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VOL. 131 | NO. 122 | Monday, June 20, 2016

Schools Funding Again Center Stage For County Commission

By Bill Dries

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Shelby County commissioners could wrap up most of the formalities Monday of their budget season.

But it will probably take a while.

The biggest issue of the season – school funding – appeared to be resolved with a compromise last week in committee sessions.

But it began to unravel, or at least fray around the edges, before it could be put on paper.

And the full commission will consider more funding for the Shelby County Sheriff’s Office, corrections officer pay parity with deputy jailers and Juvenile Court.

The commission meets at 3 p.m. at the Vasco Smith Administration Building. Follow the meeting @tdnpols, www.twitter.com/tdnpols.

Holding the county property tax rate at $4.37 on the second of three readings Monday is on more solid footing.

But commissioner Walter Bailey believes there should be a property tax hike and commissioner David Reaves would like to see the tax rate drop.

Walter Bailey

Bailey talked of a six-cent hike.

“That’s negligible,” he said. “You’re talking about a movie rental. I don’t understand why the timidity or the reluctance. It’s not hurting the taxpayers at all. It’s something they won’t even notice.”

“I think the tax rate is too high and I won’t support it,” Reaves said minutes later.

This will be the fiscal year that all revenue from the county wheel tax goes to schools.

Half of the $32 million in annual revenue was already going to schools’ operating costs. The other half that currently goes to pay the county’s debt service is going to schools as well.

Shelby County Mayor Mark Luttrell proposed that half of the revenue go to schools capital needs, but the commission recommended last week letting Shelby County Schools use that revenue for its operating budget as well.

Part of the compromise appears to be intact politically.

The argument is whether the county should come up with more from other places in its budget or SCS should use its reserves – or some combination of both – to make up the rest of the $7 million needed to fully fund its budget.

Van Turner

“We could just vote on it or we could just keep talking,” budget committee chairman Van Turner said at one point Wednesday. “I’m just making sure everybody is still awake.”

After eight hours that is a very real factor in political decision-making. And after some of the “yes” votes for the committee recommendation on the compromise left the meeting, it began to unravel.

The compromise no longer has a committee recommendation. That may not matter once the 10 votes in favor of the compromise initially are all assembled again Monday.

The county operating budget includes an amount of funding for all seven local school districts within Shelby County. That funding – capital and operating – is distributed based on average daily attendance, with SCS getting the largest share of 78 percent.

The amount of county operating funding for all seven school systems with last week’s compromise was $419.4 million.

When commissioners talked Wednesday about how much new funding SCS was requesting -- $27.4 million – there was another calculation going on by commissioners and the administration.

For instance, at one point the amount requested by the school system stood at $35 million in new county funding. That included an extra $8 million in per pupil funding that shows up in the SCS budget, but is passed through by the school system to charters and the Achievement School District for underperforming schools.

But when the six suburban school districts are calculated in, that $35 million becomes $44.5 million more in school funding in the county budget.

County funding accounts for 45 percent of the total revenues in the SCS operating budget. Most of the rest is federal and state funding for an operating budget that is just below the $1 billion mark.

Of the seven public school systems, SCS is the only system that gets no municipal funding. The other six systems get some funding from their local city or town governments. Shelby County government is the sole local funder of Shelby County Schools.

There was quite a bit of discussion among commissioners early in the budget deliberations for City Hall to pitch in some funds, as schools within the city of Memphis’ boundaries make up most of SCS.

The dollar amount that the commission approves for local schools – SCS and suburban – becomes a more permanent amount with the fiscal year that begins July 1. That will be the third fiscal year of the schools demerger and by state law, that’s when the “maintenance of effort” is set by state education officials. Thus, the funding amount becomes the minimum that must be provided to a school system for the state to contribute its larger share of funding to the same school system, which includes a pass through of federal funding.

The maintenance of effort amount can change, but only if the number of students in the school district goes down, and then it’s by a formula.

The SCS head count of students is expected to drop in the next few school years, according to SCS superintendent Dorsey Hopson.

“We fund almost a half a billion dollars,” commissioner Mark Billingsley said last week. “I want the best for kids, but the reality is that we have got a shrinking school base.”

Hopson is trying to stop the shrinkage, but has said SCS currently has approximately 27,000 more seats than students.

Hopson wants to elevate the system beyond turn-around schools into schools that will compete more with charters, the state-run Achievement Schools District and private schools, which are among the increased choices where parents can send their children.

Some of those models beyond SCS’s Innovation Zone turn-around model are ultimately less expensive by Hopson’s estimate.

PROPERTY SALES 51 334 9,936
MORTGAGES 41 330 10,946
BUILDING PERMITS 348 1,216 22,173
BANKRUPTCIES 43 348 6,311