Appeals Court Says Memphis Legally Bound to Fully Fund School District

January 14, 2010

One day after the Memphis City Council declined to fund Memphi s City Schools as it had promised, the Tennessee Court of Appeals ruled Wednesday that the city has a legal duty to fully fund the school district.

"Reading the case law together with the statutes and the city’s charter, we believe the General Assembly has created a system in Memphis whereby both Shelby County and the city are required to fund the city schools," said Judge David R. Farmer in his opinion for the court.

 
Council chairman Harold Collins said the council would appeal the ruling to the state Supreme Court.

"This opinion is a blow to the taxpayers of Memphis, who must continue to shoulder a disproportionate tax burden for education in Shelby County," Collins said.

Under the ruling, the city is responsible for the funding it cut last year, the funding it promised this year and the funding for the next fiscal year, which begins July 1. That amount could approach $150 million — about one-quarter of the city’s $601 million operating budget — while the city is facing a $5million budget shortfall.

School board attorney Dorsey Hopson expects the board will work with the city on a payback plan, including "ways to lessen the burden on the taxpayers."

"These board members represent the very same constituents the City Council represents. They are not interested in sticking it to the taxpayers," Hopson said.

Less than 24 hours before the court announced its decision, the City Council voted 8-3 to delay paying the $50 million that it promised the school system for the current year until there is a "final resolution" to the litigation.

Before learning of the court ruling Wednesday, Supt. Kriner Cash and advisers spent much of the day trying to pare $50 million from a budget year more than half over.

"I felt somewhat embarrassed for the city (Tuesday) to have our leaders even contemplate not doing anything in the interim," Cash said. "Either they don’t understand the implications … or there has to be some other more pernicious explanation."

The blow, he said, was more crushing given that the Bill & Melinda Gates Foundation put the district in the national spotlight in November by awarding it $90 million to improve teacher effectiveness.

"Here are leading philanthropists, leading educators and leading people around the world investing in Memphis and yet our own city basically made a decision that we are going to dis-invest right now," Cash said.

Memphians, who make up about 74 percent of Shelby County’s population of nearly 907,000, pay twice for education: Once in county property taxes, which fund city and county school systems, and again in city property taxes, which fund city schools.

In an effort to shift funding of MCS to Shelby County, in 2008, the council reduced its contribution to the district. MCS sued and a judge ordered the city to pay the district. The appellate court heard the case in October.

Like Shelby County Chancellor Kenny Armstrong, the Court of Appeals knocked down the city’s claims that the state school-funding plan required Shelby County to be the sole funding source for education.

"I didn’t create this situation, but I certainly won’t run from it," Mayor A C Wharton said Wednesday. "And I will work to find solutions for it in a non-political manner."