The school systemâs justification for more county revenue is this: They argue that recurring costs have risen faster than recurring revenues, federal COVID money is gone, state funding did not increase enough, required teacher pay and benefit costs are rising, textbook and technology replacement costs are coming due, special education and contracted services are more expensive, and the district has already been using fund balance to cover operations.
Their argument is that fund balance is being used to cover ongoing operations, and that cannot continue indefinitely.
You may not have time to watch the 3 hour special School Board meeting from Wednesday but you would do well to read through this outline of the meeting. It will take 5-10 minutes.
đ The board appears to be discussing increasing the school systemâs share of the county property-tax pennies from about 19.55% to 25.15%, which was described in the meeting as roughly equivalent to 13 cents.
The county should not reward an unsustainable budget with more recurring money and no reform plan.
If the full increase passes, it buys time but does not solve the problem. The transcript itself indicates the increase would only slow the deficit, not eliminate it. That means taxpayers should expect the school system to return to the well in a year or two asking for more money, because the underlying spending problem will still be there.
If a partial increase passes, the same thing happens, only sooner. The school system will be able to say, âWe told you that was not enough,â and use the continued shortfall as justification for another increase. In both cases, the county gives more money, the Maintenance of Effort floor may rise, and the real structural problem remains untouched.
That is how spending creep happens. Each increase is presented as necessary, temporary, or unavoidable. Then, a few years later, the same problem returns, often with different people in office, different board members, and a public that has forgotten the details of the last request. The baseline keeps moving up, but the discipline never arrives.
The only path that forces real accountability is to deny the increase and require the school system to reduce spending internally.
In the private sector, a 10% cut is not unusual when an organizationâs spending is out of line with revenue. The school system should begin by reviewing part-time positions, non-certified staff, assistants, interventionists, facilitators, support roles, and other positions outside the core classroom teacher role. Required services should be protected, but every optional or expanded position should be justified.
If the school board makes a serious good-faith effort to control recurring costs, the county can then consider helping with capital projects as funds allow. But taxpayers should not be asked to permanently raise the school funding floor before the school system proves it can control its own operating budget.
Contact your county commissioner and let them know where you stand on the school budget proposal. Whether you support it, oppose it, or want more answers first, they need to hear from citizens before decisions are made. Also, please show up to the upcoming budget meetings and county commission meetings. These decisions affect taxes, schools, roads, public safety, and the long-term financial future of the county. Donât wait until after the vote to get involved.
This should be approved at a meeting of the School Board on Monday and then will go before the County Commissioners for discussion later this month. I believe that will be đď¸ May 7th (next Thu) at 5:30 at the Justice Center.
The County Commissioners are already being aprised of this request as members of the School Board reach out to the commissioners and other influential county officials.
Disclaimer: I have done my best to summarize and explain a large amount of budget information accurately, but there may be mistakes or misunderstandings. This is a complex subject, and very few citizens are subject matter experts in school finance, county budgets, Maintenance of Effort, tax rates, and state funding formulas. If you see something that needs to be corrected, clarified, or better sourced, please let me know and I will update it. Ideally, this information would be easier for the public to access, understand, and verify directly from the county and school system.
Why is this happening? One of many reasons is the âESSER Cliffâ. This is an important term to know since it is referred to frequently.
The "ESSER Cliff": Many districts are currently hitting their fund balance to keep teachers or programs that were previously paid for by expiring federal ESSER grants. ESSER (Elementary and Secondary School Emergency Relief) refers to the approximately $190 billion in federal "one-time" stimulus funding provided to K-12 schools to address the impacts of the COVID-19 pandemic.
In school finance, "hitting the fund balance" means a school district is spending its "rainy day" savings account to cover its yearly operating costs. It indicates that the district's expenditures (what they spent) exceeded their revenue (what they brought in) for that fiscal year.
Some commissioners may have personal, family, employment, or community ties to the school system. That is not unusual in a small county, and it does not mean they cannot make a good decision, but citizens should recognize that school funding votes can be personally and politically difficult.
Maintenance of Effort is another important term to know, often called MOE, is the minimum amount of local funding that a county or city is legally required to provide to its school system from year to year.
Once local government increases recurring school funding, that higher amount usually becomes the new funding floor for future years. âď¸ That means the county generally cannot reduce local school funding below that new level unless very specific legal exceptions apply. This is why MOE is often described as creating a ratchet effect: it can go up more easily than it can come back down.
1. The âRatchet Effectâ
Once local funding is increased, that new amount becomes the legal baseline for the next year.
Even if the local economy weakens, revenue drops, or a major employer closes, the local government may still be legally barred from cutting school funding below the new MOE level.
Local officials fear locking in high spending during good years that they may not be able to afford during a recession.
2. Lack of Control Over Spending
Local funding bodies, such as county commissions, provide the money, but school boards decide how to spend it.
Commissioners may hesitate to increase the MOE floor because they cannot easily pull that money back later if they disagree with how the school district is managing its budget.
This creates tension between the body responsible for raising the money and the body responsible for spending it.
3. Property Tax Increases
School funding is usually one of the largest parts of a local government budget.
A significant increase in MOE often requires a property tax increase or prevents future tax relief.
Because the MOE increase is ongoing, the tax increase may need to be ongoing as well, which can be politically unpopular and financially difficult for residents.
4. The âESSER Cliffâ
As federal ESSER and COVID-related funds expire, school systems may ask local governments to replace those dollars with local tax revenue.
Local officials are hesitant because using local tax dollars to replace temporary federal grants can permanently raise the MOE.
That could commit the county to continue funding staff, programs, or services that were originally started or supported with temporary federal money.
5. Competing Local Needs
Every dollar locked into the school MOE is a dollar that cannot easily be shifted to other county departments in the future.
Officials worry that an ever-increasing school funding floor could eventually limit funding for other essential services, including:
- Law enforcement and jails
- Road repairs and infrastructure
- Fire and emergency services
- Solid waste
- County buildings and maintenance
- Emergency medical services
Increasing MOE may help the school system in the short term, but it creates a long-term obligation for local taxpayers.
That is why county officials may be cautious: they are not just deciding whether to give the schools more money this year. They may also be setting a new permanent minimum funding level for every year after that.
Sales tax revenue has increased greatly in recent years. You canât drive a mile without running into a delivery driver. All those home deliveries equate to big $$ for the schools.
The local option sales tax is an additional local sales tax charged on purchases inside a county or city. Counties and cities can levy it, but special school districts cannot. In Tennessee, state law requires that 50% of revenue generated by the countywide local option sales tax be used for education, with the remaining portion generally available for local government purposes.
Local option sales tax already provides schools with a significant stream of local revenue. That matters because before asking property taxpayers for more money, citizens should understand how much sales tax revenue the school system is already receiving, whether it has increased, and whether the current budget problem is caused by falling revenue or by spending growing faster than revenue.
Student enrollment is falling. When enrollment falls, state formula revenue may decline, but the countyâs local funding does not automatically fall in the same way. Under Tennesseeâs MOE rules, local funding generally has to be maintained, though there are enrollment-related exceptions and per-student tests. The practical concern is that declining enrollment does not necessarily produce an immediate matching decline in local school costs.
The # of students listed as having disabilities has not fallen to the same degree. TISA provides additional funding weights for certain student needs and services, such as special education, dyslexia, English learners, concentrated poverty, and CTE. That makes accurate coding important, but it also means student need categories affect both the state funding calculation and the local funding conversation. You can learn more about school funding in TN here.
The proposed increase in property tax revenue for the schools appears to be a patch, not a solution. In the meeting, when asked whether the roughly 13-cent increase would take care of the full deficit, the answer was âNo.â It would only slow the deficit and make it manageable for more years.
That should concern taxpayers. If this new local funding becomes part of Maintenance of Effort, the county may be locking in a higher permanent funding floor without actually solving the structural budget problem. The transcript shows the district is still facing a large recurring deficit.
Before raising the school funding floor, the county should require a real sustainability plan. Otherwise, we may simply buy a year or two of breathing room before the school system is back asking taxpayers for more.
The following are the staff counts for East Hickman Elementary, which should have about 365 students. I encourage you to visit the the school websites and review the staffing at each school. Each school has itâs own website.
In theory, fewer students should eventually allow fewer staff and lower costs, but school costs do not always fall immediately or proportionally because many costs are fixed or legally required. Still, the public deserves to know whether staffing has been reduced in proportion to long-term enrollment decline.
The question is not simply whether the school system is meeting the stateâs class-size rules. The question is whether the total staffing model is sustainable.
A school can meet legal class-size ratios and still have a large number of additional adults on payroll through interventionists, facilitators, assistants, specialists, administrators, and support staff. Some of those positions may be necessary, especially in special education, but the public deserves to know which positions are required, which are optional, and what each category costs.
Before asking taxpayers for more recurring money, the school system should provide a school-by-school staffing report showing how many adults are assigned per student and how that has changed over time and the total cost including benefits and tax liabilities for each group.
The following is salary data that is publicly available for 2022 only includes salary, not medical costs, social security, retirement and other costs, and of course it is higher now. Given the fund balance draws, the continuing operating deficit, and the admission that the proposed increase would only slow the deficit rather than solve it, I believe we are on an unsustainable path.
The proposed revenue increase does not appear to include capital projects. In the meeting, the board acknowledged that they had only been discussing the operating budget and that capital projects were not in the budget. Yet they also discussed needs like tennis courts, floors, drainage, bleachers, and paving. đž The tennis courts alone had full resurfacing quotes of about $300,000 each.
That means the county could increase recurring school revenue and still face additional capital requests later. Citizens need to see the operating deficit and the capital-project list separately before any tax increase is approved. The county is often asked to come in later and pay for these expensive capital projects in order to keep from increasing the MOE.
What Should Be Done Instead?
In my opinion, the request to increase recurring school funding should be denied outright at this time.
The transcript makes clear that the proposed increase does not solve the budget problem. It only slows the deficit. If the county increases recurring funding now, it risks raising the Maintenance of Effort floor while still leaving the underlying spending problem unresolved. That is not a solution. It is a temporary patch.
The school system needs to be forced to bring its costs back under control. County commissioners do not directly manage the school systemâs spending decisions. The school board does. Because of that, the only real way to restore discipline is to put the responsibility back on the school system and require them to make the hard choices before asking taxpayers for more money.
Here are several areas that should be considered.
1. Deny the request for additional recurring revenue
The county should not increase the school systemâs recurring funding until the school board presents a serious sustainability plan. That plan should show how the district intends to control costs, reduce the deficit, protect fund balance, and avoid coming back for more money again next year or the year after.
2. Consider free or open-source curriculum options
Before replenishing expensive textbooks, the school system should review whether high-quality free, low-cost, or open-source curriculum materials could meet some instructional needs. Textbook adoption cycles are extremely expensive, and many citizens reasonably question whether new editions provide enough real educational value to justify the cost.
3. Reconsider the Chromebook replacement cycle
The district should not treat Chromebook replacement as an automatic recurring expense. There does not appear to be clear national evidence that Chromebooks, by themselves, significantly improve educational outcomes. If the school system wants taxpayers to keep funding one-to-one devices, it should provide local evidence that the devices are improving student learning enough to justify the cost.
4. Reduce non-classroom and non-certified support staffing where possible
Personnel is the largest part of the school budget. The school system should review the number of assistants, interventionists, facilitators, support staff, and other non-classroom roles to determine which positions are legally required, which are grant-funded, which directly affect student learning, and which can be reduced over time through attrition.
This does not mean cutting needed special education services or legally required supports. But it does mean the public deserves a clear explanation of how many adults are employed per student, what each category costs, and whether current staffing levels are sustainable.
5. Stop approving non-essential trips and activities during a budget crisis
The board should stop approving so many funding requests for extracurricular trips and optional activities that are not necessary or part of the core educational program. These expenses may be worthwhile in better financial times, but when the district is preparing to ask taxpayers for more money, every optional expense should be questioned.
6. Review employee medical benefits
The school system should review its medical benefit structure and compare it with what employees typically receive in private-sector jobs and other local government positions. If benefits are significantly more generous than what taxpayers themselves receive in comparable employment, that should be part of the budget discussion.
This does not mean employees should be treated unfairly. But benefits are a major recurring cost, and recurring costs are exactly what created the current problem.
The county should not raise taxes or increase the school systemâs Maintenance of Effort floor until the school board proves that it has done everything reasonable to control spending.
Taxpayers should not be asked to permanently fund a temporary patch. The school system needs a real plan to become financially sustainable, not simply a larger revenue stream that delays the next budget crisis.