School funding

Five things to know about Shelby County Schools’ pared-down budget

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.

Indiana's 2018 legislative session

Indiana lawmakers OK up to $100 million to address funding shortage for schools

PHOTO: Scott Elliott

Indiana lawmakers agreed to dip into reserves to make up a shortfall to get public schools the money they were promised — and they’re trying to make sure it doesn’t happen again.

Both the House and Senate overwhelmingly voted to approve the final plan in House Bill 1001. The bill now heads to Gov. Eric Holcomb’s desk.

Rep. Tim Brown, a co-author of the bill and chairman of the House Ways & Means Committee, said it was necessary to take the uncommon step and have the state to use reserve funds to make up the gap, but in the next budget year making up that difference will be a priority. Brown said he, other lawmakers, and the Legislative Services Agency will work to make sure projections are more accurate going forward.

“Do procedures need to be changed?” Brown said. “We’re going to be asking those questions” during the next budget cycle.

Estimates on the size of the shortfall have ranged widely this year, beginning around $9 million and growing as new information and student counts came in. Projections from the Legislative Services Agency reported by the Indianapolis Star had the gap at $22 million this year and almost $60 million next year.

The final bill requires the state to transfer money from reserves if public school enrollment is higher than expected, as well as to make up any shortages for students with disabilities or students pursuing career and technical education. The state budget director would have to sign off first. Transfers from reserves are already allowed if more voucher students enroll in private schools than projected, or if state revenue is less than expected.

The budget shortfall, discovered late last year, resulted from miscalculations in how many students were expected to attend public schools over the next two years. Lawmakers proposed two bills to address the shortfall, and the House made it its highest legislative priority. The compromise bill would set aside up to $25 million for this year and up to $75 million next year. The money would be transferred from reserve funds to the state general fund and then distributed to districts.

The bill also takes into account two other programs that lawmakers think could be contributing to underestimated public school enrollment: virtual education programs and kids who repeat kindergarten.

District-based virtual education programs would be required to report to the state by October of each year on virtual program enrollment, total district enrollment, what grades the virtual students are in, where they live, and how much of their day is spent in a virtual learning program. These programs, unlike virtual charter schools, are not separate schools, so it can be hard for state officials and the public to know they even exist.

The report will help lawmakers understand how the programs are growing and how much they might cost, but it won’t include information about whether students in the programs are learning or graduating. Virtual charter schools in the state have typically posted poor academic results, and Holcomb has called for more information and action, though legislative efforts have failed.

Finally, the bill changes how kindergarteners are counted for state funding. The state changed the cut-off age for kindergarten to 5 years old by Aug. 1 — if students are younger than that, they can still enroll, but the district won’t receive state dollars for them. Some districts were allowing 4-year-olds to enroll in kindergarten early, Sen. Ryan Mishler said earlier this month. Then those same students would enroll in kindergarten again the next year.

Despite increases passed last year to boost the total education budget, many school leaders have said they struggle to pay salaries and maintain buildings, which is why funding shortfalls — even small ones — matter. This year’s unexpected shortfall was particularly problematic because districts had already made plans based on the state budget.

Find all of Chalkbeat’s 2018 legislative coverage here.

let the games begin

Assembly pushes for $1.5 billion boost to education spending

PHOTO: Photo by Jonathan Fickies for UFT
UFT President Michael Mulgrew interviews New York State Assembly Speaker Carl Heastie.

In a tight budget year, New York State’s Democratic-led Assembly wants to increase education spending by $1.5 billion, officials announced late Monday night.

The proposed increase  which would bring total education spending to $27.1 billion  is significantly more than the governor’s suggested $769 million increase. Still, the amount is a slightly smaller boost than the Assembly backed last year, which is likely a reflection of a difficult fiscal situation faced by the state this year.

State officials are fighting against a budget deficit, a federal tax plan that could harm New York, and the threat of further federal cuts. The potential lack of funding could be the only sticking point in an otherwise quiet budget year for education matters.

As part of its education agenda, the Assembly backed a number of programs it has in the past. The plan supports the My Brother’s Keeper initiative, which is designed to help boys and young men of color reach their potential, and “community schools,” which act as service hubs that provide healthcare and afterschool programs.

The release of this plan kicks off the final stretch of the state’s budget process. The governor has already outlined his proposals and the Senate will likely follow soon, setting up the state’s annual last-minute haggling.

The budget is due by April 1, but could always be resolved later similar to last year.