Several Paths for School Funding Possible

By Bill Dries

The most important number at a weekend Shelby County Commission budget retreat was not the $145 million in new funding the countywide school board has asked for.

It was a percentage – the projection by Shelby County Assessor Cheyenne Johnson that the 2013 property reappraisal by her office will likely reflect a 4.63 percent loss of value on property for taxation purposes.

The projection is below the 5 percent drop that Shelby County Mayor Mark Luttrell and other county leaders expected would be the low side of the property tax revenue loss from the declining property values.

With the estimate in, the discussion now moves to what amount of new school funding has enough votes on the County Commission, the only local funder of public schools in Shelby County with the first fiscal year of the schools merger that begins July 1.

Even those school board members who voted for the “ask” of $145 million in new funding from the county don’t expect to get it.

Even the $60 million to $65 million range is questionable.

New schools funding at that level combined with a tax increase necessary to produce the same amount of revenue as the current $4.02 county property tax rate would be a combined property tax increase greater than 10 percent. Any property tax hike of 10 percent or more requires a nine-vote, two-thirds majority from the commission to win approval.

Before the weekend retreat, Shelby County Commission chairman Mike Ritz’s rough estimate was that a 9.9 percent tax hike involves $25 million to restore the revenue lost from the drop in property values for taxation purposes and perhaps $28 million in new school funding.

If that is the ultimate outcome, it would mean a phased-in transition to the schools merger over several fiscal years.

In that scenario, there is the possibility of an expansion of pre-kindergarten through a city of Memphis-run program and funded with a proposed citywide sales tax hike. Over several years, a call by President Barack Obama for more federal funding of pre-kindergarten could also translate to a pre-K expansion the school system doesn’t have to include at least in the county-funded part of its budget.

Parents of county school students have been the most vocal so far in their concerns about a shift away from staffing levels used by the county school system to student-teacher ratios that either match higher city school ratios or are in between the ratios of the two school systems.

The new county funding “ask” from the school board ballooned to $145 million when board members added back in the cost of applying the lower county school system staffing ratios across the larger city school system with the merger.

Among those voting for the $145 million amount were members of the former county school board who said they didn’t want the merger to become a “leveling down” to city schools staffing standards. The Memphis City Schools levels do not include school vice principals, fewer assistant principals and nowhere near as many teaching and clerical assistants that are a common feature of county schools.

By contrast, Ritz and others are certain the path to a nine-vote majority for a 10 percent or higher county property tax hike would have to include two of the five suburban county commissioners.

The group of five is Heidi Shafer, Steve Basar, Chris Thomas, Wyatt Bunker and Terry Roland. They are also the minority on the commission who has opposed the body’s part of the schools merger lawsuit contesting the creation of suburban municipal school districts.

When it comes to funding for the consolidated school district, all five have been vocal in insisting the school board still hasn’t made the “tough decisions” necessary to make the consolidated school system as efficient as it could be.

They and Shelby County Mayor Mark Luttrell have generally defined the “tough decisions” as outsourcing transportation and school custodial services and closing up to 20 Memphis schools in a single year – all three steps recommended by the schools consolidation planning commission.

The three measures came with an estimated savings to the consolidated school district of $40 million. But staffers from both school systems who evaluated the planning commission recommendations dispute the savings estimates.

Instead Memphis City Schools officials recommended closing four schools and school board members have questioned even those closings. They have specifically questioned closing underutilized schools in cases where the students from those schools would then be assigned to schools where student achievement scores are lower and in some cases part of the bottom 5 percent in terms of student achievement statewide.