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VOL. 125 | NO. 167 | Friday, August 27, 2010

Court Ruling Renews School Funding Issue

By Bill Dries

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There is the installment plan and there is a special tax bill.

Those are two options the city of Memphis faces as it prepares to pay the Memphis City Schools a tab the school system puts at $57 million.

This week’s decision by the Tennessee Supreme Court not to hear an appeal in the long-running school funding case sets in motion a new set of talks between the city and the school system.

Memphis Mayor A C Wharton Jr. said the first item to agree on is how much the city owes. After meeting with City Council chairman Harold Collins and attorneys Thursday, Wharton said he and Collins want to reconcile the dollar amount and take a payment plan to the council in 30 days. Both said all options are on the table with no immediate move to raise taxes canceling out options like budget cuts.

The school system’s general counsel, Dorsey Hopson, said the city owes the district $57.4 million for the 2008-2009 school year.

The city began paying another $50 million to MCS earlier this year in a series of payments worked out between the city and the school system. Most of the money came from the city’s reserve fund and it’s unlikely the city will be going back to the reserves again.

When he first took office in October, Wharton proposed a one-time-only city property tax increase to pay the school system with a special tax bill that would have gone out soon after. The council voted down the idea even as most on the council knew an end game was approaching after losing at the trial court and appeals court levels.

The Tennessee Supreme Court opts not to hear the vast majority of the requests it gets to hear cases on appeal.

City Council member Kemp Conrad, who was not on the council when the school funding was cut, said the city should begin budget cuts immediately.

Conrad and a voting minority on the council advocated drastic budget cuts to anticipate ultimately losing the court fight. Conrad said he is prepared to find the money without a tax increase.

“Problems denied and solutions delayed will result in a painful and costly day of reckoning,” Conrad said. “Now, to avoid a gargantuan tax increase we will have to reduce the cost of government two months into our fiscal year.”

This week, MCS superintendent Dr. Kriner Cash outlined an $891.7 million school system operating budget for the next fiscal year that begins July 1, 2011. The budget proposal includes $78.2 million in funding from the city, which is 8.7 percent of the budget total.

Several council members have already talked of challenging the amount of city funding which is based on enrollment because they contend the school system’s attendance figures have been inflated in recent years.

The council recently approved a resolution sponsored by council member Shea Flinn seeking a city audit of the attendance figures.

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