Sales tax hike probably won't increase funding for education

Wednesday, May 5, 2010

Increasing the sales tax rate probably won't increase the amount of money appropriated to schools, according to discussion among local leaders during teacher contract talks late last week.

Early last week, that view on the availability of new money for schools was revealed during the monthly meeting of the Marshall County Commission. Three days later, the Marshall County Education Association's negotiating team agreed with the Board of Education's team.

Their conclusion: County residents must be told that voting to raise the sales tax will not increase funding for education.

As a result, other topics that afternoon were put on hold as they discussed money problems.

County commissioners voted last week to ask the Election Commission to schedule a referendum in August to increase the sales tax rate from 9.25 percent to 9.75 percent.

Referring to the requested referendum for a half-cent sales tax rate hike, Craig Michael, lead negotiator for the school board, said, "Half of that revenue (from a sales tax hike) would go to the school system.

"That's a true statement," he continued. "But it doesn't give the whole story. The budget committee chairman was very clear we would get the same amount of money."

Property tax revenue allotted to the schools could be decreased by the county commission to maintain the same level of funding for schools when there's an increase in funding from sales tax.

Tennessee is one of a minority of states where school boards do not have taxing authority, Michael explained. There has been legislation proposed in the state General Assembly to change that, but it's not been voted into law.

"We have responsibility without authority," Michael summed up. "It's a huge issue throughout the state."

MCEA leader Kathy Stapleton asked, "Is there any way we can know what's happening with the budget?"

She was specifically interested in the mentoring program.

"It's not included in this budget," replied Janet Wiles, the schools' budget director and a member of the schools' negotiating team. "It's one thing Race to the Top funds could be used for -- giving mentoring stipends."

Race to the Top is a new federal program to improve education.

"Can we get a copy of the budget you are working with?" Betsy Bishop asked and Michael replied, "Just ask for it."

But current documents are not the budget. It is a work in progress now.

"It's scary to put preliminary numbers out there," Wiles cautioned. "People count on stuff and it ends up being cut."

Michael suggested that she give MCEA members a budget summary sheet like the one she gives board members, and Wiles agreed.

"There's nothing to hide," she said. "I'll answer any question."

At this point, the board of education is proposing to use a considerable amount of fund balance to make next year's budget work, and Wiles pointed out that the county commission has to approve the use of fund balance, even if the schools are appropriated the same amount of money as scheduled in the budget adopted last year.

That's called "maintenance of effort" and it's been a sore spot with commissioners because in their view, spending reserves increases funding to education and then triggers another requirement for budgets.

Reserves, or the budget's fund balance, should be preserved at a certain percentage, according to accounting standards imposed on county government.

MCEA members and the board of education all want to improve education in Marshall County, but see no prospect of getting extra money to fund changes, according to discussion during the Thursday meeting.

"If this County doesn't do something different, we'll stay at the top of the unemployment table," Michael said. "If we don't change education, that's never going to change."

Economic developers see a well-educated workforce as an attraction for employers.

"Without good education, good companies won't want to come here." Stapleton responded to Michael's statement.

Problems brought up by MCEA team members at the meeting included lack of intervention for gifted students, programs that are not working, falling test scores, and large class sizes.

Michael urged teachers to come up with solutions for problems in their schools, but warned them that there was no money for any increase in compensation beyond their step raises.

Topics to be discussed at the next negotiating session include professional development and in-service days, MCEA dues and the payroll, and the differentiated pay scale and national board certification.