Luttrell Says Timing Key to Schools Funding

By Bill Dries

Shelby County Mayor Mark Luttrell refers to the start two years ago of the reformation of local public education as “chaos and confusion.”

With the merger of the county’s two public school systems now about to become a demerger to seven school systems, Luttrell said there is more change to come. But he also believes most of the uncertainty is in the past.

Shelby County Mayor Mark Luttrell appeared on “Behind The Headlines” to discuss schools funding.

And the remaining funding questions revolve around timing.

“I’m pleased to see that we are getting this whole discussion kind of out of the political arena. We are now getting it in the hands of the professionals in education,” Luttrell said on the WKNO-TV program “Behind The Headlines.” “We’re in a heckuva a lot better shape than we could have been. … I think this transition is going to take a few years before it gets really settled.”

The program, hosted by Eric Barnes, publisher of The Daily News, can be seen on The Daily News Video page, video.memphisdailynews.com.

Shelby County government is the sole source of local funding to Shelby County Schools. It, along with the respective suburban governments, will provide local funding to the six suburban school systems currently taking shape.

Of the county’s $4.38 property tax rate, $1.91 goes to education funding that will be spread across the county’s seven school systems based on the average daily attendance in each system.

With open-enrollment agreements among the school systems, all are competing for students and the share of government funding from the state and Shelby County government that comes with those students.

Beyond that, Luttrell said startup costs for the new suburban school systems remains an open question that he is discussing with suburban leaders.

“But we don’t have a lot of flexibility in county government for advancing money. We’re on a pretty tight schedule ourselves based on when the revenue starts coming in from the property tax,” he said. “We’re going to look at where we can help the municipalities. It’s been my objective from the very beginning that it’s our responsibility in county government to see what we can do to help.”

Each of the six suburban towns and cities raised their local sales tax rates specifically to fund the new school systems, and all also have their own property taxes.

Luttrell said the issue of startup costs is one of timing.

“About the first of the school year, we’ll start making payments to those school systems,” Luttrell said of the $382 million in funding county government will provide across all seven school systems. “Many of these funding sources won’t start hitting the municipalities until this summer. But (the school systems) are ramping up now. … They’ve got about six months to ramp up and be ready to go.”

Luttrell said he and Memphis Mayor A C Wharton Jr. continue discussions about whether the city’s plan for a Tourism Development Zone to pay for Mid-South Fairgrounds renovations would mean a loss of sales tax revenue that would otherwise go to fund local public education.

The zone is an area where incremental sales tax revenue is captured and dedicated to financing the cost of improvements for a given project within the zone.

Wharton and his administration contend the three-square-mile zone would not reduce or impact the portion of the sales tax that goes to local schools.

Luttrell said his reading is that the answer is not that clear-cut, even though the baseline in the state formula ensures a portion still goes to education.

“The area for discussion is the increase in sales tax revenue from the improvements in the TDZ that are in question,” he added. “If the TDZ is going to generate more sales tax, then we want to make sure that that formula for ensuring that education gets its share of the sales tax is still in place. There seems to be some ambiguity in the law.”

Shelby County Commissioners are considering a resolution urging the Tennessee Building Commission to reject the city’s application for a Fairgrounds Tourism Development Zone that is on its way to Nashville. The commission delayed a vote on the resolution after Luttrell asked for time to talk with Wharton.

“This is where county government and city government have got to be very careful that we don’t step on each other’s toes,” Luttrell said. “What Memphis hopes to do with that property is really a Memphis decision. Where the county has an interest is the sales tax.”

Watch Luttrell's "Behind the Headlines" interview: http://bit.ly/1f93CFQ