in a downturn cycle.

The federal impact funding is based on the percentage of the school district’s students who are federally connected. The district finds this number by sending home “federal cards” to families in September.

“So now you guys understand why we have federal cards, and we beg you to bring them back,” board member Kim Smith said.

W.J. Gurganus Elementary School Principal Debra Hurst said schools will use every avenue to collect accurate counts of federally connected students to ensure the school system receives every dollar it’s entitled to.

“Being a large military community, we get you in the car lines,” she said. “We get you at events. We even usually focus one of our events around federal cards.”

The district is also only at about 36 percent of its budgeted amount of interest income for the year. The school system estimated it would receive $30,000, and as of Jan. 31 had only received just under $11,000.

“It doesn’t have near the impact that impact aid revenue has on our budget, but it’s still not where it should be,” Altman said. “The only positive is that rates are slowly increasing this year, so maybe we will see a better collection rate by next budget season.”

Even with the expected shortfall in impact aid revenue, Altman said the district is still in “good shape” when it comes to spending.

The school system received nearly $11,000 more than what was estimated for sales tax revenue this fiscal year, and Altman said the district has spent only about 50 percent of its local current expense fund over seven months into the fiscal year.

“We do have some savings in a couple of the budgets that will help offset that decrease in that revenue source, so as long as we hold basically where we are, I think we are fine this year,” she said. “I don’t think we will have any need to use any money out of the fund balance to balance for the year, but we will be looking at it month-to-month to see where we are.”

Last fiscal year, the school system reported a $3.5 million shortfall that had to be made up through various cuts and increases in county funding.

Hannah DelaCourt is a reporter for the Wilmington StarNews.