Memphis City Council chairman Myron Lowery interrupts Mayor A C Wharton during a news conference Wednesday to say, “I’m not going to let the mayor take the blame for this,” regarding the funding dispute with city schools that may delay the new term.
The city of Memphis sent Memphis City Schools $3 million Wednesday as part of the $8 million it owes the school district from the school year that just ended.
A day earlier, MCS board members voted to delay indefinitely the start of the next school year until it gets $55 million from the city on the upcoming year’s school bill. The funding is less than 10 percent of the school district’s overall budget.
The school board’s decision to delay the opening shocked city leaders, who say the city traditionally pays the money it owes to schools after Sept. 1 when taxes are collected.
Mayor A C Wharton said during a news conference at City Hall on Wednesday that the city doesn’t yet have $55 million for this year.
“I want to dispel the image being projected that we have the money hidden away somewhere,” said Wharton. “That is revenue projected to come in, but we have not got it yet. We don’t have the funds until they come in. That’s all it is.”
Wharton said the city cannot pay money it has not received.
But, the mayor said, “we’re going to do what’s necessary to make sure the children are in school on time and to get the teachers back in school on time. If they don’t, it won’t be the fault of the city of Memphis.”
City Councilman Shea Flinn, chairman of the Budget Committee, said the school board’s decision to keep schools closed appears to be driven by doubts the district’s officials have about whether the city will pay the school system.
“They just don’t trust us to pay them,” said Flinn. “We were blindsided.”
Flinn pointed out that the council and Wharton adopted drastic measures — including a tax increase, layoffs and salary and service reductions — in part to fund the schools.
School board member Tomeka Hart said the vote to delay school likely would not have happened if the City Council had put aside what it cut from schools in 2008 instead of giving it away in raises and tax cuts.
“I’ve always from the beginning understood the difficult situation they were in,” she said. “… We didn’t create this situation.”
Meanwhile, the council’s Education Committee is holding a special meeting at 4 p.m. today to receive the school district’s budget. The full council is expected to vote on the budget Aug. 2.
But some school leaders are still skeptical.
“Even if the city were to meet with us rather quickly and approve our budget, what assurance do we have that we could begin spending knowing we would get the full amount when we haven’t been able to count on the full amount for the past two years?” asked board member Betty Mallott.
School officials say they submitted their budget on April 15 for the council to review but heard nothing back until this week.
“As far as scheduling the budget to be heard, that has never been this late,” said MCS board president Martavius Jones.
In recent years, however, the city’s approval of the district’s budget has pushed past the start of school.
In 2010, the council heard the school system’s budget in September. In 2009, the council heard the district’s budget in August.
By law, the city has to approve the school district budget, although it has no say in how the money is spent.
Quietly, board members say the city has been slow to schedule a budget hearing this year in hopes that a federal judge overseeing the city-county school merger case would have ruled in its favor by now and possibly eliminating the city’s funding obligation.
Since Monday, council members and Wharton administration officials have used words like “disingenuous,” “mischaracterizing” and “misleading” to describe the school district’s stance.
Finance Director Roland McElrath said the city has never given the school system funding from property taxes before Sept. 1.
“From a cash-flow standpoint, we won’t have $55 million or $78 million by July 1 or even Aug. 1,” said McElrath. “The bulk of the funding flows to the schools after Sept. 1.”
Council attorney Allan Wade said in a memo to council members that the city is following the same schedule it has always followed with respect to school funding.
“In the past three years the city has funded MCS in the same manner and at the same time,” said Wade in the memo. “At no time in any of those years did MCS have any problem starting school on time.”
The school district uses the city’s $78 million annual contribution to start the school year, including helping cover its $45 million biweekly payroll until state funds start to flow in October.
County taxes, which comprise 39 percent of schools’ budget, don’t begin flowing until January — halfway into the school year.
Council chairman Myron Lowery blasted the school board for making a “major political power play” that needlessly worried teachers, students and parents.
“This is disingenuous of them to say we have to give them the money right now because we have never done that in the past,” said Lowery. “The council has appropriated every dollar the school system has asked for.”
“The reason they don’t have that money in hand is because we haven’t collected the taxes yet,” he said. “For them to say they are going to delay the opening of school because they don’t have 10 percent of their billion-dollar budget is ridiculous.”
But the fact that the school funding is being paid with taxes that are becoming increasingly delinquent is a concern for school board members.
“I think everybody has to be worried about that,” said Mallott. “There are more foreclosures, more people not paying their house notes and more people not paying their taxes.”
That is all the more reason, she said, why the school board cannot assume the city will make good on the money it has budgeted for the schools. A new state law saying school districts must give charter schools their funding in 10 equal payments illustrates her point, she said.
“It’s the metaphor for everything else. We’re paying in advance as if we are going to get full funding.”
The city of Memphis owes Memphis City Schools more than $151 million as part of its maintenance of effort requirement for funding schools. Here’s a breakdown of what the city has paid MCS and what is owed:
2008-09: City paid $24.9 million, owes $59.8 million
2009-10: City paid $73.8 million, owes $4.4 million
2010-11: City paid $69.4 million, owes $8.8 million
2011-12: City owes $78.3 million for upcoming school year
- Memphis City Schools board to discuss funding deal today
- Expenses mount for new unified school board
- Shelby County Commission holds budget retreat on Saturday
- Memphis City Schools board sorts 14 charter school applicants
- EVSC avoids ‘painful’ cuts with creative budgeting