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VOL. 128 | NO. 37 | Friday, February 22, 2013

Budget Deliberations

County Commission has plenty to discuss at budget retreat

By Bill Dries

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When Shelby County Commissioners get together Saturday, Feb. 23, at Memphis City Schools Central Nutrition Center for a county budget retreat, they will have a long menu of county financial matters to review.

Shelby County Commissioners hold a budget retreat Saturday, Feb. 23, in which they will begin looking at preliminary budget numbers for county government as a whole.

(Photo: Lance Murphey)

The item that is expected to get the most attention is county financing of the first year of the consolidated school district. While it might be the most discussed item, it probably won’t draw any kind of action or even endorsement or rejection from the commission.

“It will not be scheduled to be voted on – n-o-t,” said County Commission chairman Mike Ritz who worked out ground rules for the budget retreat and beyond in a memo to leaders of the two school systems, countywide school board chairman Billy Orgel, county commissioners and the county administration. “I don’t want to create a ping pong ball effect of running the budget back and forth across the city between the two bodies.”

Ritz will not attend the morning session of several hours, which will be overseen by budget committee chairman Melvin Burgess.

But his arrangement with the school systems that become a single merged system with the new fiscal year that starts July 1 and a school year that begins Aug. 5 is that these are preliminary talks with no budget numbers considered a firm proposal.

The countywide school board approved a budget estimate for the session that asks for $145 million in new funding for the first merger budget.

After Saturday’s retreat, the commission will review financial statements from schools system leaders and other data including audits of both school systems.

All of that will be part of the commission’s deliberations on an overall county budget.

“The agreement is that we’ll get the (schools) budget to the County Commission (later). We’ll set the tax rate and that will determine what the schools get,” Ritz said. “That will be the bottom line. I’m sure there will be pleas made by people from the schools during the hearings on the budget resolution and the tax votes. Whatever we decide to do then the school board will redo their budget to reflect monies we appropriate.”

Even some school board members who voted for the $145 million “ask” don’t believe they will get that much in new funding from the County Commission. Add Shelby County Mayor Mark Luttrell to the group as well.

“I think that $145 million figure was a statement of frustration as much as anything else after a very lengthy school board meeting. I hope the school board will go back and re-evaluate its position,” Luttrell said. “I think the County Commission is going to expect the school board to go back and be a little more realistic. … And they’ll come back and show some resolve to address some of those very critical issues that were embraced in the recommendations of the transition planning commission.”

The planning commission recommended closing 20 under-utilized schools as well as outsourcing transportation and school custodial services. The school board hasn’t voted yet on the outsourcing and is exploring closing four schools by the start of the merger.

Ritz and Luttrell think extra funding for the consolidated school system is possible but each says there are not nine votes – or the two-thirds majority – necessary to pass a county property tax hike of 10 percent or more.

Even a 9.9 percent property tax hike with a seven-vote majority on the commission wouldn’t get the school system to the $65 million extra ask recommended by the staffs of both school systems.

Half of the 9.9 percent property tax hike revenues would go toward making up what the county is expected to lose in revenues from the 2013 countywide property reappraisal for tax purposes. And there is several million for a settlement with the U.S. Justice Department on Juvenile Court reforms and the cost of the Shelby County Sheriff’s Office replacing Memphis Police Department officers in what are now city schools. Ritz’s estimate is without any pay raises for county employees.

“That $60 million has to cover everything we need to add to the budget this year,” Ritz said. “That includes probably $25 million just to make up for the lost property taxes in the reappraisal. That leaves you with probably $28 million maybe for schools. That’s a far cry from my goal.”

Ritz argues if a half-cent countywide sales tax hike had been approved by voters last year, the numbers might be better.

“That $30 million (in sales tax revenue for schools) plus this number now would have been real close to $60 million,” said Ritz who campaigned for the sales tax hike.

Luttrell opposed the measure saying the school board has not made the “tough decisions” on school finances.

“We’re continuing to talk to the school leadership, the superintendents as well as the chairman of the board and trying to get them back to the table,” Luttrell said of decisions to come by the school board.

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