This post is written by Jimmie Covington, veteran Memphis reporter with lengthy experience covering governmental, school, and demographic issues. He is a contributing writer with The Best Times, a monthly news magazine for active people 50 and older.
By Jimmie Covington
The election of a new county mayor and eight new members of the 13-member County Commission may have produced a good time to take a look at the anti-schools moves that county mayors and commissioners have carried out over the past 11 years.
It’s clear that since 2007 county mayors (A C Wharton and Mark Luttrell) with the support of County Commission members have capped the amount of county revenue schools receive for operations. Each year the revenue given to schools is limited to a specified amount listed in the county’s general fund budget.
That was a major change from past years when commissioners allocated revenue sources to schools – such as a specific part of the county’s property tax rate, the wheel tax and county government’s share of local sales tax revenue from unincorporated areas – and schools each year received all of the revenue produced by those taxes.
There was no change in the law or other requirements at the time which brought about this change. It was done because county officials wanted to do it.
They wanted to use that money for other purposes. They wanted to direct that money to debt service and perhaps some other expenses that fall under the county mayor’s administration.
Manipulated Financials
They will argue that the move was necessary to hold down county taxes. School officials and supporters might argue that limiting funding for schools across Memphis and the rest of the county has had a more negative impact than cutbacks in general county government would have had if county mayors and commissioners were dead set on keeping taxes low.
Regardless of where people stand on that issue, it is clear that capping the amount schools receive each year to budgeted amounts has through the years diverted millions of dollars of revenue to uses other than school operations. To carry out some of their plan, county officials had to manipulate financial figures.
At one point, the County Commission set a single property tax rate for both general government and schools so the commission could just appropriate an amount of property tax revenue for school operations.
However, an opinion from the state Attorney General’s Office halted that effort, and the commission had to come back and set a separate rate for schools.
And when they found later that state law requires that schools receive all of the revenue from the schools’ property tax rate, they devised a plan for the county trustee to hold back any portion of the property tax funds that exceeded the budgeted amount and use the money for schools in the following fiscal year.
The Missing Legal Opinion
No legal opinion was ever presented publicly that the trustee had the authority to hold back the funds. If school officials knew what was happening, they never publicly challenged the action. The daily and weekly news media in the city never reported on it.
A manipulation of funding continued during the setting of the county property tax rate this year.
During the past year, appeals from the 2017 property reappraisal program had a significantly smaller impact than Shelby County and Memphis officials had estimated when setting an appeals allowance as part of their 2017 tax rates.
As a result, state officials required county and city officials to calculate recapture rates and announce tax rate cuts to offset revenue from the appeals allowances that were too high. The county’s cut was five cents on the tax rate. (If they had wished, the county and city could have kept the old 2017 rates or increased them by advertising the recapture rates and holding a public hearing.)
County Mayor Mark Luttrell’s administration proposed and approved these changes in the county tax rate allocations: the education fund was cut from $1.99 to $1.94; the general fund was increased from $1.43 to $1.49, and the debt service was cut from 69 to 62 cents.
That resulted in an overall six-cent tax rate cut from $4.11 to $4.05.
The actual funding for schools was not cut since the county cannot reduce school funding from one year to the next. It seems likely that the school rate was cut to make it easier to keep a budget cap on school funding each year. (Remember all of the revenue from the schools’ portion of the county property tax rate must go to schools. All of the revenue from other tax sources allocated to schools does not have to go to schools.)
Questions for New Elected Officials
The news media never reported on why the schools’ rate was cut and the general government rate was increased. If it was ever discussed in commission meetings, it never got out to the public.
Will the newly elected officials recognize that the county mayor basically has a conflict of interest when it comes to recommending any reduction in school funding or in the school tax rate since he and his administration are in competition with schools for county funding?
And does it violate the county charter for the mayor to include a school funding proposal in the general fund budget and for him to make any proposal of a tax rate that includes school funding? The charter stipulates that the charter does not apply to schools or school funding for any purpose.
The County Commission has the sole authority to approve the county school system’s budget and set a tax rate for schools. Under state law, the tax rate revenue must be shared with the county’s municipal school districts. Thus, the suburban school districts also have a stake in this.
The newly elected officials have a lot to learn about county government and maybe one of the things is that the county mayor, under state law and the county charter, has no role when it comes to schools and school funding.
A C Wharton and Mark Luttrell never understood this.
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