The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Wednesday, August 23, 1995             TAG: 9508230497
SECTION: LOCAL                    PAGE: B3   EDITION: NORTH CAROLINA 
SOURCE: BETTY MITCHELL GRAY, STAFF WRITER 
                                             LENGTH: Long  :  147 lines

TWO SMALLEST SCHOOL SYSTEMS BENEFIT FROM STATE'S POT OF GOLD

When students report to school in Tyrrell County today, they'll be able to attend classes in advanced placement calculus and Spanish, work in one of two computer labs that offer up-to-the-minute technology, and have their research questions answered by specialists.

In Hyde County, returning elementary school students will be offered smaller classes, and students at the high school will participate in the second year of a new scheduling system that lets them take new courses each semester, much as they would in a college.

These improvements in the state's two smallest school systems have been made in recent years thanks to two 5-year-old pots of money that supplement state appropriations for small and poor school systems. The money was offered through the Department of Public Instruction to help schools that have trouble raising enough property tax money to hire an adequate number of teachers or buy the latest equipment for their schools.

``Small school money is just very vital to our system,'' said Ronald Montgomery, superintendent of Hyde County schools. ``It would be devastating to even think of trying to run the system without it.''

Hyde County schools, with a budget of about $8 million in state and local funds, serves about 800 students in its school district. It receives about 10 percent of its funding from the supplement for small schools.

When state lawmakers completed their budget last month, they included a windfall for area schools: 16 school districts in northeastern North Carolina are slated to receive more than $12.5 million in supplemental funds for small and poor schools approved by the General Assembly.

The General Assembly's expansion and capital budget, which was approved in late July, included $6.2 million in new money for the state's poor school system, bringing that allocation to $41,483,809 a year. It added $538,392 to the supplemental fund for small schools, bringing that appropriation to $15,117,295 a year.

Of this, $5,885,103 will be allocated to the area's 14 low-wealth school districts and $6,664,160 for the 11 small school districts in the area.

Among the 17 northeastern counties, only Dare County is ineligible to receive funding under either program.

``Anybody who walked in our building four years ago and walked in our building today wouldn't recognize us,'' said Betsey Stallings, superintendent of Tyrrell County schools. ``I don't know what we'd do without this money. Each year we have added to our programs, and it definitely is making a difference.''

In Tyrrell County, the state's smallest county, a one-cent property tax increase generates about $14,000, making it difficult for the county government to pay for extra teachers or new equipment purchases, Stallings said.

Reports issued over the last three years by the American Civil Liberties Union and the North Carolina Public School Forum - a group of educators, politicians and business leaders - show that public schools are increasingly dependent on the wealth of local counties to supplement inadequate state funding.

Poor, rural counties often cannot match funding in larger, wealthier counties even when the local tax rates are well above average.

And a report by the Public School Forum released earlier this month showed the gap between local spending in the state's poor and wealthy school districts was widening.

Because of inequities and lawsuits threatened by the state's smaller and poorer schools, the General Assembly funded a package of special appropriations for those schools for the first time in 1991.

School systems qualify for low-wealth supplements if their tax base per student is below the statewide average, their per capita income is below par and their tax rate is equal to or above state average.

School systems generally qualify for small school supplements if total enrollment is 4,000 students or less, up from 3,000, or if the county has a per student tax base below the state average.

The small school formula was changed this year, partly in response to an increase in students in Currituck County which was faced with losing 17 employees - mostly classroom teachers - because of population growth.

``If we did not have the money, we would have 17 fewer people - most of whom were classroom teachers,'' said Ronnie Capps, Currituck County superintendent.

``And that would have created larger classrooms.''

Since 1991, more than $74 million has been appropriated by the state to about 72 poor school systems and more than $29 million to about 25 small school systems.

``The direct benefits to all these units of public education are extremely obvious even to someone outside the education system,'' said Senate leader Marc Basnight, the Manteo Democrat widely credited with creating the two supplemental funds. ``I can't describe to you in words what's it's meant to our children. They're better able to compete with students from larger and wealthier school districts.''

``If there's going to be any equity and fairness in our public school system we're going to have to bring up those who are unable to pay to a level with those who are able to pay,'' he said.

But even the supplemental funds fail to help all the school systems which should be eligible.

For example, Hyde County, one of the state's smallest and poorest counties, should qualify for the low-wealth-school supplement, lawmakers say. But high property values on Ocracoke Island skew computations of the county's wealth and make it ineligible for money under that supplement.

``There is no formula that we can develop to include Hyde County in that funding,'' Basnight said.

Some leaders in the state's poor school systems say that the supplemental funding given to them so far by the legislature doesn't go far enough to make up for the differences between poor and wealthy counties.

Five of the state's poorest school systems in 1994 filed a lawsuit against North Carolina based on such inequities in funding, despite increases in funding for low-wealth schools over the previous four years.

Also in previous years, some House leaders questioned the use of supplemental funds for counties, like Currituck County, that are in high-growth areas with high property values.

But Basnight said on Tuesday that the supplemental funds have proved their worth in the last five years and as long as the funds continue to emphasize improvements in the classroom, their future looks bright.

``This is one that stands out more than anything we - I and others in the General Assembly - have ever done,'' Basnight said. ``With each year, the advantages of retaining these appropriations will increase because the the successes attributable to the funds will protect their future.'' ILLUSTRATION: SMALL AND LOW WEALTH SCHOOL FUNDS

Chart

SOURCE: N.C. Department of Public Instruction, Division of School

Business Services, School Budgets Section

Amounts shown are the budgeted funds in each category for each

locality.

County Low Wealth Small School

Funds Funds

Beaufort $520,545 0

Bertie $604,552 $572,720

Camden $159,077 $656,102

Chowan $231,719 $606,947

Currituck 0 $538,392

Dare 0 0

Gates $272,712 $579,114

Halifax $927,256 0

Hertford $625,996 0

Hyde 0 $700,587

Martin $407,312 0

Northampton $526,773 $643,046

Pasquotank $598,210 0

Perquimans $219,716 $570,013

Tyrrell $80,347 $673,112

Warren $408,660 $558,850

Washington $302,228 $565,277

Area totals $5,885,103 $6,664,160

Statewide

total $41,483,809 $15,117,295

by CNB