new chapter

For the first time in years, Shelby County Schools will start its budget process without a shortfall

PHOTO: Ruma Kumar
Superintendent Dorsey Hopson visits classrooms and students at Snowden School in Memphis.

When it comes to providing enough money to keep Shelby County Schools afloat, board member Stephanie Love likens Tennessee’s largest school system to a ship that has been navigating life-threatening storms.

The beleaguered district has been battered by wave after wave of budgetary challenges: the massive merger of city and county schools in 2013; six municipalities pulling out to start their own school systems in 2014; yearly takeovers of Memphis schools by the state-run turnaround district; and annual closings of aging school buildings that have too many needs and too few students.

But this year, the wind-whipped ship appears to be sailing into calmer waters.

PHOTO: Laura Faith Kebede
Stephanie Love

“This will be one of the best budget years since the merger and demerger …,” Love said. “This year we are able to sit down and strategize.”

Indeed, when administrators roll out their proposed spending plan on Monday, the district will start the budget process in the black for the first time in years.

Superintendent Dorsey Hopson said the budget proposal will contain “unprecedented investments” for schools.

“After experiencing the largest school merger in history, we have stabilized our district and can shift our focus toward strategic investments in our schools,” Hopson said in a statement Friday. “Although we still believe that we are underfunded at the state level, we have worked diligently to maximize our limited resources.”

How Hopson and the school board will leverage the district’s newfound stability will be decided in the coming weeks as they target a budget vote for March 28.

The timeline for the process has been stepped up this year under Chief Financial Officer Lin Johnson, now starting his second budget season with Shelby County Schools. He and Hopson hope to present an approved budget in April to the Shelby County Board of Commissioners, which holds the purse strings for local public schools.

Teacher training, supports for failing schools, and adding school counselors and behavior specialists are among items on wish lists for leaders who are weary of storms and ready to make proactive investments.

The shift in thinking is a welcome change from last year, when Hopson kicked off the budget season facing an $86 million shortfall on the tails of $125 million in cuts the previous year.

After cutting positions, winning at $22 million funding boost from the county commission and dipping into reserves, the district crafted a $959 million budget for the current fiscal year, including a 3 percent raise for teachers. The ante up from from the county was a crucial win for local schools because the increase set a higher baseline for funding levels for years to come.

But lest anyone gets too giddy about this year’s prospects, board Chairman Chris Caldwell is quick to remind that the district still remains woefully underfunded.

PHOTO: Kayleigh Skinner
Board member Chris Caldwell and Superintendent Dorsey Hopson listen to a budget presentation in 2015.

“We may have a healthy fund balance, but in the bigger picture we don’t have healthy funding,” referring to the district’s funding lawsuit against the state. The suit, which is winding its way through the courts, charges the state with shortchanging Shelby County Schools by upwards of $100 million every year.

Still, the relative financial stability should open a fresh new conversation with county leaders about how Hopson and his team are doing to right the bloated district. Each year, county commissioners have asked Hopson to constrict its footprint. Last fall, the superintendent responded by unveiling a proposal to close, build and consolidate five schools into three.

Steve Basar, who chairs the commission’s finance committee, says it’s time to take the long view.

“This is your third year (since the de-merger) and you’ve had a lot of turnover in the staff. It’s realistic that you weren’t able to plan because the landscape has been changing so much,” said Basar. “Now we need to look what’s the footprint going to look like for the next 50 years.”

That likely means more school closures on the horizon. But the process has slowed dramatically under a strategic plan unveiled last month by Hopson to determine which struggling schools to invest in based on enrollment, academic performance and maintenance costs. Interventions will take cues from the district’s Innovation Zone, the district’s expensive turnaround model, with the expectation of steady academic improvement.

“This is the process the board was hoping for,” Caldwell said. “Sometimes decisions were made looking retroactively, but this is a move on the front end.”

Love said Hopson’s plan reflects more optimism about finances.

“Being that we don’t have a deficit, we’re able to do the superintendent’s summer academy,” she said, referring to this summer’s intervention program for 5,000 students). “We’re about to put more money into schools that haven’t received support from the Achievement School District or the iZone.”

This school year also marks the depletion of a historic $90 million grant from Bill & Melinda Gates Foundation that changed the way the district evaluates and trains teachers. District spokeswoman Natalia Powers says the upcoming budget will need to bolster professional development so the district can house its own teacher training rather than contracting that service out.

school finance

Memphis charters could soon qualify for free rent in district-owned buildings

PHOTO: Courtesy of Vision Prep
Building maintenance is a challenge for charter schools in Memphis that pay rent to Shelby County Schools, including Vision Preparatory Charter School pictured here in spring 2017.

In a sea change, some Memphis charters could soon use district buildings without paying rent, though which would qualify is yet to be determined.

The proposal is the latest from the committee of charter and district leaders tasked with working through thorny issues between the sectors, which often have a tense relationship because they are competing for students. Shelby County Schools board members will discuss the recommendation at its meeting tomorrow evening and vote next Tuesday.

The group is also recommending that Shelby County Schools sell its unused buildings to charter schools if the buildings are in good enough condition. Of the 10 vacant district-owned buildings, four would qualify.

The proposed policy would go a long way in clarifying charter school access to public facilities and speeding up Shelby County Schools’ shedding of excess buildings, an issue that has become more acutely felt as enrollment declines.


2016 map: Half of Memphis schools closed since 2012 stand empty


Charter schools authorized by Shelby County Schools make up about a fourth of the district, the most in the state, but only five of the 51 schools use district space. The rest rent private space or, in a few cases, own their buildings.

One barrier to using district space: Until recently, district officials required charter schools to pay rent because not all schools agreed to pay an “authorizer fee” meant to defray the costs the district incurs in overseeing charters. But now that a new state law requires charter schools to pay 3 percent of their state and local dollars to their authorizers starting next year, the district is under less pressure to recoup costs.

The prospect of a change is exciting to Tom Benton, the founder of Vision Prep, one of the five schools currently operating in district space. The school has been spending $79,000 a year to rent its southwest Memphis building, while also footing the bill for maintenance, utilities, some insurance, and any capital improvements it wants to make.

Benton said there are better uses for taxpayer dollars.

“That money could have bought us a new roof,” Benton said from his office, which is one of several parts of the school that have flooded during recent rainfalls. He recently promoted a part-time building engineer to full-time to deal with the issue.

“This is a public school with public school children,” he said. “We feel like those dollars should follow the child.”

It’s unclear whether Vision Prep will get to operate rent-free. The proposal does not guarantee free rent, only make it available, and it does not specify which charter schools will qualify.

Brad Leon, chief of strategy and performance management, said the district could weigh where the school wants to locate, performance on state tests, and whether the school offers specific programs, such as STEM or Montessori. Those specifications would ultimately be up to the school board, Leon said.


With a charter comes the search for school space. Here’s how one Memphis operator is doing it.


How school districts handle space requests by charter schools says a lot about their relationship with the publicly funded, privately managed schools. In New York City, former Mayor Michael Bloomberg, a charter schools advocate, handed out excess space at no cost — a policy that his successor, the current mayor Bill de Blasio, campaigned on altering. (Legislation has stopped him from making major changes.)

Other urban districts with a large number of charters, including Chicago and Indianapolis, negotiate nominal rents — often just $1 — for charter schools. Those cities have robust charter sectors and, importantly, district leaders who accept that charter schools are going to serve a large number of local students.

Shelby County Schools officials have a more complicated relationship with the city’s growing charter sector. They are actively vying to prevent more students from leaving the district for charter schools. And they resent being required by law to allow the 29 Memphis schools in the state-run Achievement School District, which takes over low-performing schools and mostly turns them into charters, to operate in their buildings rent-free.

Tennessee has helped charter schools with space in other ways. It requires districts to post a list of vacant or underused properties that could be used by charter schools, although it lets districts ultimately decide what to do with the buildings.

The state has shown willingness to help charter schools with facility expenses. The same state law that ushered in the authorizer fee also launched a $6 million grant program to reimburse charter schools for capital projects, rent, or purchasing buildings — if the school has a high academic growth score. Benton said Vision Prep has applied to the grant program to offset the school’s costs.

Alliance

Memphis just gained an important ally in its legal battle with Tennessee over school funding

PHOTO: MNPS
The board for Metropolitan Nashville Public Schools voted Tuesday to become a co-plaintiff in Shelby County Schools' funding lawsuit against the state of Tennessee.

For more than two years, a funding lawsuit by Memphis school leaders has been winding through the state’s legal system.

Now, as the litigation inches closer to a court date next year, Shelby County Schools has gained a powerful ally in its battle with Tennessee over the adequacy of funding for its schools and students.

The board for Metropolitan Nashville Public Schools voted unanimously Tuesday to become a co-plaintiff in the case.

The decision ends almost three years of talk from Nashville about going to court.

In 2015 at the urging of then-director Jesse Register, the district’s board opted for conversation over litigation with Gov. Bill Haslam’s administration about how to improve education funding in Tennessee.

But Register moved on, and the board’s dissatisfaction grew as the percentage of state funding for the district’s budget shrank. Adding to their frustration, Haslam backed off last year from an enhanced funding formula approved in 2007 during the administration of his predecessor, Phil Bredesen.

“We’ve just come to grips with the harsh reality that we are a chronically underfunded school system,” said Will Pinkston, a board member who has urged legal action.

Nashville’s decision is welcome news for Memphis. A statement Wednesday from the state’s largest district called the lawsuit “the most important civil rights litigation in Tennessee in the last 30 years.”

“When you have the two largest school districts in Tennessee on the same side, I think it’s very powerful,” added former board chairman Chris Caldwell, who has championed the lawsuit in behalf of Shelby County Schools.

Both boards are working with Tennessee-based Baker Donelson, one of the South’s largest and oldest law firms. It has offices in both cities.

“We believe that our original case had a strong message about the inadequacy of education funding in Tennessee,” said Lori Patterson, lead attorney in the case from Memphis. “We believe that having the second largest district in the state join the suit and make the same claims only makes the message stronger.”

PHOTO: TN.Gov
Gov. Bill Haslam

Haslam’s administration declined to comment Wednesday about the new development, but has stood by Tennessee’s funding model. In a 2016 response to the Shelby County lawsuit, the state said its formula known as the Basic Education Plan, or BEP, provides adequate funding under state law.

But Shelby County, in its 2015 suit, argues that not only does the state not adequately fund K-12 schools, it doesn’t fully fund its own formula. And the formula, it charges, “fails to take into account the actual costs of funding an education,” especially for the many poor students in Memphis. To provide an adequate education, the lawsuit says the district needs more resources to pay for everything from math and reading tutors to guidance counselors and social workers.

States often get sued over funding for schools — and frequently lose those cases. In Tennessee, state courts heard three such cases from the late 1980s to the early 2000s, siding with local districts every time. Those suits keyed in on built-in inequities in the state’s funding formula that cause some districts to get more money than others.

This time, the argument is about adequacy. What is the true cost of educating today’s students, especially in the shift to more rigorous academic standards?

Tennessee is also the defendant in a separate funding lawsuit filed in 2015 by seven southeast Tennessee school districts including Hamilton County Schools in Chattanooga.

Pinkston said Nashville opted to join the Memphis suit because its arguments are most applicable to the state’s second largest district. “Our student populations are very similar in terms of high socioeconomic needs,” he said.