A small discrepancy in the Wayne County combined tax rate could cause the Wayne County public school system to lose nearly $2 million in state funding, district officials say.
As a low-wealth county, Wayne County is eligible to receive low-wealth education funding from the state, which can be used with wide flexibility to fill the needs of the school district. The district received nearly $7 million in low-wealth funding in the 2015-2016 school year, and the amount of funding a county is given depends substantially on how much that county is doing to raise its own money.
If a county does not meet state averages for combined tax rate, they can lose out on getting the full amount of potential funding.
"The state has a very complicated formula that they use, but it boils down to that there's got to be a participation or activity from the county," said WCPS Finance Director Michael Hayes.
The average combined tax rate for North Carolina is 0.669 per $100, while Wayne County sits at 0.668, Hayes said. That disparity, while seemingly minuscule, means that the county does not technically meet the state's threshold for full low-wealth funding. Instead, WCPS could receive 72 percent of the available funding, resulting in a loss of around $1.9 million.
The school system uses some of that money to fund teaching positions, Hayes said. It also provides for some clerical and general administrative staff positions, as well as many other district needs.
Hayes said that losing that funding would cause the district to have to seek a new source money for between 60 and 70 teaching positions.
"I think you can see how detrimental that would be," he said.
The district is working with Wayne County commissioners to find ways to correct the problem, but nothing is set in stone yet. Hayes said the district would ideally like to work out an arrangement with the state to be shielded from the tax rate requirement, preserving the low-wealth funding.
Hayes said that there is no exact time frame for when the tax rate changes have to be made, but the money will be lost if the problem is not addressed by the start of the next school year.