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VOL. 123 | NO. 248 | Friday, December 19, 2008

Funding Remains Major Issue At Year’s End

By Bill Dries

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The year’s most critical political moment came near the end of the budget season at City Hall. In June, the Memphis City Council voted to cut the city’s $93 million share of funding to the Memphis school system in fiscal year 2009 that began just weeks later. With the vote, the council members – nine of whom began their first term of office six months earlier – confirmed their status as agents of change.

More important, they opened the long-jammed floodgates on the broader issue of how local governments operate. The whole question has long given the volatile turf of public education and the two local school systems a wide berth.

It was the first hot button the new council went for. Even council members who had reservations agreed with the sentiment. Then they and the school system went for their respective attorneys. There was a lawsuit and a countersuit – both still pending at year’s end. Even if there is a ruling in Chancery Court between now and New Year’s Day, whoever loses in that ruling is expected to appeal, and the appeal is expected to go all the way to the Tennessee Supreme Court.

Sticking points

The council decision also prompted the latest in a series of study groups on the local funding of public education. The council decision is also the major culprit in the sentiment that threatens to make the committee’s work a political draw.

Memphis school board member Dr. Jeff Warren said the committee discussion about long-term plans isn’t resolving what he sees as the issue that must be dealt with first. “I think it would be helpful for us to remember exactly why we’re here,” he said earlier this month, referring to the funding cut followed by a countersuit at least temporarily resolved by the school system using its reserve funds. More of the reserve funds were also used to fund new initiatives by new city schools Superintendent Dr. Kriner Cash.

“We will not make payroll by November of next year if we do not have the funds restored by the City Council,” Warren said as he advocated for a single-source funding district that would give taxing authority to both school boards meeting jointly, with the Tennessee Legislature having the final say on a school tax rate and rate increases.

But Shelby County Board of Commissioners member Mike Ritz said the school board should have cut its budget for the current fiscal year when it had the chance. He argued that the debate has moved beyond what the city school system lost.

“I’m going to be very blunt with you,” Ritz replied. “I think it may have been imprudent for the school board not to cut their budget when they didn’t get the money they expected. … If you want to say Shelby County government is not doing its fair share, go ahead … But I don’t think it’s going to stick.”

A Tower of Babel

Most of those on the panel agree on single-source funding, but there are so many versions of the general concept that some of the specific plans are the antithesis of other plans.

Memphis school board president Tomeka Hart said if a single-source plan gets on the ballot and is approved by voters, the city school system will be seeking a tax hike to make up for what it lost in a banner year for the long-standing question of school funding.

The county school system didn’t walk away unscathed either. The County Commission, which is the major funder of the Memphis city and Shelby County school systems, announced it would not make up the $66 million in funding the council cut. The body funded both school systems with no cuts. But it did not allocate a part of the tax rate to education.

Commissioners were concerned about a windfall in the past when the tax rate produced more revenue than either school system requested. The county was then obligated to fund that amount under state laws on “maintenance of effort.” It’s the very set of state laws at issue in the Memphis school system’s lawsuit against the council.

The Shelby County school system threatened legal action over its exclusion from the tax rate. The Memphis school system didn’t.

Coming up

The county school system and the commission worked out a deal that is expected to be approved at Monday’s commission meeting – the last of 2008. The compromise sends any excess revenue from that part of the tax rate to a special reserve fund. The ad hoc committee’s report may come without one of the critical players at the table. No voting members of the group from the county school system or county school board were at the committee’s last meeting this month.

Also, County Commission chairman Deidre Malone is preparing to ask the committee to rule that those who haven’t attended a majority of the group’s sessions can’t vote on the report. Malone is chairing the committee but is not a voting member.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 64 87 1,429
MORTGAGES 39 60 1,107
FORECLOSURE NOTICES 7 13 203
BUILDING PERMITS 92 209 3,265
BANKRUPTCIES 42 84 837
BUSINESS LICENSES 21 23 352
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0