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VOL. 133 | NO. 75 | Friday, April 13, 2018

Luttrell Says County Pre-K Funding Source Likely to Differ From City’s

By Bill Dries

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Shelby County Mayor Mark Luttrell probably won’t follow the city’s blueprint for funding universal prekindergarten in Shelby County.

“I think the funding plan we will be bringing forward will be even more attractive to you than what the city is offering,” Luttrell told Shelby County commissioners Wednesday, April 11, during committee sessions.

Mark Luttrell

“The city is working off existing PILOTs,” he said, referring to payment-in-lieu-of-taxes agreements – city and county property tax abatements as incentives for economic development projects. “What we have in mind is a little bit more progressive on the county’s part.”

Memphis Mayor Jim Strickland is proposing that the city fund $6 million toward a goal of 8,500 prekindergarten seats countywide, up from the current 7,500. The increase in city property tax revenue the city gets when PILOTs expire and the property owners begin paying full taxes on their properties would go into a pre-K city fund. Revenue from 1 cent on the current city property tax rate also would go into the fund.

It would take five fiscal years for the tax increment from the PILOT expirations to ramp up to produce $6 million in revenue. In the interim, the city would put up $3 million in one-time money from city reserves to make up the difference along with the revenue from the penny on the tax rate.

The fund to hold the city money and the funding measure are making their way through the Memphis City Council – each part passing Tuesday on the second of three readings.

“We’re not looking to put any penny of our tax rate toward this,” county chief administrative officer Harvey Kennedy told commissioners. “Our position is a significant funding issue like this needs to be addressed with the overall budget requirement … not in isolation but in the overall context of the budget.”

Kennedy said using tax revenue from PILOT roll-offs is a common method for funding parking garages through the Downtown Memphis Commission. It’s also predictable, with a list of projects financed with PILOTs and the dates those tax abatements end.

Other options being considered, according to Kennedy, are using money from the $18 million to $25 million budget surplus the administration is forecasting for the current fiscal year, which ends June 30.

He also talked of an “alternative funding source.”

“There is a possibility looming out there that’s not appropriate to discuss,” is all Kennedy would say about the source.

County government already provides $3.5 million annually for prekindergarten funding.

The city’s pledge is $6 million in ongoing revenue starting July 1, 2019. It’s part of $16 million in public pre-K funding that is going toward a larger public-private effort to expand the early childhood education system and increase wrap-around services for children and their families from kindergarten through third grade.

The city and county revenue that starts to flow in the summer of 2019 would replace $9 million in federal grant funding for 1,000 of the existing 7,500 pre-K seats that runs out with the start of that fiscal year.

The next installment of revenue in July 2020 then pays for another 1,000 students.

Luttrell said the commitment of private and philanthropic funding for the effort through the nonprofit Seeding Success is crucial.

“This really needs to be sustained,” he said. “We are hopeful that will come to pass. It hasn’t yet.”

Haley Simmons, director of policy for Seeding Success, said the private funding will be from local and national sources.

“They are waiting to see what government puts on the table,” he told commissioners Wednesday. “We hope to have an announcement in the next month or two.”

The prekindergarten expansion would be through Shelby County Schools, which covers the city of Memphis and unincorporated Shelby County. It would also apply to Bartlett and Millington – the only two suburbs in the county that have public pre-K programs.

But children in any of the remaining towns and cities are eligible for Head Start programs, and Germantown has early childhood programming as well.

Commissioner Terry Roland raised concerns about countywide access if the county’s funding plan includes revenue from a penny on the county property tax rate.

Van Turner

“All I’m saying is to be equal,” Roland said. “I think we are on our way. We do have it in two of the (suburban) municipalities. But I’m saying in the future in Collierville or Germantown or Arlington and Lakeland – if any of those had a need that they would be able to share in this.”

Commissioner Van Turner said his priority is to make sure the funding is “correct.”

“I’m looking at the glass as half full and not half empty,” he said. “I guess the posture, hopefully, is we’re going to get it done. … All of the children within the county are our responsibility. … I don’t really care where the child is.”

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