Local school districts will have more leeway in moving money between accounts as they manage their budgets.

The local districts have to figure out a way to fold into their budgets a $225 million unspecified cut this year. At the same time, they've been told to try to save jobs for teachers in 4th through 12th grades, Lynn Bonner reports.

About 90 percent of school budgets pay for people, said state board Chairman William Harrison. School districts couldn't meet requirements without budget flexibility, he said. The State Board of Education, acting on authority granted in the new state budget, voted today to loosen money transfer rules in about a dozen line items.

Here are the programs were districts are allowed new, unrestricted transfers: Academically & Intellectually Gifted; at risk student services/alternative schools; classroom materials/ supplies/textbooks; disadvantaged student supplemental funding; limited English proficiency; low wealth school supplemental funding; small county supplemental funding; school technology, teacher assistants; high school Learn & Earn.

The board has asked state Department of Public Instruction staff for periodic reports on district spending.

Senate majority leader Tony Rand said he expects lawmakers will react this session to a judge's ruling reshaping the way the state runs its schools.

Judge Robert Hobgood ruled today that June Atkinson, the state superintendent of public instruction, has the constitutional authority to run the state's schools and not William Harrison, who was appointed by Democratic Gov. Beverly Perdue appointed to run the state Department of Public Instruction and chair the State Board of Education.

Rand, a Fayetteville Democrat, said he believed there would be "significant" appetite in the legislature to ensure the governor can appoint the head of the state school system.

"The convoluted system we have now doesn't appear to me to be in the interest of educational progress in North Carolina," Rand said. "This has been a continuous pain for a significant time."

Hobgood said Friday he believed it would take a constitutional amendment to grant the governor that power. Rand said he would have to take a look.

Update: Gov. Beverly Perdue released a statement about the ruling. "I am reviewing the court’s ruling. I look forward to continuing to work with Dr. Harrison and Superintendent Atkinson to achieve our goal of providing a quality education for North Carolina’s children."

The Senate budget is the latest battleground for educational oversight.

A section of the 2009 budget released by Senate leaders last night would shift power from Superintendent June Atkinson to an appointee of Gov. Beverly Perdue's.

The two Democrats have been fighting over whether the superintendent of the head of the Board of Education should be in charge of schools. Atkinson has sued over the issue.

The budget sides with Perdue, changing wording in state statutes to put the chief executive officer — Perdue appointee Bill Harrison — in charge of administering state education tests:

(b) The Superintendent of Public Instruction Chief Executive Officer shall be responsible, under policies adopted by the State Board of Education, for the statewide administration of the testing program provided by this Article.

Update: "This proposed change is just another example of why we need the court system to determine the constitutionality of the role of the state superintendent," Atkinson told Dome. "We need that clarity."

Hat Tip: Chris Hayes

State superintendent June Atkinson said this week she has not yet decided whether she will sue to get the job of running the state Department of Public Instruction. 

But had some ideas for legislators on how they could clear up the confusion over who is responsible for the education agency, Lynn Bonner reports.

People who vote for the state superintendent every four years believe the winner will have the authority to run the department, Atkinson said. Atkinson, who is serving her second term, has never had that authority.

"It is confusing for the voters," Atkinson said. "I just want it to be settled."

Atkinson has objected to Gov. Beverly Perdue appointing a CEO and chairman, Bill Harrison, to run the department.

Atkinson said she has "two excellent options" for clearing up who is in charge.

One, honor the state constitution that says the superintendent shall be the chief administrative officer.

Two, legislators should vote for a constitutional referendum that would give Board of Education members four-year, staggered terms. They members would be appointed by the governor and confirmed by the legislature.

More after the jump.

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A bill would make a new, controversial high school graduation requirement optional for school districts.

Rep. Jimmy Love, a Sanford Democrat, filed the bill today in response to complaints about the cost to school districts that have hired project coordinators and incurred other expenses to meet a requirement the State Board of Education handed down, Lynn Bonner reports.

Next year's seniors must complete a project  in order to be eligible to graduate. The project includes a paper, a project, work with a mentor and an oral presentation.

State school board members are sold on the project, which they say allows students to demonstrate that they've acquired skills they need for the workplace and college.

Parents and students critical of the project say it's a waste of time and will cause struggling students to drop out of school.

Jack Betts says Gov. Beverly Perdue's education fix is a stopgap.

Writing on This Old State, the Charlotte Observer editor notes that the legislature recently received a report that said having an elected schools superintendent and an appointed board of education is dysfunctional.

Betts wonders if Perdue's proposal to have the board chair also serve as chief executive officer will make that any better.

I don't think this announcement will halt the questions about how our system of governance works, but Perdue is right about this: The legislature hasn't acted. I don't know if the legislature can act, given its difficulty coming to grips with what clearly has been a problem for the last quarter-century.

He noted that Perdue said it would take 18 months to two years for the legislature to amend the constitution, while she wanted to move quickly.

Howard Lee says Barack Obama can win N.C.

The chairman of the state Board of Education said he has not been very politically active in the presidential race because of restrictions from his service on the state N.C. Utilities Commission.

But as the first black mayor of a predominantly white city in North Carolina, Lee said he thinks Obama has a chance to win. He cited his early strength in the 1976 Democratic primary for lieutenant governor.

"Having run statewide in North Carolina — and having led in a campaign in the 1970s — I'm confident with the right kind of campaign Barack Obama can be very successful in North Carolina," he said.

Howard Lee is worried about school buses.

With the price of gas going above $4 a gallon, the chairman of the State Board of Education estimates that his agency will need as much as $60 million to help local school districts pay for busing.

The House put in $45 million in its budget — a number Lee says he can live with. But the Senate budgeted only $11 million.

"If we had to cut back to $11 million, we'd be in big trouble," Lee told Dome. "It means we would have to eliminate a lot of other programs, and the local school systems would really be put under a great deal of pressure."

Currently, school districts make up shortfalls in their busing costs with local tax revenue. Lee said that larger school districts in Raleigh, Charlotte and Greensboro could be hard hit if the state cuts back.

"When there's a shortfall, they end up making it up," he said. 

North Carolina education leaders are warning that they can’t live with the funding proposed by the state House.

The state House would provide less money for public education than proposed by Gov. Mike Easley, especially when it comes to awarding bonuses to teachers for student performance.

During today’s state Board of Education meeting, Deputy Superintendent J.B. Buxton warned there might have to be changes in the amount of bonus money given this year. He didn’t spell out what that could entail, but the choices wouldn’t be pretty.

If the state is short on bonus money, the rewards could be cut. Teachers could get less than the $1,500 they typically receive if their schools showed higher than expected improvement on state exams.

Easley could also pull money from elsewhere in the budget, including the amount that would be provided to individual school districts.

Howard Lee, chairman of the state board, urged his colleagues to lobby legislators to provide more money. If not, he said they may to consider major budget cuts the next time they meet .

“If we don’t get the resources we need, we’ll have to enter into crisis mode,” Lee said.

Howard Lee, chairman of the state Board of Education, fired back today at critics of the state's public education system.

During today's board meeting, Lee said he’s tired of hearing people trash the public schools. He said the public schools don't get enough credit for all the good things that are happening.

"I’ve told our legislstors, stop being critical and start being more supportive of the job we need to do," Lee said.

Lee recalled a presentation at last month's board meeting that highlighted some of the state's best high school students. He pointed to how a student at the much-maligned Hillside High School in Durham has been accepted into Harvard University.

"We’re doing something right," Lee said. "If we don’t pat ourselves on the back and toot our own horn, no one else will."