Press
More Than One Plan
BILL DRIES | The Daily News
October 02, 2009
Shelby County Commissioners will have at least two blueprints for single-source education funding to consider in committee sessions Wednesday.
Commissioner Mike Ritz is offering a seven-year transition plan to total Shelby County government funding of both public school systems. There would be a county property tax hike and a city property tax cut each of the seven years to raise $78.3 million more in education funding. That is the amount of funding for Memphis City Schools to be provided by the city of Memphis in the current fiscal year.
“That’s the number the city and the city school board agreed was the amount to do this year,” Ritz told The Daily News, referring to an agreement for this fiscal year that remains in place as an appeal is pending in the court case over whether the city of Memphis can cut its funding to the Memphis school system.
Shelby County government is already the major funder of both Memphis and Shelby County school systems.
Ritz’s proposal would drop the city property tax rate by 70 cents and raise the county property tax rate by 67 cents. But that is an estimate that could vary because the seven years span two property reappraisals. The reappraisals determine how much a penny on the tax rate generates in revenue for city and county government.
The County Commission also will discuss a four-year plan by Commissioner Mike Carpenter. His plan, based on the county raising the same amount of new revenue, involves a 12-cent county tax hike over two years and a city tax rollback.
Carpenter would use projected growth in county property tax collections, local option sales tax and assessed property values, as well as two of the four cents of the county tax rate outside Memphis dedicated to rural school bonds to raise the bulk of the revenue. The Carpenter plan also relies on $1 million annually from Memphis Light, Gas and Water Division payment-in-lieu-of-taxes (PILOT) funds to the county.
State issues
Like Carpenter, Ritz’s goal in the plan is to avoid having to seek the approval of the Tennessee Legislature for any provision. Thus, both plans have to raise approximately $35 million more per year for Shelby County Schools because any funding for one school system means a share of funding for the other school system based on average daily attendance (ADA). The ADA split, required by state law, is roughly 70 percent Memphis schools and 30 percent county schools.
“I used seven years because obviously there are going to be tax increases on county property owners,” Ritz said of his timetable. “The property owners who have children in the public schools and generally pretty wealthy people don’t object. Retirees are particularly concerned because they are living on a fixed income. They don’t catch a direct benefit.”
Ritz said the seven-year time frame also is contingent on a Tennessee Supreme Court decision on whether the city of Memphis is required to fund city schools at a certain level.
“I wanted to be sure that we had everybody’s attention in respect to getting this lawsuit adjudicated, not settled,” he said. “We’re not giving (Memphis City Schools) any extra. But we are eliminating the big risk that the maintenance of effort may not apply to the city schools and the city can just keep nickel and diming them down.”
Convincing still needed
The County Commission has endorsed moving to single-source funding. The Memphis City Council has not made a decision. Neither has the Memphis school board. The Shelby County school board is opposed to it.
County school board Chairman David Pickler has been telling audiences at town hall meetings in suburban Shelby County that single-source funding could be a prelude to consolidation of the two school systems.
But Ritz’s plan, which is a contract, specifically rules that out.
“Nothing in this agreement shall be deemed, construed or applied to terminate the legal status or existence of the Memphis City Schools or the Shelby County Schools,” it reads. “Nothing in this agreement shall authorize the merger or consolidation of MCS with SCS. The parties hereto agree that they do not desire or want this agreement to be used to support the merger or consolidation of MCS with SCS.”
Ritz said he expects opposition to single-source funding to remain vocal and intense.
“The suburban political officials are going to attack it like nobody’s business,” he said. “They don’t want us talking to the City Council about what time it is.
I don’t think we’re going to overcome that at all. Almost everybody else wants to see what we are talking about … unless they’ve drunk the Kool-Aid and are addicted.”
Any growth in revenue beyond what is budgeted for the school systems would go into a trust fund administered by the Shelby County trustee, which only could be used for the two school systems. The trust fund was part of another plan Ritz floated earlier this year.
Like Carpenter, Ritz said his plan could change in some respects.
“It’s highly possible that the County Commission might increase the number of dollars going to the two school boards in any year of this process,” he told The Daily News. “What wouldn’t change is the fact that every year we would pick up a specific set of dollars for city schools and have to ADA that (money) that year for the county. Every year the county (schools) gets a windfall.”
County school leaders have disputed the description of the ADA share of funding as a windfall.
“Obviously, it’s a kind of forever deal if it’s agreed to by all of the parties,” Ritz said. “I thought we ought to set it up as sort of a deliberate process. In committee it may go to eight (years). It may go to five (years).”
