Memphis City Council to Vote on Funding for Schools
January 12, 2010
The City Council will vote today on a school funding proposal that will have major implications for taxpayers and Memphis City Schools.
After shooting down a 31-cent tax increase proposed by Mayor A C Wharton to fund the school system two weeks ago, the council will vote today on a plan to use a mix of reserves and budget cuts to fund the school district without a tax increase.
"I just think our tax rate is already much higher than any other community in Tennessee, so when you combine that with the recession, it’s just the wrong time to raise taxes," said councilman Jim Strickland.
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Strickland’s proposal calls for the city to give the schools $40 million — $30 million from reserves and $10 million it cuts from elsewhere in the city budget. Also, the city would "write down" — essentially forgive — $10 million it says the school system owes the city.
School board attorney Dorsey Hopson told the board Monday night that Strickland’s plan does not fulfill the city’s obligation. "The local government needs to give the school board a baseline amount, and that is $50 million," Hopson said.
It doesn’t matter, he said, that the difference now has been winnowed to $10 million. "If this passes, we are right back to where we were," Hopson said.
Wharton, who moved into the mayor’s office Oct. 26, inherited the school funding issue from the council and former Mayor Willie Herenton. He proposed closing the school funding gap by imposing a nearly 10 percent tax hike, coupled with taking $16 million from the city’s reserve fund.
"Let me be clear: The city must take a strong role in the education and welfare of its children," Wharton said last week during his state of the city address. "If that means at times I have to make tough fiscal choices or find myself in politically unpopular positions, so be it."
But the council, which controls the city’s purse strings, favored Strickland’s proposal, which is up for a final vote this afternoon.
"I think we have to be sensitive to what is going on in the real world for taxpayers," Strickland said. "Their incomes have not gone up 10 percent. In fact, many of their incomes have decreased."
Last year, the council approved $78.3 million in funding for the school district for the curren t fiscal year, with $28 million already committed from various sources.
That left a $50 million hole the city had to fill for schools, while facing a $5 million budget shortfall.
In many ways, the issue before the council today is the one it was faced with during the budget season: Raise taxes or make cuts to services and personnel to fund the city budget and the school district.
In June, after months of wrangling, the council approved a $601 million operating budget for the current fiscal year.
While the council cut Herenton’s proposed budget by roughly $16 million, several council members, expressing concerns about the state of the economy and education funding, said more expenses should have been trimmed.
And while cities and counties across the nation, including Shelby County government, were instituting cost-cutting measures such as layoffs and buyouts, Memphis did not pursue those measures, and even gave employees a 3 percent raise, which cost $11 million.
But last week, Wharton, who made deep cuts as mayor of county government, said the city would cut travel expenses, institute a hiring freeze, consolidate city divisions with overlapping functions and fill vacant positions only in public safety. Wharton is scheduled to present his cost-saving measure to the council Feb. 10.
"I like where he is going with his outline of cuts in the budget," said Strickland. "Those are all things we tried to get passed last year. Some of them were passed, but a lot of them were not."