Balanced budget

Budget is set, finally, for Memphis schools; now the spending begins

PHOTO: Micaela Watts
From left: Board Chairwoman Teresa Jones, Superintendent Dorsey Hopson and board member Scott McCormick

On the eve of its new fiscal year, leaders for Shelby County Schools ironed out the final details of the district’s $959 million budget, preparing to give most of its teachers a 3 percent raise and restoring funding for positions deemed critical for continued academic progress.

The school board approved its operations budget for 2016-17 on Thursday after pulling $3.5 million from its reserve fund to help balance its spending plan for academic and staffing needs.

The remaining difference came from from lowering anticipated unemployment benefits, increasing anticipated sales tax revenue, and closing two more high schools — Carver and Northside — approved by the school board in recent weeks.

That covers the last of a shortfall that at one time stood at $86 million and has been whittled down over five months, culminating on Wednesday when Shelby County commissioners agreed to increase funding to the district by $22 million.

The $959 million budget is $30 million less than the district spent this year, but Superintendent Dorsey Hopson said the final tally avoids the worst cuts initially proposed.

With the County Commission’s vote this week to significantly increase funding for local schools, the district restored funding for 12 guidance counselors, reading and math specialists, and additional staff to absorb students from the closed schools. Also off the chopping block now is Hope Academy, a program for students in juvenile detention that represented one of the least expensive yet high-impact cuts proposed by Hopson’s administration. The program educates about 900 students per year for about $625,000.

As the new fiscal year begins on Friday, Hopson said the biggest investments will go to literacy, technology and small-scale replications of program successes achieved through the Innovation Zone, the district’s turnaround program for low-performing schools in the state’s bottom 5 percent.

“We’re looking to extract things we’ve done well and see if we can scale some of those things,” he said.

One of those initiatives is the Empowerment Zone, anchored by Whitehaven High School and seasoned principal Vincent Hunter. Several of the schools in Whitehaven’s feeder pattern are in the bottom 10 percent of schools statewide and on the cusp of being eligible for state intervention. The effort will include some teacher signing bonuses and more sharing of best practices among the schools.

With the state-run Achievement School District taking a hiatus from adding schools to its turnaround initiative, Hopson said the relative stability in enrollment will reduce the likelihood of another large budget deficit next year.

Top teachers will enjoy a long-sought 3 percent raise through a $13 million investment, even while union leaders lament the performance scale that the increase is based on.

In the upcoming year, the district also will pilot a new funding model to present for next year’s budget known as “student-based budgeting.” The approach is designed to provide more equitable funding across the district, which is Tennessee’s largest and poorest.

Student-based budgeting shifts from allocating money to schools based on a flat per-student rate toward building budgets that allocate more to students with higher needs. It also gives principals more autonomy on how to spend the money.

Also on the horizon, the district will take a hard look at how to get the right number of facilities for its students in the face of declining enrollment. Hopson repeatedly has said the district has 27,000 more seats than students to fill them, which will lead to more school closures in the coming years. A facilities study is expected in September.

School Finance

Big blow to Indianapolis Public Schools’ bid for tax increase: Realtors aren’t sold

PHOTO: Alan Petersime

A politically influential group representing real estate agents is taking the rare step of opposing Indianapolis Public Schools’ $725 million proposal to raise property taxes to increase school funding.

The opposition deals a harsh blow to the referendums, which have faced criticism and received little public support — driving the district to downsize the request earlier this week.

“Most importantly, we are concerned that property owners have not been given enough detail or clarity on the individual impact,” said the statement from the MIBOR Realtor Association. “The recent change to the proposed dollar amount only elicits more concern with IPS moving forward with their short timeline.”

The association opposes the request because it would be burdensome for Indianapolis residents, CEO Shelley Specchio said. She also criticized the district for not providing clear enough information on how the tax increase would impact individual property owners and how it would be used in schools.

“It was a difficult decision — not something that we took lightly, because of course, we really value strong quality schools,” Specchio said. But “we felt that the tax increase would be burdensome to homeowners.”

The district did not immediately return a request for comment.

The real estate agents group has about 8,000 members in Central Indiana. It has been one of the largest local contributors to campaigns for seats on the Indianapolis Public Schools board, giving thousands of dollars in recent years to support at least four of the current board members.

This is the first time the group has opposed an appeal for more money from a school district, said Chris Pryor, vice president of government and community relations. It has not taken a position on any Marion County school funding referendums, he said. But it has supported raising taxes for schools in other places, such as Anderson, and donated money to the campaigns.

Other influential groups, such as the Indianapolis Chamber of Commerce, have not yet taken positions on the referendums. Many community leaders agree that the district needs more funding, but they have raised concerns about the size of the request.

The opposition from the real estate industry group is a significant blow for the district because there has been virtually no campaign in support of the measures so far, said Ed Delaney, a Democratic state representative who lives in the district. The association is the first civic organization to take a position.

“I’m sorry that an organization like that, which has shown an interest in our community, would feel that they had to take this position,” Delaney said. “I’m saddened that we’ve come to this.”

Just two days ago, the school board responded to community concern by cutting its request from nearly $1 billion to about $725 million over eight years in a bid to win political support. The two measures, which will go before voters in May, would raise money for expenses such as teacher pay, special education services, and building improvements.

If the referendums pass, the tax increase for homeowners would be $0.58 per $100 of assessed value. For taxpayers with houses at the district’s median value — $123,500 — the new plan would increase property taxes by $23.24 per month.

School Finance

Teacher raises would survive $211 million cut from Indianapolis Public Schools funding request

PHOTO: Scott Elliott

Indianapolis’ largest school district cut about $211 million Tuesday from its request for extra funding, in a bid to win public support for the proposal.

That lower price tag comes with tradeoffs, district officials said. Even if voters approve the new plan, the district would dip into its cash reserves, put off building maintenance, and ditch expanded transportation plans, such as additional busing for students who move partway through the school year.

The new request also reduces how much the district would raise to pay for services for students with disabilities, though it was initially unclear by how much and how that could affect students.

But district officials said they still expected to be able to give raises to teachers if the referendums pass.

The scaled-back request would raise about $725 million over eight years, significantly less than the initial proposal of nearly $1 billion.

The board voted 6-0 in favor of reducing the amount of money the district is seeking, backing off the number members approved two months ago.

Board member Kelly Bentley said many school districts around the state have asked taxpayers for more money.

“We all own property in IPS. None of us want to see our taxes go up,” she said. But, she added, “I am confident that it’s money that’s going to be well spent, and it’s money that is necessary.”

Instead of pulling back spending on teachers and school staff, the district is making the new plan work by adjusting revenue expectations, said Chief Financial Manager Weston Young. The proposal is built on the assumption that state revenue will increase 1 percent each year, and the district will no longer hold as much money in reserves, he said.

“We are still committed to our students through our compensation for teachers and the wraparound services that serve those kids,” Young said.

Reducing the request could help build enthusiasm for the tax increase, which has not gotten much vocal community support. Instead, the referendums have been met with some concern over the size of the ask. But even though they have pared down their plan, district leaders will still need to persuade voters in May to raise their own taxes.

Superintendent Lewis Ferebee said the new plan is a balancing act between what taxpayers can bear and the cost of providing the level of service that families need. Ultimately, he said, the tax increase would pay dividends by helping the district prepare students for college and careers.

“This is one of those situations where you pay now or you pay later,” he said.

The move cut the potential tax increase for homeowners in IPS to $0.58 per $100 of assessed value, down from the initial proposal of $0.73. For taxpayers with houses at the district’s median value — $123,500 — the new plan would increase property taxes by $17.70 per month for operating expenses and $5.54 per month for building improvements, according to the district.

The referendum the board reduced would pay for operating expenses, such as teacher salaries, and under the new request, it would raise about $66 million per year for eight years. That’s down from the initial request of about $92 million per year.

Under the new plan, about $49 million of the money raised each year would go to staff pay, while the remaining $17 million would help pay for services and supplies, regular maintenance, and transportation.

A second measure, which was not changed, would pay for about $200 million in improvements to buildings, primarily safety updates such as new lighting and door security. Both measures are expected to go before voters in May.