School Finance

Nashville Schools next to consider legal challenge over state funding

PHOTO: MNPS
Board members for Metro Nashville Public Schools

Addressing chronic state underfunding of Tennessee public education, the director of Metro Nashville Public Schools (MNPS) is urging more patience and cooperation with Gov. Bill Haslam’s administration amid a growing chorus of urban school leaders exploring whether to take their case to court.

While affirming that the state’s Basic Education Program (BEP) is not being adequately funded, MNPS Director Jesse Register said Monday that litigation is the “wrong way” to effectively advocate for additional money.

“The threat of litigation should only be considered as the last resort, and I do not believe we are at that point in Tennessee,” Register wrote in a letter to the district’s school board, Metro Council, Nashville Mayor Karl Dean, the governor’s administration, and school superintendents in Shelby, Knox and Hamilton counties.

Nashville’s board is scheduled Tuesday to discuss whether to join Tennessee’s three other urban districts that passed resolutions in February to pursue legal discussions. But Register cautioned that now is the time for cooperation, not litigation.

Jesse Register
Jesse Register

“The Governor has this year demonstrated good faith efforts toward increased funding for our students,” wrote Register, noting that the governor’s proposed budget would increase teacher pay and maintain current BEP funding levels. He also applauded Haslam’s help in bringing $60 million in federal funding to Davidson and Shelby counties for early childhood education.

Chris Caldwell, the Shelby County Schools board member who urged his district to pursue legal options, said neither Haslam nor any individual legislator can guarantee anything to local school districts, however.

“I would ask Mr. Register this question: What has the governor or legislature done in the last two years to make him think working with them can yield any results?” Caldwell told Chalkbeat. “We’re 45th in per-pupil spending in the country, and it’s beyond the time for empty promises. These kids don’t get these years back.”

Caldwell said Shelby County’s exploration of a lawsuit would not be impacted by the stance of Nashville’s school district. Shelby County’s board is to discuss selection of an attorney in the matter Wednesday during a specially called meeting.

Under the governor’s proposed budget, Caldwell said, SCS would receive between $40 million and $50 million, well short of the $100 million needed to fully fund the BEP, pay teacher insurance for 12 months, and fund teacher salaries at the state level.

Caldwell also said that the state’s investment in education is not a question of having the money, but of setting priorities. “To fully fund schools for all districts in Tennessee would only be about 5 percent of the full state budget,” Caldwell said. “Where else in the state budget can we impact so many things – poverty, having an educated workforce, increasing tax revenues, reducing crime?”

Gov. Bill Haslam delivers his State of the State address.
PHOTO: TN.gov
Gov. Bill Haslam delivers his State of the State address.

Haslam spokesman Dave Smith said the governor has made education funding a priority during his time in office. The governor’s proposed budget for 2015-16 includes nearly $44 million to account for BEP growth and nearly $100 million to increase teacher salaries. In his State of the State address on Feb. 9, Haslam proclaimed: “While other states are cutting K-12 education, Tennessee continues to be one of the few states in the country to make significant investments.”

If some state school districts decide to take the matter to court, it won’t be the first time. In 1988, 77 small districts filed a lawsuit claiming that the state’s funding formula was inequitable. The Tennessee Supreme Court agreed and, out of that litigation, the BEP was implemented in 1992. In 2007, Gov. Phil Bredesen outlined a plan known as BEP 2.0 to increase the amount of state money to school systems, but an economic downturn dissuaded state officials from implementing it.

In 2013, concerns about BEP funding began to intensify when MNPS representatives discovered fundamental questions about the state’s funding formula.

“Other school boards around the state will tell you point blank that we wouldn’t be having this conversation if it wasn’t for Jesse Register and the Nashville school board,” said MNPS board member Will Pinkston.

“He early on flagged the information and shared it with the other districts around the state. The idea that he’s now back-peddling in a pretty extraordinary way is interesting,” said Pinkston, calling Register’s latest recommendation “an amazing flip-flop.”

Whatever the MNPS board decides, district advocates anticipate that leaders of other school systems will continue to explore their options.

“At this point, it’s all about gathering information,” said Robert Gowan, lobbyist for the Coalition of Large Area School Systems. “None of the districts that have voted so far have voted to authorize litigation. All they’re talking about is gathering information and getting legal advice. They want to move forward thoughtfully and determine how best to proceed.”

Contact Marta W. Aldrich at maldrich@chalkbeat.org

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Petition Time

Try, try again: Latest attempt at school funding measure would raise $1.6 billion with income, corporate tax increases

Colorado voters could see a $1.6 billion tax increase for education on their November ballots.

Backers of a major school funding measure have been cleared to gather signatures by the Colorado Secretary of State’s Office. The measure – going by Great Schools, Thriving Communities – would increase the corporate tax rate and increase income taxes for people who earn more than $150,000 a year, as well as change how residential property is taxed for schools.

“Colorado schools are severely underfunded right now, and this initiative is a way we can ensure that every student has access to the supports they need for success,” said Susan Meeks, a spokeswoman for Great Education Colorado, one of the groups supporting the measure.

Colorado’s Taxpayer’s Bill of Rights requires that voters approve any tax increase, and voters have twice before rejected statewide school funding measures, most recently in 2013.

To get on the ballot this time, supporters need 98,492 valid voter signatures. Amendment 71, approved in 2016, requires that those signatures be gathered in every state Senate district in the state, imposing – by design – a logistical and financial hurdle on all constitutional amendments. (A federal judge has suggested that requirement might violate the U.S. Constitution, and it’s not clear right now whether it will remain in effect.)

The tax measure calls for:

  • Raising the corporate income tax rate from 4.63 percent to 6 percent.
  • Raising the income tax rate from a flat 4.63 percent to between 5 percent and 8.25 percent for people earning more than $150,000. The highest tax rate would be paid by people earning $500,000 or more.
  • Setting the residential property assessment rate at 7 percent for schools. That’s lower than it is now but higher than it is predicted to be in 2019 because current law has the unintended effect of gradually reducing the residential assessment rate.
  • Setting the non-residential property assessment rate at 24 percent, less than the current 29 percent.

According to a fiscal analysis by the state, the average taxpayer earning more than $150,000 would pay an additional $519 a year, while those earning less would be unaffected. The average corporate taxpayer would pay an additional $11,085 a year. The change in property taxes would vary considerably around the state, but based on the average statewide school levy, many property owners would pay $28 more on each $100,000 of actual value in 2019 than they otherwise would. Commercial property owners will see a decrease, and total property tax revenue collected by school districts would go down statewide.

If approved, the taxes would generate an estimated $1.6 billion that would go into a new “Quality Public Education Fund.” The vision is that this money would be distributed to schools in accordance with a new school finance formula backed by nearly all of the state’s superintendents and under consideration in the legislature this year.

The new funding formula, which would increase per-pupil funding in accordance with student characteristics like being gifted and talented or learning English as a second language, only goes into effect if voters approve the tax measure. If that plays out, no school district would lose money on the deal, and some would see significant increases in funding.

If lawmakers don’t pass a new funding formula, but voters approve the tax measure, schools would still get more money. The ballot measure calls for an increase to the base amount of per-pupil funding, plus extra money for students with particular needs, money for public preschool, and money for full-day kindergarten.

Full funding for kindergarten has been an elusive Holy Grail for education advocates in Colorado.

“Our measure is addressing the needs of the kids head on,” said Donald Anderson, one of the backers of the tax increase. “You can see where we’re raising this money and you can see where it’s going, and it’s very transparent in a way that voters will be able to get behind.”

Anderson is a stay-at-home father of two children in the Poudre School District in Fort Collins who has been active on school issues.

The ballot measure also contains a provision that requires the state to keep spending what it already does. That is, lawmakers can’t lean on this new money source and divert existing education spending to other needs.

Luke Ragland of the conservative education reform group Ready Colorado supports the idea of weighted student funding contained in the proposed new finance formula, but he doesn’t think Colorado’s education system needs a huge infusion of cash – if voters even go along with the idea.

“I don’t understand why the presumption is that spending more money will make things better,” he said. “Spending money on the same things won’t produce different outcomes.”

The education spending measure could be sharing space on a crowded ballot with a governor’s race, a transportation measure, and more.

The most recent attempt to raise money for schools – Amendment 66 in 2013 – was rejected by 65 percent of voters. That measure affected all taxpayers by imposing a 5 percent income tax rate on those earning up to $75,000 and a 5.9 percent rate on those earning more. It also involved a change to the funding formula, but one that caused some districts to lose money.

Is this a good time to try again for an education tax increase? Backers of the idea say there’s only one way to find out.

“We have one of the best economies in the nation right now, and it’s the perfect time to be investing in our students,” Meeks said.

School Finance

Big blow to Indianapolis Public Schools’ bid for tax increase: Realtors aren’t sold

PHOTO: Alan Petersime

A politically influential group representing real estate agents is taking the rare step of opposing Indianapolis Public Schools’ $725 million proposal to raise property taxes to increase school funding.

The opposition deals a harsh blow to the referendums, which the district downsized earlier this week in the face of criticism and little public support.

“Most importantly, we are concerned that property owners have not been given enough detail or clarity on the individual impact,” said the statement from the MIBOR Realtor Association. “The recent change to the proposed dollar amount only elicits more concern with IPS moving forward with their short timeline.”

 

The association opposes the request because it would be burdensome for Indianapolis residents, CEO Shelley Specchio said. She also criticized the district for not providing clear enough information on how the tax increase would impact individual property owners and how it would be used in schools.

“It was a difficult decision — not something that we took lightly, because of course, we really value strong quality schools,” Specchio said. But “we felt that the tax increase would be burdensome to homeowners.”

In a statement, chief of staff Ahmed Young said the district will continue working with the community.

“IPS is committed to being a good steward of taxpayer resources,” Young said. “We lowered the operating referendum ask on Tuesday as part of this commitment. We look forward to further collaboration with the community to advocate for our schools.”

The real estate agents group has about 8,000 members in Central Indiana. It has been one of the largest local contributors to campaigns for seats on the Indianapolis Public Schools board, giving thousands of dollars in recent years to support at least four of the current board members.

This is the first time the group has opposed an appeal for more money from a school district, said Chris Pryor, vice president of government and community relations. It has not taken a position on any Marion County school funding referendums, he said. But it has supported raising taxes for schools in other places, such as Anderson, and donated money to the campaigns.

Other influential groups, such as the Indianapolis Chamber of Commerce, have not yet taken positions on the referendums. Many community leaders agree that the district needs more funding, but they have raised concerns about the size of the request.

The opposition from the real estate industry group is a significant blow for the district because there has been virtually no campaign in support of the measures so far, said Ed Delaney, a Democratic state representative who lives in the district. The association is the first civic organization to take a position.

“I’m sorry that an organization like that, which has shown an interest in our community, would feel that they had to take this position,” Delaney said. “I’m saddened that we’ve come to this.”

Just two days ago, the school board responded to community concern by cutting its request from nearly $1 billion to about $725 million over eight years in a bid to win political support. The two measures, which will go before voters in May, would raise money for expenses such as teacher pay, special education services, and building improvements.

If the referendums pass, the tax increase for homeowners would be $0.58 per $100 of assessed value. For taxpayers with houses at the district’s median value — $123,500 — the new plan would increase property taxes by $23.24 per month.