insights (2005-43)

Rx for Knox Schools

It may be premature to start counting chickens that haven’t hatched, but if recommended changes in the state’s complex formula for funding public schools get enacted, Knox County schools will be freed from the budget bind that’s been shackling them.

Last week’s recommendations of a key committee of the State Board of Education would increase state funding of Knox County schools by more than $18 million a year to a total of $141 million. That’s in addition to increases based on enrollment growth, teacher pay raises, and rising costs to which school systems would continue to be entitled under the ongoing workings of the funding formula. Those increases yielded Knox County schools a little over $4 million for the current fiscal year.

The recommended changes are still subject to approval by the full Board of Education, Gov. Phil Bredesen and ultimately the state Legislature. However, because they all adhere to a set of “guiding principals” enunciated by a gubernatorial task force two years ago, the Bredesen administration is believed to be favorably disposed toward them. And because all but a handful of the state’s 95 county school systems would benefit from the changes, the legislative prospects appear favorable as well.

Inequities in the present funding formula, known as the BEP, that the changes are intended to redress have been the subject of two previous columns. Because of the complexity of the workings of the BEP (which stands for Basic Education Program) to go over them again would take up all of the remaining space in a column that’s intended to address their import for Knox County.

Suffice it to say, in generalities, that the changes would: 1.) reallocate funds from municipal school systems to county systems; 2.) eliminate a cost-of-living differential that has primarily benefited three counties (Davidson, Shelby and Williamson) and reallocate that money toward increasing the share of teacher salaries covered by the state in all school systems; and 3.) further supplement funding for “at-risk” students and English language learners based on the numbers of them enrolled in each system.

The total cost of the package incorporating all those changes presented to the state board’s BEP Review Committee last week is $163 million. Of that, the two biggest gains by far would go to Hamilton County ($22 million) and Knox County ($18 million) which may seem like a disproportionate share of the total. But it needs to be borne in mind that Hamilton and Knox have been at the bottom of the heap in terms of state funding per student under the existing formula. Municipal school systems, which have been unduly favored, would stand to lose money under the revisions, as would Davidson, Sevier and Williamson Counties. But the package protects the losses by keeping their funding stable.

The rub is that the $163 million cost of the package is far more than the traffic will bear in the fiscal year ahead when viewed in conjunction with all the other claims on the state’s anticipated revenue growth. So, it’s contemplated that the BEP revisions would be phased in over perhaps four years. Even so, an increase of nearly $5 million a year in state funding is enough to lift the Knox County school system out of the budgetary trough in which it’s been mired.

That trough is a result of the fact that what the school system classifies as fixed-cost increases have been rising faster than revenue growth from the state and the fixed portion of Knox County property and sales taxes that are dedicated to schools. In the current fiscal year’s $320 million budget, for example, an $8 million increase in school revenues (half from the state, half from the county) was insufficient to cover an $11 million increase in fixed costs.

The components of this increase include: 1.) a local share that’s more than half of the cost of a state-mandated 2 percent pay raise for teachers; 2) additional longevity pay raises to which the school system is contractually committed; 3.) added teaching positions needed to satisfy state-mandated teacher/pupil ratio requirements; 4.) an increase in debt service as more new schools get built; and 5.) increases in utility and fuel costs.

To balance its budget, the school board had to make to painful cuts in discretionary expenses. For the first time in recent memory, the school system’s 3,000 or so non-instructional personnel went without a base-pay raise, whereas the rest of the county’s employees got a 2 percent base raise. Nor is there anything in the school budget to cover a proportionate share of higher health insurance premiums that will take effect in January. And, after much wailing and gnashing of teeth, the school board eliminated a number of teaching assistant, secretarial and instructional support positions.

A projection for the fiscal year ahead foresees another $5 million shortfall staring the school board even more ominously in the face.  So the BEP reallocations and supplements now in the works could come just in time to stave off a debacle.

Further brightening the outlook is the prospect for a big increase in funding for a Great Schools Partnership established last year at County Mayor Mike Ragsdale’s instigation. He sees it as a way to route county funds to schools for designated purposes in circumvention of the school board’s statutory authority to decide how public school funds get spent. Per a five-year partnership budget which Ragsdale, as co-chairman of its board, moved for approval, county funding is due to rise from $2.6 million this year to $8 million for the next two years and then to $16 million in 2008–09. This year’s money is mainly for birth-to-kindergarten, pre-school and kindergarten intervention programs for at-risk inner-city kids. But much of next year’s increase is to go for piloting a teacher incentive pay program at 17 inner-city schools, based on their performance. The increase to $16 million would extend the incentive-pay program system-wide.

When asked how these increases will be funded, the county’s finance director, John Werner, says, “The mayor will be looking at local funding, and we also anticipate a lot of money coming from other sources, such as foundations and federal grants under the No Child Left Behind Act.” He goes on to say, “Certainly, with extra money coming from the state, it puts less pressure on us to fund.” But the Great Schools Partnership’s very existence was predicated on a commitment of local funds.

Ragsdale’s ability to fulfill that commitment could well be the defining moment of his tenure as county mayor.

© 2005 MetroPulse. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments » 0

Be the first to post a comment!

Share your thoughts

Comments are the sole responsibility of the person posting them. You agree not to post comments that are off topic, defamatory, obscene, abusive, threatening or an invasion of privacy. Violators may be banned. Click here for our full user agreement.

Comments can be shared on Facebook and Yahoo!. Add both options by connecting your profiles.