NC School District CFO: Tariffs Are a Major Budget Risk

(TNS) — Cabarrus County Schools’ chief financial officer said Tuesday that President Donald Trump’s tariffs remain one of the district’s biggest budget risks this year.

CFO Phillip Penn told school board members at a finance work session Tuesday night the district is already starting to see tariff impacts as distributors raise prices on products because of economic uncertainty. Trump imposed sweeping tariffs on U.S. imports from other countries earlier this month, leaving small businesses, including those in Charlotte, on edge.

The uncertainty comes at a time when the district is already trying to make up a deficit in the current school year. While the district has made progress to reduce the nearly $11 million deficit, the district still needs to come up with $6.8 million before the end of the year to close the gap, Penn said.

“One of the four main things that I said is a risk factor in the budget for next year is the impact of tariffs,” Penn told The Charlotte Observer. “I do think there’s a risk to what we’re buying, particularly at the beginning part of the year.”

TARIFF PRICE INCREASE

Penn told Cabarrus school board members about a situation in the district where a price quote jumped nearly 60 percent from $2,667 to $4,163 for a mixing valve in a matter of hours. While the manufacturer had facilities in various countries, including China and India, Penn said he is worried about manufacturers taking advantage of tariffs and raising prices when it is not necessary. He’s advising school employees not to jump to make purchases just because of fears surrounding tariffs.

“I’m trying to figure out what the best way is to sort of arm our treasurers and our department heads not to fall victim to the fear monitoring that’s out there,” Penn said. “To say, ‘Sit tight. This stuff is all going to play out in the next 90 days in some respect, one way or another.’”

He said it could be important to check where products are imported from before accepting large cost increases. Penn told the Observer technology costs, like purchasing new student Chromebooks, are his greatest concern when it comes to tariffs.

Still, Penn said he is confident that the market and prices will eventually settle down as countries negotiate.

“The good news is (tariffs) tend to be short term until the micro equilibrium comes back again. The bad news is we’re already starting to see some of the impact of this,” he said at an April 7 budget meeting. “I do expect there to be some disruption, frankly, in the market as we go forward.”

Besides tariffs, Penn said the biggest risks to the upcoming budget are the continued growth of the Exceptional Children program, timing of local budget processes and revenue shortfalls.

©2025 The Herald (Rock Hill, S.C.). Distributed by Tribune Content Agency, LLC.