More than three months after Shelby County Schools began publicly building its 2015-16 budget, the long, arduous process reaches a milestone Monday when the Shelby County Commission is expected to vote on the county’s $1.1 billion spending plan, funneling about one-third of the amount to K-12 education.
The vote will come more than a month after the Shelby County Board of Education approved the district’s own spending plan — a $974 million budget that slashes $125 million — and requires approval from the County Commission.
Here are five things to know about the significance of the commission’s vote, as well as the financial challenges facing the district under a pared-down budget for next school year.
1. Superintendent Dorsey Hopson is getting additional funding from the commission, but probably only about half what he requested.
Hopson and board members had asked commissioners to invest an extra $14.9 million in Shelby County Schools on top of the $381 million allotted based on student population.
During two appearances, they pled their case and were grilled by commissioners over their spending habits. Last week, the commission’s budget and finance committee recommended $7.9 million more for the county’s largest school district, about 10 percent of which would go to district-authorized charter schools and other schools operated by the state-run Achievement School District. The recommended budget also includes another $2.1 million to be distributed among the county’s six suburban municipal school districts.
An increase in funding for education likely will mean cuts to other county departments.
2. How the additional money will be spent is uncertain, since both Hopson and commission leaders have different ideas of what should take priority.
District leaders had asked for extra money to hire more reading intervention coaches, purchase computers for online testing, and recruit a marketing director to promote the district to parents, among other things. They argued that such investments would improve educational outcomes and bring more students back to the district, which has struggled under declining enrollment and related decreases in per-pupil state funding.
But commissioners are recommending that the district dedicate the extra money to ballooning retiree health insurance costs.
While the commission can’t dictate how the district spends its money, district leaders acknowledge the significance of the school system’s $1.4 billion liability for other post-employment benefits. The board is planning to discuss the issue at its June 10 workshop.
3. The district already has approved $125 million worth of cuts for next year.
To balance its budget, the Board of Education voted in April to eliminate 482 positions and outsource services such as school maintenance. At the same time, the district will keep the majority of its 8,000 teachers, who will receive step pay increases, and invest another $7 million in school turnaround efforts. The district also has closed three schools and is moving students out of three others that are being taken over by the state due to low test scores. To stave off more cuts, it will pull $25 million from its savings account.
The district is responding to significant changes in the county’s educational landscape in recent years. In 2013, the former Shelby County Schools merged with the former Memphis City Schools after a funding dispute — then fractured with the creation of six municipal districts in the county’s suburbs. The state also took control of 15 underperforming schools resulting in the loss of thousands of students, while per-pupil funding has remained flat. Meanwhile, costs associated with educating the county’s students — most of whom are poor and academically struggling — continue to climb.
The municipal districts — smaller and just a year old — also struggled financially this year after underestimating their upstart and operating costs and taxpayers’ willingness to pay for new buildings. Municipalities have responded by cutting back on cafeteria services and debating whether to build new schools as originally planned.
4. The county is increasingly shouldering the cost of K-12 education to offset perceived underfunding by the state.
About one-fourth of the district’s funding comes from the county, with the state providing most of the rest.
County Commission spent almost a third of its total revenue and 60 percent of its collected property tax revenue — about $381 million — on education this fiscal year, which ends June 30. Another 12 percent went toward capital debt accrued through new school construction in the suburbs during the 1990s. On average, the commission has provided the district with $2,800 per student, up 30 percent from 2005.
Meanwhile, state funding levels have generally stagnated, except for some additional money pushed through the state legislature this year by Gov. Bill Haslam, mostly earmarked for teacher pay increases.
At one budget hearing this spring, school administrators complained that the state is increasingly shifting significant education costs onto the county. District leaders in Knoxville, Chattanooga and Nashville also have asked their local funding bodies for more money this year, with Chattanooga’s Hamilton County seeking the biggest hike of 10 percent.
“What incentive does the state have to fully fund the (Basic Education Program) if we keep picking up their slack?” Commissioner David Reaves asked at one point. “We need to create a climate where there’s a burning need [for the state to fulfill its obligation].”
5. Shelby County Schools may take the state funding issue to court, and the county may join the lawsuit.
The Board of Education voted last week to hire an attorney to explore options to force the state to fully fund its BEP formula for funding public education.
District leaders say Shelby County Schools would net at least 103 million more state dollars annually under a fully funded BEP. As it is, the district is challenged to raise teacher pay, improve test scores and provide the innovations necessary to address gaps in student learning. Commissioners say they would consider backing such a lawsuit.
Hamilton County and six other small school districts in southeast Tennessee already have sued the state over the issue. The state’s attorneys have asked that their lawsuit be dismissed, arguing that it is based on a “profoundly flawed interpretation” of three successful previous lawsuits over BEP funding.