Memphis schools seek tax hike; Supt. Cash fears funding loss

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In a year with drops in property values, Memphis City Schools is pushing for a 57-cent tax increase for schools to make up for money cut by the City Council last year and providing for other increases.

Without the added revenue, the schools can't submit a legal budget to the state and would lose state and federal funding, said Supt. Kriner Cash.

"We jeopardize operations Aug. 1, and we close and are broke on Oct. 3," Cash told council members Tuesday in a move to impress upon them how much the city's public schools need the money.

"We've done the analysis. That's what we need."

Of the current base tax rate of $4.04 per $100 of assessed value, city and county taxpayers now pay $2.02 for schools. The 28 percent increase would add $221 in new taxes to property valued at $150,000 and $177 for a home valued at $120,000.

School funding has long been a key issue in the area, but it hit a new level last year when the council abruptly cut $66 million from the city schools budget, which is largely funded by the county. The city has argued it is not obligated to fund the schools, even though it had routinely supplemented the school budget for years.

The school system had to trim staff and fund daily operations -- including $15 million in initiatives Cash is rolling out in his first year -- with $30 million from its reserves.

The city schools sued the city over the cut, hoping to force a ruling that would define the city's responsibility.

While closing arguments in the case are scheduled Feb. 9 in Chancery Court, there's no timeline for when the judge will rule. City Council leaders have said nothing about their plans to fund city schools this year.

As a result, Cash fears the same funding dilemma is heating up as governments head into budget season awash in a recession that has battered property values and tax bases.

With a $70 million shortfall between what the county said it will pay to fund the city schools and what the state requires, Cash is mincing few words, saying he is prepared to close schools.

"I'm ready to go on a campaign that gets this information out in a clear and unequivocal way," Cash told the board of education late Monday. "We do not have a solution for the 2009-10 year."

Cash sent the proposed funding rate to county school administrators last week, seeking input on it and a larger plan that eventually could allow the districts to unite for the purpose of securing taxing authority. As it stands, any tax increase would have to be approved by the County Commission.

After the fallout from the lawsuit last fall, elected state and local officials began meeting in an ad hoc education funding committee, trying to iron out which governmental body should be responsible for funding schools.

"The issue has always been, should it be the county commission or the two school boards?" said Cato Johnson, committee member. "Who should the single source be?"

Both districts are polishing a joint proposal arguing that the taxing authority rightfully belongs to them.

"The school systems feel like it's in their best interest to be able to control the tax rate," said Deidre Malone, chairwoman of the committee and county commission.

"They feel they are in a better position to be accountable to the people."

The committee is expected to hear the proposal, plus proposals from county commissioners Mike Ritz and Mike Carpenter, who argue that citizens are better served if the county retains the authority.

All three will be introduced to the public in a forum early next month.

"After the public has had a chance to hear them, the ad hoc committee will vote on the one we want to present to the legislature," Malone said.

Any move to change taxing authority must be approved by voters. Malone expects it will be a hard battle.