Candidate recognizes unintended consequences

Wednesday, July 28, 2010

While campaigning in Lewisburg last week, Tennessee Lt. Gov. Ron Ramsey said he's realized a state law may hamstring Marshall County commissioners' control over spending so he's willing to re-examine the law.

Ramsey is one of three candidates campaigning for the Republican nomination to run for governor. If he wins the primary on Thursday next week, Aug. 5, then he faces Democrat Mike McWherter in the November election. If he doesn't make it to the Governor's Mansion, he'll still be a state senator, and quite possibly speaker of the Senate, the post that also carries the title of lieutenant governor.

For several years, Marshall County commissioners have wrestled with a regulation in the Basic Education Program (BEP) that requires a maintenance of effort; interpreted by local officials as meaning spending on schools can't be cut.

Critics of the law point to another state requirement that requires a fund balance, or reserves that must at least equal three percent of planned spending. When that applies to school budgets, it's been seen as a double-edged sword - defending quality education but also requiring more money for schools when spending dips too far into reserve funds.

"That makes no sense and it's something we should look at," Ramsey said in an interview at the Marshall County Tribune office on Friday.

"If you're in extraordinary times, as we are right now - and hopefully that doesn't last forever - and you're living off your reserve funds, then that shouldn't count against your maintenance of effort," Ramsey said, suggesting it would be more realistic for a state regulation to "look at the base line" of what the county has spent on education.

"Maintenance of effort is - in and of itself - not a bad thing," Ramsey said.

As the subject was raised in a wide-ranging, half-hour interview, Ramsey immediately realized "maintenance of effort" was the issue and he asserted his standing: "I'm the only one (running for governor) who's capable of talking about this stuff. Others don't have a clue what we're talking about."

It's an example of why Wayne Coomes - former Lewisburg police chief, community activist and Ramsey campaign supporter in Marshall County, advocates Ramsey. He's the only candidate with experience in state government.

"When we started the BEP," Ramsey said, recalling his work in the state House, "the state started putting ... a lot more money into local education ... and we wanted to make sure... that if the state put a lot more money into ... (for example) Marshall County that it went into the top of the budget and that counties didn't pull it back out of the bottom of the budget.

"Maintenance of effort has been controversial from the very beginning," he said.

It was one of the reasons Marshall County's Budget Committee on Monday rejected the school budget again. The school board wants to spend more that $887,000 from reserves. That's interpreted as dipping too close to the minimum required in the reserve fund, also known as the fund balance.

Audits by the State Comptroller's office admonish local governments for not abiding by good accounting practices and one of them is to keep at least three percent of the level of spending in a fund balance.

Marshall County's Commission has taken audit "findings" seriously, Ramsey was told. And, "as it should," he replied.

Critics of the BEP requirement say that if spending dips too far into the fund balance, then the reserve fund must be replenished. Furthermore, balancing a budget's spending side against its revenue side by drawing on reserves increases the maintenance of effort, thereby constantly increasing school budgets with a law prohibiting reductions.

Ramsey's suggestion to "look at the base line" of a school budget is a comparison to "the Copeland Cap." State Rep. David Copeland brought forth the standard so the state can't exceed expenses compared to a formula that includes calculations on personal income, growth and inflation. Lawmakers can vote to override it under extraordinary circumstances.

Tennessee "revenues have been down for 22 months in a row," Ramsey said. "We're pulling money from the rainy day fund. Just like you're talking about for local schools," he said during his conversation with the Tribune.

"That's something that maybe we ought to look at to make sure that money coming from the reserve fund doesn't count against maintenance of effort," the lieutenant governor said.

"It's not been brought to me before now," he said.

"It's something that if I become governor, we should look into," Ramsey said, indicating it could be of interest to 126 school systems in the state.

Still, state lawmakers want to make sure that BEP money sent to county budgets is paying for schools, not roads, Ramsey said.