VOL. 131 | NO. 129 | Wednesday, June 29, 2016
Long-Term Issues Push County Budget To Deadline
By Bill Dries
It’s not the basics that are keeping Shelby County Commissioners from a majority vote on school funding in the new operating budget.
It is the broader questions and budget assumptions some commissioners want to change in the process.
The commission resumes work Wednesday, June 29, on completing a county operating budget and setting a property tax rate for the new fiscal year that begins Friday.
The work begins with an 8 a.m. budget committee session that will last at least until 11 a.m., the time commission chairman Terry Roland set for a meeting of the full commission to vote on the budget and tax rate matters.
The committee session will likely draw most, if not all of the 13 commissioners.
The goal is to reach a consensus in committee or get most of the way to a consensus on a set of compromises and then move quickly with a set of votes after that.
No commissioner has voiced specific opposition to letting Shelby County Schools use its share of $16 million in revenue from the county wheel tax – half of the revenue stream – for its operating costs. That comes to $12.4 million.
And the school system has all but formally agreed to come up with approximately $3.5 million. Add in $8.6 million in property tax revenue growth along with some other estimates of sales tax growth and you come to the $3.5 million the county would put in to get SCS the $24.7 million in new county funding it is seeking.
That is the central issue as the commission convenes Wednesday.
So is trying to reach agreement on a funding formula that foregoes the annual search for a piece of revenue here and piece of revenue there to come up with school funding.
The wheel tax raises an estimated $32 million per year. Half already goes to schools’ operating costs, and the other half has gone toward county debt. But such progress has been made in paying down debt, that other $16 million is earmarked to go to schools one way or another in the new fiscal year.
Commissioner Heidi Shafer and Eddie Jones argue that revenue streams going to education funding made debt reduction possible, because excess from those revenue streams were switched to pay down debt after the dollar amount budgeted for schools’ funding was reached.
“I’m for refunding debt as much as anyone else,” Shafer said last week before adding that by her estimate, the seven public school systems were due about $13 million that went to the county’s overall debt.
“We are starving the school population for money,” she said. “We’ve got to use this year to try to get it right.”
County Chief Administrative Officer Harvey Kennedy, however, counters that the county’s obligation is to fund a dollar amount and it is a dollar amount – not a revenue stream – that becomes the county’s “maintenance of effort” amount set by the state – the minimum amount of money the county is required by state law to come up with for schools unless there is a drop in attendance.
The new fiscal year is when that level of funding is set by the state. But few believe it will remain at that level because SCS superintendent Dorsey Hopson acknowledges that the SCS student population will likely continue to drop.
That’s just one – and probably the longest lingering – of the broader issues at stake in the last days of fiscal year 2016 at the Vasco Smith Administration Building.
The latest of those issues emerged last week when commissioner Mark Billingsley put on the table an offer by the Germantown Municipal Schools District to essentially buy Germantown Elementary and Middle schools from SCS for $5 million cash and an estimated $11 million in savings to SCS.
The interest by Germantown leaders in getting back some or all of the “three Gs,” as the two schools and Germantown High School are known, is no secret despite the timing of the offer.
Germantown Mayor Mike Palazzolo said he raised the possibility in mid-May when Germantown leaders met with SCS leaders to talk about ballfield leases for the coming year. Palazzolo had his staff do a detailed proposal that was ready to go just days before the commission’s meeting last week.
Hopson quickly said the offer is a separate matter from the county funding discussion. He also said SCS needs the three Gs for the shift in the school-age population to the southeast part of Memphis and the unincorporated county that make up Shelby County Schools.
Palazzolo said later he understood the separation of the two issues.
Nevertheless, it may surface again today if Billingsley feels like there is a deal to be made.
What could set the stage for that kind of deal is commissioners getting hung up on a request for increased funding of about $4 million to the Shelby County Sheriff’s Office for more deputies and more vehicles.
That appeal has made funding schools over the criminal justice system another broader issue.
If the commission vote sets a precedent for county funding of schools that doesn’t have to be reassembled with different pieces in a year, proponents of full funding of SCS will see it as a victory.
Commissioner David Reaves, a former SCS board member, has at times expressed doubt about supporting the level of increased funding sought by the school system.
But last week, he said, “My district supports an increase in funding.”
Reaves would also like to see a decrease in the county property tax rate of $4.37.