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VOL. 132 | NO. 109 | Thursday, June 1, 2017

Shelby County Schools Debates Funding Strategy for Budget

By Bill Dries

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Shelby County Schools board members approved a two-year contract extension through the 2019-2020 school year for superintendent Dorsey Hopson Tuesday, May 30, with no debate or discussion and sent a combined $1.3 billion operating and capital budget proposal to the Shelby County Commission for approval.

DORSEY HOPSON and CHRIS CALDWELL

County government funding to the operating budget totals $454.5 million, which is not an increase from the current fiscal year. The commission takes up the SCS budget proposal in June 21 committee sessions.

Some school board members said SCS should become more aggressive about seeking an increase in funding in the future.

“We should always ask for more and let them tell us no,” said board member Stephanie Love. “We have so many issues. When we decrease our budget, it makes it seem as if we don’t need it and we do.”

School board member Kevin Woods agreed with Love on the need, but differed on the strategy, which led to more confrontational budget seasons when the legacy Memphis City Schools system was operational.

“I don’t think we should simply ask for an increase simply because we think they have additional funding,” Woods said of county government. “I think in future budgets, we should have a plan that if we can be more aggressive … we should speak to that.”

Hopson built a public push for increased operating funding from the county a year ago that resulted in additional funding for Shelby County Schools. But it also came with no ask on capital funding. In the current budget season, the emphasis has been on capital funding.

Hopson has said the school system is more stable coming into the new fiscal year than it has been in seven years of historic change in public education in Shelby County. His approach has included closing schools, which has helped to defuse traditional friction between SCS and the county, which is the only local funder of the school system but has no line-item control. SCS says how the money is spent, but has no taxing authority.

“Certainly we need more,” Hopson said of school funding as he talked cautiously about a pending lawsuit against the state of Tennessee over the state’s Basic Education Program – or BEP – funding formula.

“I think at the end of the day, the state has a constitutional obligation to fund education and we think they are not coming anywhere near close to where they need to be,” he said, while praising recent increases in BEP funding from Tennessee Gov. Bill Haslam. “The state needs to pull its weight.”

Hopson didn’t go into much more detail, citing upcoming depositions in the lawsuit.

Board chairman Chris Caldwell said he is “troubled” that the school system doesn’t seek more.

“These just seem like bits and pieces of what we really need,” he said. “I feel like it’s not our job to advocate to the amount the county commission wants us to. … Last year they over-serviced debt and we never saw that. … I would like to see us ask for closer to what our kids need.”

Meanwhile, Caldwell proposed and the board approved a resolution that would lock in up to $80 million in the system’s reserve fund for academic growth goals the school board has set through 2025. That would be out of a reserve fund that currently stands at $92 million.

Hopson and his staff have 60 days in the resolution to recommend a more exact amount that will not inhibit the district’s cash flow – it pays for federally funded items in its budget and then is reimbursed later in the fiscal year when the federal funding arrives.

Shelby County Mayor Mark Luttrell has also urged similar caution in using county government reserves, citing cash-flow problems that result before property tax revenues arrive later in the fiscal year.

By setting aside an amount in the SCS fund balance for specific programs across several fiscal years, some board members say that would make the reserve a less attractive target for commissioners, who may be opposed to additional county funding of schools and want to see the school system use its unrestricted reserves instead.

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