State's answer

Tennessee affirms its school funding formula in response to lawsuit over Memphis schools

PHOTO: Marta W. Aldrich
Lawmakers reconvene the 110th Tennessee General Assembly on Tuesday at the State Capitol in Nashville.

In its first response to a funding lawsuit filed last year by Shelby County Schools, the state is denying that its funding model is the cause of financial struggles faced by Tennessee’s largest school district.

And while agreeing that the state is responsible for maintaining and supporting a public school system “that affords substantially equal educational opportunities to all students in Tennessee,” the state says its existing funding formula, known as the Basic Education Plan, or BEP, meets that requirement.

The 25-page response was filed last Friday afternoon in Davidson County Chancery Court, marking the next step in a legal process expected to take years.

The Shelby County lawsuit, filed last August by the district’s school board, charged that the state not only does not adequately fund school operations, but that the state does not fully fund its own formula. The formula, it charges, “fails to take into account the actual costs of funding an education,” especially for the overwhelmingly impoverished student population in Memphis. The suit details how its funding level impacts student achievement and district operations including school closures, class sizes, student services such as guidance counselors and nurses, and even community engagement efforts.

In its response, the state affirmed its funding model at every front and cited the district’s flexibility to spend the money provided. The response does not include specific defenses of the state’s funding model, only saying it provides the money.

State officials named in the district’s funding lawsuit “deny that their actions ‘forced’ the District to eliminate any programs.”

“The District has considerable discretion in deciding how to allocate funds,” the response says. “… Education funding affects the educational opportunities that are available to students, but deny any conclusory opinions regarding the causal effect of money on educational outcomes.”

The state is now facing several school funding lawsuits. Last year, Chattanooga-based Hamilton County Schools spearheaded the first lawsuit with six surrounding rural districts. And last month, the school board for Metro Nashville Public Schools voted to sue the state too, after learning that the district will receive less state money than expected for its growing population of English language learners.

The lawsuits are the latest legal challenges to Tennesee’s system for funding public education. In 1988, 77 small school systems successfully sued the state, claiming its funding formula — known as the Tennessee Foundation Program — was inequitable. The ruling in 1993 by the Tennessee Supreme Court forced the state to change its funding formula, and subsequent legal challenges led to more revisions over the next decade.

Earlier this year, Shelby County Schools hired the Memphis-based law firm that won the 1993 ruling.

Gov. Bill Haslam and Education Commissioner Candice McQueen have expressed disappointment that districts are taking legal action. They point out that the Haslam administration has worked with the legislature to provide more than $730 million in new funding for K-12 education, including $220 million in new funding next school year — a record investment.

But while generally giving the governor high marks for his efforts, district and Shelby County government leaders have argued that the state’s funding mechanism is broken and that the state’s system has gradually shifted the cost of education to local governments.

Payday coming soon

Pension paybacks for Detroit district employees may show up in March  

Thousands of Detroit district school employees may reap the benefits of a lawsuit over pension funding as soon as March.

School employees who worked for Detroit’s main district between 2010 and 2011 can expect refund checks in their mailboxes soon, district leaders say, but making sure the money ends up in the right place will be difficult.

The reimbursements are the outcome of a controversial move during Gov. Jennifer Granholm’s administration to withhold additional money from employees’ paychecks to pay for retiree health care benefits.

The Michigan Supreme Court upheld a ruling by the state Court of Appeals that the withdrawals were unconstitutional. As a result, the state is giving back $550 million to school employees with interest. The amount employees get depends on what they were paid at the time, either 1.5 or 3 percent of their salary.

While every district in the state is charged with handling the refunds, the Detroit district has a larger burden, tasked with processing 13,416 refunds totaling $28.9 million.

Some of the employees no longer work for the district and do not have an updated address on file, the district said, so employees have been asked to update their information by Feb. 28.

Another challenge: The district is trying to fill five positions in the financial department, the area charged with issuing the checks.

Jeremy Vidito, the district’s chief financial officer, said the state did not allocate extra dollars for additional support staff to help with the task, so the department is working overtime to process the checks.

“It’s prioritizing,” he said. “So there are items that we are going to push back to make sure this happens. It’s also … asking people to do more with less.”

Despite the challenges, the district said it plans to begin mailing checks starting the third week of March.


heated discussion

Aurora budget talks devolve into charter school spat

Aurora Public Schools board of directors and Superintendent Rico Munn, center.

Aurora isn’t facing major budget cuts, and school board members don’t have any significant disagreements with their superintendent’s budget priorities, but that didn’t stop a school board meeting this week from turning into a heated back and forth. At issue: the impact of charter schools, how new board members got elected, and what that says about what the community wants.

Four of the seven school board members were elected in November as part of a union-supported slate, sometimes speaking against charter schools. Many have been wondering what changes the new board will bring for the fifth largest district in the state, and Tuesday’s discussion shined a light on some rising tensions about different priorities.

The budget discussion was the last agenda item for the school board. District staff and Superintendent Rico Munn intended for the school board to provide guidance on whether their proposed budget priorities were the right ones.

Union-backed members who were sworn in in November pressed the superintendent and staff to talk about how charter schools would impact the district’s long-term finances.

“What I’ve always said is that charter schools have a negative impact on our financial model,” Munn said.

Veteran board member Dan Jorgensen asked Munn to clarify his statement.

“I don’t say necessarily it’s negative to the district, I say it’s negative to our financial model,” Munn said. “I just think that’s a fact.”

Then the conversation turned to the community. Board member Monica Colbert, one of the longer-serving board members, said the district is changing whether or not the board agrees because the community is demanding something different. The community “came out in droves” asking for the DSST charter school, she said.

Board President Marques Ivey, who was elected in November, disagreed.

“Not (to) this group that was voted in, I guess,” Ivey said. “I have to look at it in that way as well.”

Jorgensen supported Colbert’s argument.

“I think often times our perspective is also skewed by who we engage with, of course,” Jorgensen said. “But we need to be mindful we are here to represent our whole community.”

He added that a small fraction of Aurora’s registered voters voted in the school board election, saying, “there’s no mandate here at this table.”

When Ivey tried to dispute the numbers, Jorgensen continued.

“It’s not a debate,” he said. “That’s not the point. No one sits here based on — I mean there’s a lot of factors that contributed, like half a million dollars behind us or this or that.”

November’s election included large spending from the union and from pro-reform groups. The union slate of board members raised less money on their individual campaigns, but had the most outside help from union spending, totaling more than $225,000.

“I’m not going to let you get away with that shot,” Ivey said, stopping Jorgensen.

Then another board member stepped in to change the subject and ask for a word change on Munn’s list of budget priorities.

The district isn’t expecting to make significant budget cuts this coming school year, but in order to pay for some new directives the school board would like to see, district staff must find places to shrink the budget to make room.

The proposed priorities include being able to attract and retain staff, addressing inequalities, and funding work around social, emotional and behavioral needs. More specifically, one of the changes the district is studying is whether they can afford to create a centralized language office to make it easier for families and staff to access translation and interpretation help. It was a change several parents and community members showed up to the meeting to ask for.

Board members did not have major objections to the superintendent’s proposed priorities.

During the self-evaluation period at the end of the meeting, board member Kevin Cox said things aren’t as bad as they look.

“We’re building cohesion despite what may seem like heated discussions,” Cox said.

Things could be worse, he added – he’s heard of other groups getting in fist fights.

Correction: A quote in this story was changed to remove an expletive after Chalkbeat reviewed a higher quality audio recording of the meeting.