Schools Look to State for Money Owed

By Bill Dries

When the Tennessee Legislature returns to session in January, the consolidated school district will ask legislators to pass a law compelling the city of Memphis to pay a court judgment it owes the school system or lose state funding.

Countywide school board members voted Tuesday, July 30, to seek the law from a legislature that has approved defining the schools merger and establishing suburban school systems separate from the merged school system.

“We seem to have the ability to go to the state to solve local issues,” said school board member Kevin Woods. “I’ve steadfastly opposed such options because I think we should be able to resolve our issues locally. But we do need to get these dollars.”

The resolution is a response to the school system’s continuing effort to collect on a $57 million state court judgment the school system won against the city of Memphis.

The system successfully sued the city over the 2008 Memphis City Council vote to cut city funding to Memphis City Schools. The school system hasn’t collected on the judgment because of a counterclaim from the city, which claims it is owed more than the judgment to repay funding it provided the school system over several years.

School board member David Reaves said the idea of his proposal is sanctions that include withholding state funding to any local government until it pays the maintenance-of-effort amount.

“Basically what we’re asking to do is to place this on our legislative agenda,” he said. “It’s a formal grievance process for filing with the state when the maintenance of effort is not met. It involves withholding state funding from the funding body until it is provided.”

Interim schools superintendent Dorsey Hopson endorsed the effort. Hopson said he and his staff approached the administration of Memphis Mayor A C Wharton Jr. several months ago about paying the judgment over several years.

The city came back a month later, according to Hopson, with a counteroffer “that suggests the city doesn’t have any interest in trying to resolve this.”

“This board has tried and tried and tried and we’ve gotten nowhere,” Hopson said. “The only option is to select a court … and it may be four or five more years.”

Hopson was the board’s general counsel when it filed suit against the city in Chancery Court over the maintenance-of-effort requirement in state law. Without legislation, he said, the only remedy is for the state to withhold state funding from the school system.

“We don’t want the penalty for Memphis not paying what it owes,” he said. “This would ask the legislature to have another process to deal with it probably more efficiently.”

Hopson’s staff will draft legislation that the school board will review before lobbyists for the school system begin seeking support for it in Nashville. School board member Chris Caldwell suggested a requirement in the legislation that in such a funding dispute, the local government put the disputed funding in an escrow account.

Meanwhile, Woods said some council members he’s approached about resolving the dispute have told him “they have no fear of not getting re-elected.”

“For a body to be able to think they can just refuse to pay us without any repercussions is somewhat a slap in the face to us as a 23-member board,” Woods said. “We need someone to be in their faces to remind them your job is on the line when you don’t support our children.”

The school board meeting Tuesday was the next-to-last meeting of the 23-member board. After the August school board session, the board will reduce its size to either seven members or 13 members. The number depends on a pending federal court decision on a bid by the Shelby County Commission to appoint six new members to make the board a 13-member body as of Sept. 1.