By Julie Ball • Correspondent

Some lottery money used to pay the debt on local school projects is coming to Western North Carolina months after the payments were frozen amid the state budget crunch.

The money, which was withheld by the governor in February, was released late last month, and several area school systems say it will be used to pay debt on new and existing projects.

North Carolina Gov. Bev Perdue earlier this year withheld $37.6 million from the state’s schools “to ensure the state had sufficient resources to manage cash flow and payroll obligations,” according to a release from the governor’s office.

That money was the second quarter lottery distribution for schools. Late last month, Perdue announced she was releasing those funds to counties.

In Macon County, those dollars help pay the debt from new school projects including the recently completed renovation and addition at East Franklin Elementary School and a new school for fifth- and sixth-graders under construction across from Macon Middle School.

The second quarter payment, which was withheld, amounted to more than $97,000 for Macon County.

“It [withholding the lottery dollars] resulted in the county having to dig somewhere else in paying the bills that are due,” said Dan Brigman, superintendent of Macon County schools.

Lottery dollars alone don’t pay the full cost for needed capital projects in Macon County, Brigman said. But Macon County has a couple of projects in the works that will benefit from the lottery money.

The new school for fifth- and sixth-graders is expected to be completed in February, and should open for the 2010-11 school year.

Jackson & Swain counties

Jackson County also uses its lottery dollars to pay debt on school capital projects, according to Gwen Edwards, finance officer for Jackson County schools.

The county’s second quarter lottery payment is nearly $83,000.

“We use the money for debt, and luckily our debt payment was due prior to the time they froze the money, so it really didn’t affect us last year,” said Darlene Fox, finance director for Jackson County.

The county is using the money to pay the debt on the new building at Fairview School in Sylva, Fox said.

Swain County’s lottery payment for the second quarter is $41,544, according to the governor’s Web site.

School officials say that like other districts Swain County uses that money to pay debt on capital projects.

New projects in Haywood

For Haywood County, the lottery payment withheld by the governor amounted to $175,622.

The timing of the release of the money didn’t really affect Haywood County schools, according to Bill Nolte, associate superintendent with Haywood County schools.

“It would have impacted us had we never received it,” Nolte said.

Haywood County plans to use lottery money to pay back a no-interest or low-interest bond that the school system is pursuing.

“The state announced that it would issue interest-free or low-interest bond funds for capital expenditures,” Nolte said.

Haywood County initially applied for $1.6 million for 11 projects, mainly to update heating systems at local schools.

“Those were essentially projects to improve energy usage, change lighting, change out old boiler systems, change piping coming out of old boiler systems,” Nolte said.

Because so few school systems sought the bonds, the state asked schools systems to revise their requests. Haywood’s revised request for $4.2 million included money to replace one of the buildings at Waynesville Middle School.

However, the state approved only $3.8 million of the request, meaning the system is $400,000 short of the amount needed for both projects. The school board’s Building and Grounds Committee is expected to begin looking at ways to reduce the WMS project.

The county couldn’t begin construction on any of the projects until 2010 at the earliest. And Nolte said the projects will also depend on the county’s ability to sell the bonds.

“There are steps along the way that could upend the whole process,” he said. “We could get into it, and no one would buy the bonds.”

What the lottery money can’t do for local school systems is help make up for cuts in their operating budgets, which left a number of school districts in the area having to reduce staff.

Because of budget cuts, Haywood County, for example, has lost seven teachers, two assistant principals, a central office director’s position and two counselors, and the system has fewer teacher assistants and fewer custodians. In addition, the system had to combine some bus routes and deal with cuts in funding for textbooks.