Education Special Provisions in the 2003 Budget
Reference: House Bill 397 for complete section
August 29, 2003

Special Provisions in Part VII. Public Schools.

1. Teacher Salary Schedules (Section 7.1) - same schedule as last year.
Teachers move up 1 step for an average increase of 1.81%.

2. School-Based Administrator Salary Schedule (Section 7.2) - also same schedule as last year. Principals and assistant principals move up 1 step for an average increase of 1.86%. Section 7.2(i) deals w assistant principal interns and allows phase-in of new limits on stipend/salary for interns. Beginning in 04-05, the stipend cannot exceed the difference between the beginning salary of an assistant principal and all fellowship funds received by the intern as a full-time student.

3. Central Office Salaries (Section 7.3) - same schedule as last year.
Employees in this category employed on Oct 1, 2003, will receive a one-time, lump-sum bonus of $550.

4. Noncertified Personnel (Section 7.4) - $550 bonus for employees
employed as of October 1, 2003. For part-time employees, the pay increase shall be pro rata based on the number of hours worked.

5. Reserve for Experience Step Increase for Teachers and Principals in
Public Schools (Section 7.5) - a standard provision authorizing increases for teachers and principals in schools operated by DHHS, DOC, and DJJ& Delinquency Prevention. Teachers with 29+ years of experience will receive a one-time bonus equivalent to the average increase of steps 26-29. Principals and assistant principals will receive a one-time bonus equivalent to 2%. Part-time personnel will receive a pro rata bonus.

6. Supplemental Funding in Low-Wealth Counties (Section 7.6) - standard
provision with several changes: changes definition of "Anticipated total county revenue availability" in Section 7.6(c)(2); adds minimum effort requirement and nonsupplant requirement.

7. Small School System Supplemental Funding (Section 7.7) - standard
provision with several new features: changes base allotment to $614,148; adds nonsupplant requirement; spells out phase-out provisions; adds section encouraging local boards to use at least 20% of funds for students performing at Level I or II and requires SBE to report to Ed Oversight on how funds were used.

8. Appropriations for Continually Low-Performing Schools (Section 7.8)
- basically the same as last year.

9. Immediate Assistance to the Highest Priority Elementary Schools
(Section 7.9) - same as last year.

10. Evaluation of Initiatives to Assist High-Priority Schools (Section
7.10) - same as last year.

11. At-Risk Student Services/Alternative Schools (Section 7.11) - same
as last year.

12. Additional Teacher Positions for Second Grade (Section 7.12)
-allotment ratio for grade 2 will be 1:18. For 03-04, local school administrative units shall use these additional teacher positions to reduce class size in second grade.

13. Children with Disabilities (Section 7.13) - same as last year except
adjusts for money and for the number of children ($2,670.28 per child for a maximum of 164,167 children in 03-04).

14. Funds for Academically Gifted Children (Section 7.14) - same as last
year except adjusts for money and for the number of children ($884.55 per child for maximum 53,712 children in 03-04; 4% cap per LEA remains).

15. Students with Limited English Proficiency (Section 7.15) - standard
provision requiring SBE to develop guidelines for identifying and providing services to LEP students, and assessment at least once every 3 years. A new section requires SBE to review the allotment formula and report recommendations to Ed Oversight by Nov 15, 2003.

16. Funds to Implement the ABCs of Public Education (Section 7.16) -
provides for ABCs bonus as in previous years. States intent in future years to address effort in schools to close the achievement gap by providing an incentive for schools that make AYP as required by NCLB, and terminates ABC pilot program. Requires SBE to report findings and recommendations based on results of pilot program to Ed Oversight by Oct 15, 2003.

17. LEA Assistance Program (Section 7.17) - a new provision this year.
Directs SBE to provide assistance to low-performing school systems and to assist schools in meeting AYP. Requires a report to Ed Oversight, OSBM, and Fiscal Research by May 15, 2004 and specifies elements of the report.

18. Expenditure of Funds to Improve Student Accountability (Section
7.18) - basically same as last year.

19. Funds for Teacher Recruitment Initiatives (Section 7.19) - same as
last year.

20. Recruitment and Retention Initiative to Address Teacher Shortage
(Section 7.20) - subsection (a) same as last year. Adds new subsection regarding reciprocity for highly qualified teachers from other states, new subsection requiring SBE to review Praxis requirement and report to Ed Oversight by April 15, 2003, and new subsection amending Lateral Entry statutes and requiring report to Ed Oversight by July 1, 2004. Provisions of this section expire June 30, 2004.

21. Funds for the Testing and Implementation of the New Students
Information System (Section 7.21) - same as last year, except for new requirement that testing include an emphasis on the security of the system.

22. Litigation Reserve Funds (Section 7.22) - same as last year.

23. Local Education Agency Flexibility (Section 7.23) - same as last
year. SBE must report to OSBM the Fiscal Research on all reductions made by LEAs. SBE shall determine changes to allotment categories to make permanent reductions for 2005-2006 and subsequent years. Proposed changes are subject to the approval of the General Assembly.

24. Base Budget Reduction to Department of Public Instruction (Section
7.24) - same as last year.

25. Replacement School Buses Funds/Safety Rules for School Activity
Buses (Section 7.25) - same as last year, except adds provision for 3rd year of contracts. Adds subsection requiring SBE to study the adequacy of the safety rules and policies adopted by local boards of education regarding the use of activity buses.

26. Expenditures for Driving Eligibility Certificates (Section 7.26) -
same as last year.

27. Discrepancies Between Anticipated and Actual ADM (Section 7.27) -
allows higher of the first or second month ADM in determining if allotment must be reduced because of inaccurate estimate.

28. Charter School Advisory Committee/Charter School Evaluation (Section
7.28) - same as last year.

29. Study of Issues Related to Rapid Growth in Student Population
(Section 7.29) - Ed Oversight to study and report findings and recommendations to the 2004 General Assembly.

30. Mentor Teacher Funds May be Used for Full-Time Mentors (Section
7.30) - new this year. Directs SBE to grant flexibility in use of mentor funds, provided the local board submits a detailed plan on use of the funds and SBE approves the plan. Directs SBE, after consultation w the Professional Teaching Standards Commission, to adopt standards for mentor training. Allows Winston-Salem/Forsyth, Charlotte, and Wake Co to continue existing pilot programs, but requires them to submit plans to SBE also. Requires each LEA to report on impact of its mentor program on teacher retention, and requires SBE to analyze LEA reports and report findings to Ed Oversight. Also requires SBE to evaluate the effectiveness of a representative sample of mentor programs and report to Ed Oversight and Fiscal Research by December 15, 2004.

31. ExplorNet Audit (Section 7.31) - stipulates that no State funds
appropriated can be disbursed until ExplorNet is certified to have an audit report free of exceptions for 01-02.

32. School Nurse Services (Section 7.32) - directs SBE to study and make
recommendations on the ratio of nurses to student populations by Feb. 15, 2004.

33. Transfer of Public School Capital Fund (Section 7.33) - from OSBM to
DPI. Recommended by the Governor.

34. Funds for Regional Educational Service Alliances (Section 7.34) -
stipulates that LEAs can use up to 10% of staff development funds to contract w RESAs.

35. Pilot Programs on Financial Literacy (Section 7.35) - directs SBE
to establish pilot programs in 5 LEAs and report to Ed Oversight by Jan 1, 2004, on implementation.

36. Credit for High School Students Taking Community College Courses
(Section 7.36) - directs SBE to study the issue of weighted credits for high school students who take university and community college courses and report to Ed Oversight by Dec. 15, 2003.

37. Vocational Education Funding (Section 7.37) - states intent of
General Assembly to eliminate funding for vocational education in the 7th grade.

38. Review of Teacher Certification Process (Section 7.39) - amends
provision passed last year to remove references to portfolios and to direct SBE to study initial certification, continuing certification and recertification. Findings and recommendations must be reported to Ed Oversight by March 15, 2004.

39. Enhancement of Character and Civic Education Programs (Section 7.40)
- encourages all high schools and middle schools to have elected student council programs, directs schools to encourage discussions of current events (in two classes at least every 4 weeks in high schools and middle schools), adds antiviolence, conflict resolution and community service to list of traits schools are encouraged to teach, and directs SBE to consider incorporating a character and civic education component into the ABCs program.

40. Visiting International Faculty (Section 7.41) - directs SBE to
convert teacher positions for VIF for 03-04 on the basis of allotted average teacher salary and benefits.

Other Special Provisions affecting Public Schools.

41. Competitively Bid Beverages (Section 6.15(a)) - requires LEAs,
community colleges, and universities to competitively bid contracts that involve sale of juice or bottled water. Applies to contracts bid on or after effective date of statute (July 1, 2003).

42. Scholarships for Prospective Teachers (Section 8.8) - same as last
year. Provides $1 million for a nonrecurring grant to the Community College System to match a grant from Glaxo Smith Kline for prospective teachers enrolled in baccalaureate completion programs.

43. Collaboration Among DHHS, DPI, and LEAs to Ensure Medicaid-Related
Services for Eligible Public School Students with Disabilities (Section
10.29A) - directs DHHS to work w DPI & LEAs to develop efficient, effective, and appropriate administrative procedures and guidelines to provide maximum funding for Medicaid-related services. Procedures and guidelines shall be streamlined to ensure that LEAs receive Medicaid reimbursement in a timely manner.

44. More at Four Program (Section 10.40) - basically same as last year's
provision.

45. Residential Schools Reporting (Section 10.41) - requires report on
enrollment numbers at the schools, budgets, and academic status of the schools as defined under the ABCs program.

46. Reports on Certain Programs (Section 15.3) - Communities in Schools
to report by April 1 each year on the operation and effectiveness of its program.

47. Smart Start Audits (Section 19.1) - annual audit required for
partnerships rated "needs improvement"; otherwise, biennial audits.

48. Driver Education Privatization (Section 29.7) - The SBE shall study
statewide privatization of State-funded driver education programs and report by Nov 30, 2003, on proposals for statewide privatization and cost reduction.

Special Provisions affecting Retirement and Benefits

49. Compensation Bonus for Fiscal Year 2003-2004 (Section 30.12A) -
one-time, lump-sum bonus of $550 to personnel employed in State-funded positions on October 1, 2003, not subject to other salary increases provided in the budget. Pro rata share for permanent part-time employees.

50. Special Annual Leave Bonus (Section 30.12B) - 10 days additional
annual leave to be credited on July 1 to permanent full-time employees eligible to earn annual leave and not subject to automatic or step increases. Part-time permanent employees will receive a pro rata amount. Tracked and accounted for separately, as stipulated last year.

51. Employees May Voluntarily Share Leave with a Coworker's Immediate
Family Member (Section 30.14A) - Directs State Personnel Commission, SBE, and State Board of Community Colleges each to adopt rules and policies to allow employees to share leave with a coworker's immediate family member.

52. Salary-Related Contributions (Section 30.16) - establishes employer
contribution rate of 3.42% for retirement and related benefits for Teachers & State Employees (includes 3.20% for hospital & medical benefits). Also establishes maximum annual employer contribution to the Comprehensive Major Medical Plan for each covered employee in 03-04 at $2,518
(Medicare-eligible) and $3,307 (non-Medicare eligible).

53. Retirement COLAs (Section 30.17) - 1.28%

54. State Employee Health Benefit Plan/Benefit Changes (Section 30.19C)
- provides that in emergency situation out-of-state, the plan member is not responsible for charges in excess of preferred provider rates.

55. Study Commission on State Disability Income Plan, the Death Benefit
Plan, etc (Section 30.20) - establishes Commission to study and submit a report including recommended changes not later than Jan 1, 2005. Also amends definition of "disabled" to specify that the individual must be unable to perform the duties of his/her job or any other available jobs with the State.

Information Provided by:

Linda S. Suggs, Legislative Director
State Board of Education
North Carolina Dept. of Public Instruction
301 N Wilmington Street
6302 Mail Service Center
Raleigh NC 27699-6302