The funding gap for the still tentative schools merger stands at an even $35 million in new funding.
The new total came Tuesday, May 14, after interim schools superintendent Dorsey Hopson told countywide school board members he and his staff had eliminated a “district initiative department” that would have cost $737,366.
The changes reflect a still fluid budget proposal that the countywide board votes on Thursday, May 16, and submits to the Shelby County Commission for local funding.
Hopson also said he and his cabinet had found enough funding to add 29 more pre kindergarten classes in the consolidated school system.
But Hopson warned the funding for that expansion is Race to the Top funding from the federal government through the state that runs out at the end of the fiscal year that begins July 1. So, to continue the pre-k beyond the new fiscal year, the school board would be searching for a new source of funding.
Hopson also announced the school system has a waiver from the state that will allow it to use $9 million from the state in cost of living pay adjustments to level teacher and principal pay between the two existing school systems in the first school year of the merger which begins Aug. 5. The balance of approximately $3 million left after that leveling, which is required by state law, would be put toward leveling pay among assistant principals.
First reactions and questions from school board members revolved around ways to shift funding in order to expand pre kindergarten to more schools.
Some board members also questioned $67.8 million in capital improvements project spending on three school projects in Shelby County outside Memphis. The projects are a new southeast elementary school in unincorporated Shelby County, phase two of school improvements at Millington Central High School and renovations at Germantown High School.
Several board members questioned whether the one time capital funding should be spent since Millington and Germantown could become part of suburban municipal school districts suburban leaders are moving toward forming in the 2014-2015 school year.
Suburban leaders have said their goal with the school districts is to also serve students outside the boundaries of their towns and cities who currently attend those schools, including students in unincorporated Shelby County.
“Is it smart to proceed with that improvement with the very real possibility of municipal school districts?” school board member Mary Anne Gibson asked, referring to the Germantown renovations.
“If the board says we shouldn’t move forward … that would make a lot of sense in this situation,” Hopson responded. “No, it’s probably not smart to do it at this time. … I think that’s a great discussion for the board.”
Hopson pointed out that the capital funding is money for one-time expenses and could not be used for the operating budget or toward the operating budget funding gap of $35 million.
The budget proposal includes $103.7 million of cuts from the combined budgets of the two school systems. The largest single item is the 26 percent reduction in the consolidated school district’s central office totaling $17.6 million. Harmonizing health and life insurance benefits between the two school systems was the next largest amount at $13.6 million followed by $12.7 million saved from the outsourcing of custodial services.
The $9 million to level salaries is among $16.2 million in budget additions that also include $3.4 million for the opening of the new Belle Forest Community School in southeast Memphis with the new school year.
The budget proposal totals $1.18 billion which Hopson pointed out is $75 million less in spending that the two districts will spend combined in the current fiscal year that ends June 30.
The county commission’s budget committee reviews the budget proposal May 22 that is approved Thursday by the school board.
If the commission rejects the budget plan, Hopson has said he will be prepared to submit a new budget plan to the school board that will match the amount of funding commissioners indicate they can provide. Those options include varying lesser levels of new funding as well as no new funding.