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Principal Bonuses Delayed Without State Budget Approval

Elizabeth Yelverton | NCASA Legal Affairs & Policy Manager

Despite October being the designated month to celebrate hardworking school principals across the nation, many principals in North Carolina may be disappointed to learn they will not receive their expected performance bonuses this month, as the state budget impasse continues. North Carolina law allows certain funding to continue at the previous year’s levels absent a state budget; however, principal bonuses are not covered under that continuation-budget authority and must be approved by lawmakers each year. In a School Business Newsletter sent last week, Department of Public Instruction (DPI) staff noted, “No performance bonuses for principals are authorized at this time, and School Business will not be providing an allotment unless legislative authority is provided.” Bonuses for veteran teachers, as well as salary step increases expected on July 1, 2019, have also been put on hold indefinitely.

The proposed budget passed by legislators and vetoed by Governor Cooper at the end of June includes several changes to principal performance bonuses and principal salaries. While it would eliminate the principal double bonus program, it also would increase the bonus amounts for principals in the Top 5% and Top 10% of growth from $10,000 to $15,000 and from $7,500 to $10,000, respectively. It also would create a new principal recruitment program giving up to 40 principals whose schools “exceeded growth” expectations with a $30,000 annual salary supplement for 3 years (for a total $90,000 incentive) if they accept employment at a school in the bottom 5% in school performance.

Regarding proposed salary raises, the budget would provide $18.1 million in FY 2019-20 and $19.2 million in FY 2020-21 to increase principal and assistant principal (AP) compensation. This funding, if ultimately approved, amounts to an annualized average raise of 6.2%, or $4,650, for school principals — the highest raise that lawmakers proposed for any state-funded employee group for FY 2019-20. The estimated average raise for assistant principals would be 1.9% in FY 2019-20 and 3.5% in FY 2020-21. The budget would also adjust existing ADM tiers, extend the salary hold-harmless protections for principals and assistant principals, and keep in place advanced degree supplements for assistant principals.

While the state may be currently unauthorized to provide these bonuses and proposed salary increases, there is a chance that educators could see a boost in their paychecks under either of two possible scenarios. First, if the N.C. Senate is successful in overriding the Governor’s veto before the end of the month, the funding as outlined in lawmakers’ current budget proposal would become law. Alternatively, lawmakers could also pass a “mini budget” bill authorizing such funding in the absence of the full state budget, although this bill would also be subject to action by the Governor.

House Speaker Tim Moore (R-Cleveland), in a recorded interview with WRAL-TV this week, said he is working to roll out a pay package for K-12 educators as quickly as possible, indicating it could be one of the next proposed mini budgets to emerge. Moore, while not referencing any specifics for principals or assistant principals, said he hopes the package will include larger pay increases for teachers and non-certified school personnel than currently outlined in the vetoed budget bill.

The North Carolina Association of School Administrators (NCASA) has been closely following budget developments and is continuing to speak with lawmakers about the critical need to pass these bonuses and salary increases soon, as well as approve other needed public school funding, including releasing expansion money to cover ADM enrollment growth. We will continue to provide members with budget developments as they occur.

Elizabeth Yelverton