Gaston County gives $10 million to school district to avoid up to 400 layoffs
Gaston County will shore up its school district’s $10 million shortfall, avoiding 100 layoffs this Friday.
Gaston County Commissioners voted unanimously Tuesday to cover the school district’s dire deficit. GCS Superintendent Morgen Houchard told commissioners that, without the funding, he would have to lay off 100 employees Friday, eventually followed by up to 300 more.
Commissioners said they felt they had a “moral” obligation to help the school district out of the hole but also were not responsible for the circumstances.
“It hurts my heart that this is happening,” County Commissioner Cathy Cloninger said Tuesday. “But, it’s a necessity to support our schools, for our teachers to work and to support students.”
Vice Chair Bob Hovis agreed.
“We have no responsibility for this shortfall of yours, but we understand that it affects Gaston County. It affects our image, our ability to recruit new businesses, new employees. It affects us everywhere,” he said. “Statutorily, we don’t have a responsibility, but morally, we do.”
Gaston County Schools is the biggest employer in the county, with around 3,900 employees, according to the Gaston County Economic Development Commission.
The $10 million accounts for 2.1% of GCS’ budget and will come from the county’s fund balance – a kind of “rainy day” fund. Hovis indicated the county and school district will work out a plan for the funds to be repaid, though they haven’t hammered out the details.
Where’d the shortfall come from?
Houchard said the gap came unexpectedly earlier this school year, after he and the Gaston County School Board received false information from a “trusted, long-term employee” about this year’s budget.
“I was led to believe and supplied with pre-audits to show that our numbers and budget were in-line with revenues that we would be able to balance by year’s end,” Houchard said. “Four months into the school year, I began to question whether this information was correct, and it was not.”
The shortfall is due to a combination of a significant decrease in low-wealth funding from the state, inflation, the end of federal COVID relief funds, and “staffing levels not aligned with declining financial resources,” Houchard said.
Gaston County Schools saw a steep decline in “Low Wealth Supplemental Funds” from the state this school year. School districts are eligible for the funding based on their inability to generate enough revenue to support public schools at the state average level. Eligibility is calculated using a combination of tax base, property value per square mile and average per-capita income.
Gaston County’s tax base increased by more than 55% between the 2024-25 school year and the current one, from $22.5 billion to $34.9 billion. As a result, Gaston County Schools qualified for far less low wealth supplemental funding this year than last year.
The school district eliminated 83 positions before the school year’s start and implemented a hiring freeze on central office positions in November. In December, Houchard extended it to the whole district.
On March 1, Houchard placed a spending freeze on GCS. All spending outside of contractual obligations had to get the approval of Houchard or an assistant superintendent.
It was not enough to carry the school district through the end of the school year without the county’s help, Houchard said.
This story was originally published March 25, 2026 at 2:30 PM.
