Mar 05 2013

R-E-S-P-E-C-T

Posted by Steve Ross in MCS Media, media, Memphis, Shelby County

I’ve been thinking about a lot of things since last week’s school board meeting.

We all need a some…

That meeting sent me down a whole lot of rabbit holes. The analytical side of me wants to make a rational argument that supports my overall aim of improving life for all people in and around Shelby Co. While I think that’s important, I also know that no matter what I say there are some who are so bought in to their notions of reality, regardless of how little factual basis there is behind that belief, that nothing I can say, no matter how rational, will sway them.

One thing that I think we call can understand is the idea of respect.

Respect is something we all crave. It is a sign of accomplishment. It tells us that others believe we have done something positive with our lives.

The very definition of respect: a feeling of deep admiration for someone or something elicited by their abilities, qualities, or achievements even evokes an emotional response.

We instinctively understand it. Regardless of the facts surrounding the specific case.

The interesting case of Joe Flacco

Last night, when I was on my way home from work, I was listening to some Sports Talk guys talk about the contract that just got signed by Superbowl MVP and Ravens Quarterback Joe Flacco. Here’s the thing that really hit home.

Joe Flacco
via Wikipedia Commons

“It was never about earning the money and all that. It was about earning the respect,” Flacco said Monday at his press conference announcing the new deal. “Definitely about earning that respect and feeling that respect around here. The fact that we got it done and that they made me [the highest-paid player in the NFL] definitely makes me feel good about how we played and how they feel about me.” – Joe Flacco (Source)

No matter how you slice it, Flacco’s contract is a boat-load of money. But its interesting what he equates with respect in a capitalistic society…namely money.

Of course, Flacco is a highly valued employee of the Baltimore Ravens. Some might say he’s overvalued based on the sheer size of his contract in relation to his ability. But this is what they were willing to give. This is what he wanted to feel respected. In this situation, I guess everyone got what they wanted.

Earnings and Respect

I’m not sure how I feel about the whole idea of equating respect and earnings. There are people who make more and less than me who I respect. The converse is also true. But more than that, there are people who do things that I just wouldn’t want to do, and I respect them for having the intestinal fortitude to actually do them.

What’s interesting is, many of these folks don’t get paid that much. Some are more educated than others. But the value they bring to society far outweighs all that, including their cost…or earnings.

If the principles of simple supply and demand were at play, they would probably be paid far more than they are now. By filling a need that few people want to do, they provide a service to the community that demands our respect (as a group, if not as individuals).

What’s most interesting to me is these are the very people whose earnings have been under attack over the past several years.

– Teachers have been attacked by the State Legislature, not to mention local officials, despite the fact that they do a very difficult job, in difficult circumstances, and most of them do relatively well (it we honestly look at the circumstances).

– Sanitation workers and first responders have been under attack for being a drain on resources. In all honesty, I wouldn’t want to live in a city where these three groups of people were either absent, or in short supply.

– Most recently, the janitors with the school district have been under attack. Tonight the School board will vote on outsourcing janitors to a private company. This contract is said to save the district as much as $11.5m/yr even though none of the details of how this service would be rendered have been provided in the bid.

In all of these cases, people who are doing a job that is necessary for our society to function are under attack because they just happen to be public employees. This is compounded when politicians rate their performance not on what they accomplish, but how much of the tax rate they can cut.

Considering this measure of success, its not surprising that we’ve seen absolutely zero movement on the issues that truly impact our community. They’re not worried enough about those issues to actually tackle them. They’re too focused about the damn tax rate as if that is a panacea.

Putting the Money in Perspective

It ain’t all about the Benjamins.

Now, $11.5m is probably more than I’ll make in my lifetime. Its a lot of money. A savings of $11.5m, if applied to our current tax rate, would mean about $18/yr for the median homeowner in Shelby Co. (for a home valued at $120k).

The way this money gets saved is by cutting $5000 – $6000 of pay a year from the average janitor.

The argument in favor of this idea says that the savings in taxes would provide jobs. I don’t know about you, but $18 won’t even get me a babysitter for 2 hours, so I don’t know what kind of jobs I’ll be providing.

Of course, they’re not talking about me, or even you. They’re talking about businesses with millions of dollars of assets. Based on my very rough estimates, it would take a company with assets totaling more than $850,000 to net enough savings to net even one minimum wage job.

That is assuming that they need to hire to expand their business. The money may just be pocketed in savings, which would actually hurt consumption, which hurts the economy, on top of hurting the 650 janitors currently working for MCS, making at least $5000 less a year and either having to work another job, or go on government assistance.

What about FedEx, AutoZone or International Paper? Our largest local employers already have tax deals called PILOTS (Payments in Lieu of Taxes) as well as other incentives that minimize their exposure to fluctuations in the tax rate, so no, it wouldn’t do one thing to cause them to expand their operations.

End result, not 650 jobs good paying jobs. Not even 1/10th of that.

Where’s the Respect?

Not just no respect. Disrespectful.

What we’re left with is a decision. Is getting $18 (maybe a little more, maybe a little less) back a year worth putting between 650 to 1000 people in financial jeopardy?

These are people, not numbers.

How would you feel about an arbitrary $5000/yr. cut to your income?

How would that make you feel about your employer?

If you worked for a public entity (like the schools or the City or County) how would it make you feel about your community?

Would it make you feel respected to know that your economic wellbeing was being sacrificed for $18 a home?

Is that respect? Is that honoring human dignity? Does that make our community a better place?

I don’t think so. To me its a small price to pay for people to make a decent wage.

Now I’m sure someone out there thinks its totally acceptable to tell these workers that their economic livelihood is worth $18 a home in property tax savings.

I’m sure someone thinks its disrespectful to taxpayers to pay anyone 1¢ more than they have to.

I’m sure that someone thinks the private sector can do this job better, and that custodial work isn’t part of the “core functions” of the school district

But it is.

Providing a safe, clean place for children to learn is absolutely a core function of the school district. And paying people a respectful wage for their labor and their loyalty is something that should be a core belief of any community that isn’t diving into a pit of “eating their own”.

That’s what this has become. From the School Board, the City Council, and on up the tree of government to the Federal level. That doesn’t mean we can’t trim unnecessary things, it means we have to do it in a smart way.

Starting with low income workers in a town with a 26% poverty rate isn’t it…unless you want more poverty.

I won’t hold my breath, but I hope the members of the school board will respect the people who have worked for the district enough to hold firm on their incomes. I don’t believe they will.

What I see is a group of people who are terrified a Judge might disapprove of their decisions and appoint someone to watch over them.

This decision won’t have a great impact on whether that happens or not.

This decision isn’t the hardest decision the school board has put off. But it might as well be. Because if this decision is indicative of the level of thought the School Board is putting into planning the next school year, we’re in a lot more trouble than even the folks wanting their own schools think we are.

Feb 27 2013

Fact Check: Overspending Schools…etc.

Posted by Steve Ross in MCS Media, media, Memphis, Shelby County

How much is too much spending on education?

One of the most common criticisms of our local schools, particularly MCS, is that they waste too much money…or in terms of politics speak, they spend too much.

There are basically two ways to cut down on spending: lower your projected expenditures on the front end, or lower them on the back end based on reserves and revenues. Its probably a mischaracterization to say that the schools have chosen the latter, though that’s definitely the perception, and conventional wisdom that prevails.

Unfortunately for the cause of honest debate, just what the right amount of “spending” actually is never really comes into the conversation. One naturally assumes that it means the balance of meeting the mission with as little waste as possible. Of course, everyone wants that. But the argument assumes that this isn’t happening now.

With that in mind, I’m going to tackle two of the more popular fallacies spread by the “spending too much” crowd.

The “Bloated Bureaucracy” Argument

One of the most common and widely accepted arguments about school funding is that it is rife with waste. Charges of patronage jobs, and administrators whose jobs are either duplicated elsewhere, or who do nothing have littered the debate over school funding and efficiency for longer than anyone can remember.

The typical counter to this charge is that these jobs are necessary to conduct business.

One thing neither side of this debate does is come forward with numbers, other than the number of employees, to support their claims.

The “bloated administration” side has an easy lift. Americans hate the idea of bureaucracy. MCS has done itself no favors with some of its practices. But ultimately, the charges and counter-claims are left unsupported, leaving the listener to make an uninformed decision based on their personal perspective. Combine that with the constant beating of the drum of bloat, and over time, people come to accept the argument because the school system has never really presented a solid or coherent argument against it.

But is it true? To find out, we have to look at like agencies. How about other school districts across the state.

The challenge here is grouping like things accordingly. Because of the way some districts report expenses, not all expense categories or sub-categories match exactly, but by and large this estimate is within .1% between districts.

The key thing here is that across Tennessee, the state’s largest districts spend about the same percentage of total expenditures on Administration functions, between four and five percent.

So if MCS, as it stands now, is bloated, then so are all the other districts in Tennessee, including SCS, which is often heralded as the model for efficient administration, and has the second highest percentage of all the urban districts.

In short, the allegation that MCS is somehow any more wasteful on administrative functions is false.

$10,000 per child fallacy

Commissioner Wyatt Bunker

Over the weekend, County Commissioner Wyatt Bunker repeated an oft heard claim that MCS spends upwards of $10,000 per student.

Here’s the exact quote:

“Shelby County Schools between $7,000 and $8,000 per student was able to produce more teachers, more teacher assistance, more librarians in their schools than Memphis City Schools was with about $10,000 per pupil,” says Bunker.

This is what one would call “creative math”.

Look back at the spreadsheet above. You’ll note I helpfully provided the per child spending for each district.

Not only does MCS not spend $10,000 per child, they don’t spend as much as other districts around the state. MCS comes in third in terms of per child spending, behind Hamilton Co. Schools and Metro Nashville schools.

So where does Bunker get this $10,000 number from?

To get to $10,000 per child, you have to include all the funds from the General Fund, and all Special Revenue Funds, which include services for kids who are severely economically disadvantaged, or have some kind of special need.

Of the $250m that flows into MCS for these special, need based projects, only $2,000 comes from Shelby Co. government.

But wait, there’s more.

SCS gets this money too. In fact, their per child spending bumps up to over $9000 per child if you include it.

MCS gets more as a percentage of its total budget because it has a far higher percentage of children who are economically disadvantaged or have other special needs.

But to characterize the “General Fund” expenditure for SCS and the “All Revenue” expenditure for MCS as somehow equivalent is not only incorrect, its outright dishonest.

I should note, Commissioner Bunker isn’t the only one to spread this fallacy. He’s just the most recent one to get caught on camera spreading it. There are plenty of other local politicians who have used this creativity for various purposes.

Conclusion

Both of our examples put in perspective the reality of school spending.

First, our local school districts don’t spend more on administration than other large school districts across the state.

Second, our spending per pupil isn’t outside the norm for these same districts.

All that said, it doesn’t mean there aren’t opportunities for added efficiency. I don’t work for any school district, so I’m not qualified to make a determination.

In fact, no one on the County Commission works for a school district, with the exception of Melvin Burgess, who is well placed to know just how lean the district is running.

Perhaps rather than trying to foist a trumped up “conflict of interest” cloud on him, as Commissioner Terry Roland charged, they could ask him about efficiency measures the district has taken.

I know, that doesn’t play well in the media.

In the end, rather than political gamesmanship we need an honest debate about the budget for the schools. That has been completely absent from this debate to date.

Hopefully, that will change soon. One can hope, right?

Feb 24 2013

Tell Your Story, or Perish at Your Own Hand

I’m going to take a quick detour from the budget issues to talk about something that I believe ties in directly to the way we perceive our schools, and by extension, the amount of investment we’re willing to place in those schools.

The Power of Narrative

You have a story to tell. If you don’t tell your story, someone else will.
When someone else tells your story, it won’t be the story you want told.

Telling your story is critical to reaching agreement

In the nearly nine years that I’ve lived here, there’s been a narrative that the City schools are “bad”. This despite the reality that there are many “good” city schools. This narrative plays out in the media by focusing on what I call “Blue Light stories”, or stories that involve the police and stories that focus on district-wide measures with little or no background.

For the majority of the first several years I lived here, the only real stories coming out of the City schools were those that support the idea that there is an inherent “badness” about them. Fights, arrests, and failing schools, including a story that tried to paint a program that would keep pregnant teens in school as a problem rather than a solution. All this has furthered the notion that the City schools are “bad”.

Its easy to blame the media for this, but in reality it is the result of a reclusive organization that hopes to ride under the radar rather than spend the time and effort required to craft a narrative of successes despite the circumstance.

Truth is, there are plenty of examples of success in our City schools. Those successes happen despite the difficult realities that so many of our children face.

Our high rate of poverty means that the family of nearly every child in the district is one paycheck away, or less, from financial distress.

The transient nature of much of our population means that many children will transfer from one school to another, sometimes several times, during the school year. Research shows this can severely delay a child’s development.

High rates of teen pregnancy and crime in many neighborhoods means that children are thrust into adulthood well before they are ready, which often means they end their education prematurely.

These aren’t excuses, they are reality. A reality that the Schools can’t overcome on their own. A reality that most decision-makers in both the public and private sectors don’t want to face because it is an indictment of their continued inaction.

Instead, these same decision-makers tell stories of how the poor should pick themselves up by their bootstraps, ignoring the fact that none of those bootstrap stories we’ve all heard so much about came to fruition without the intervention of a benefactor.

Celebrate and Build on Success

President Obama at
Booker T. Washington event.
via White House

The story of Booker T. Washington High School’s victory of bringing President Obama to Memphis is perhaps one of the greatest victories for the City Schools. Here, in one of the most economically depressed zip codes in the County, a group of children, led by a nurturing faculty, did something that no one would have expected or believed they could do.

The story was simple, relevant and compelling…triumph over circumstance.

More recently, the naming of MCS Teacher Allison Chick as TN Teacher of the year provided the district with an opportunity to tell the stories of teachers who are going above and beyond to be a positive force in the lives of their children.

There are many teachers in Memphis who are a part of the I teach. I am. initiative. This program tells a compelling narrative. Unfortunately, it took me Googling Ms. Chick’s name to find it.

These examples, and hundreds more like them, are stories that need to be told. Stories of overcoming the odds. Stories that not only highlight individual achievement, but change the narrative that people somehow build success in a vacuum.

People need evidence of success to strengthen their hope, faith and resolve that things can get better. There is no single magic bullet. At this point, the district isn’t even firing a shot. The result is a continued belief that nothing is getting better and nothing can be done.

It is critical that the district challenge that narrative head on.

What Our Schools Say About Us

The disconnect is stunning. As a community, we conveniently ignore the fact that if our schools are failing, we as a community are failing.

Yet those who would seek to discredit the City schools continue to point to them as a failure, even though they themselves are complicit in that failure.

By failing to address the circumstances that are a drag on the development of our children and our overall prosperity we fail to recognize that we’re all in this together…whether we like it or not.

Some try to excuse these failures by characterizing whole classes of people as lazy or worse. Truth be told, if there were as many lazy folks in our community as people claim, the uphill battle would be far steeper than it is today. No man is an island. Without meaningful and widespread support, even the most gifted fail.

The end result is, as a community, we’ve proven to be either too selfish, or short-sighted to even begin to tackle these longstanding problems that ultimately impact educational attainment and community prosperity.

In the long run, we’re doing nothing but hurting ourselves.

The Power of Belief

Chalenge yourself to not only believe, but to act.

Over two years ago, when the Grizzlies began the “Believe Memphis” campaign, a lot of us thought it was a joke. I’ll admit to openly mocking it.

In the time since I’ve become a believer.

This isn’t just because of the words, though that helped, but also because of the results. The team went on to prove me wrong in my belief to a point that they changed my belief.

Building success in education takes more than a season, but there are many little agreements that can be sought to build that larger agreement of belief.

Telling your story is the first step to building belief. It shows people that you not only care, but that you care enough to say it in a meaningful, coherent and engaging way.

That’s important. You can’t build agreement with just words alone. You must do it in a way that is mindful of those who may seek a different narrative, and be ready to smack that down clearly and concisely.

Failing to do that, just gives more legs to your detractors.

Silence is Deadly

Silence is not golden

As we’ve seen with the current debate about the $145m deficit in the proposed school budget, not telling the story of why the USB needs to bridge the gap is severely hurting the body, and the future of our schools.

There are people, both on the USB and on the County Commission, who seek to discredit the USB because it furthers their short-term interests…municipal schools.

The USB has done itself no favors by neglecting to release a detailed draft of proposed expenditures and showing how those expenditures compare to previous years.

I’ve attempted to do this, by showing last year’s budget, but that can only go so far. Without real numbers from the USB, even they can’t defend themselves, not to mention, a blogger who has limited time, and few resources other than passion.

That passion is fading due to the lack of meaningful information from the body. I can write about this all day long, but the ultimate responsibility is for the USB to tell the story of why there’s a $145m deficit. They not only haven’t done that with any clarity, they’ve all but refused to do so.

The result is that individuals, like County Commissioners Chris Thomas, Wyatt Bunker, and Terry Roland, have rolled the USB making them look inept. Whats more, people who would likely take the side of the USB have been left with nothing to present a counter-argument.

Stop being stupid. Get out in front of your story. Your silence is not only killing you, but also hurting the future of children in the district.

Conclusion

It doesn’t matter that the numbers, as they stand right now, are merely projections. They’re the numbers you have. Support them.

It doesn’t matter if the motivation of of the $145m increase was to sow conflict. The USB voted on it, overwhelmingly approved it. Support it. (Note: I’m not saying that was the motivation, I’m just not counting it out as a possibility.)

It doesn’t matter that your main detractors on the County Commission also support municipal schools. Even your supporters can’t get behind this proposal because you haven’t supported it.

Stop making the counter-argument easy for your detractors.

Stop acting like a helpless, hapless body.

Get out in front of your story. Support it with documents and facts. Make it easy for natural allies to not only come out in favor of the proposal, but become evangelists for the cause.

That’s how you build agreement.

That’s how you stifle dissent.

That’s how you tell the story of what we could be…if only people were willing to invest in the future.

Is the USB willing to invest the effort to tell the story of our community?

Only time will tell.

Feb 19 2013

Funding Education 101 – Part 2 – Where the Money Goes

Click to embiggen.

Last time, we looked at where the money for public education in Shelby Co. came from. As a reminder, this wasn’t the full budget of the two systems, but the “General Fund”, which is where the money for the nuts and bolts of education comes from.

This time, we’re going to look at something a bit more complicated. Where the money goes. Because this is complicated I’ve consolidated some categories to make things easier. At the end of this post, I’ll give some detail about what the categories cover specifically, but for the purposes of right now, taking a more “top line” view may be better to get things going.

With that in mind, here are the numbers:

Categories: Administration (General Administration, Fiscal Services, Other Support Services), Principal/Support (Office of Principal, Student Support), Instruction (Instruction, Instruction Support)

One thing that’s interesting to note: The total expenses of both districts amounts to $1.26b. That’s just $40m less than the $1.3b the USB is currently budgeting. Suddenly doesn’t make that number seem so crazy.

Something else to consider is that the USB isn’t asking for $145m more from the County Commission. They can’t divine where or how revenue is going to look anymore than I can divine Powerball numbers. They can figure out how much stuff costs, and let the Commission know how much they need to operate. That, by the way, is how budgets are negotiated.

More astute readers will notice that MCS is operating in the red this year. This is not a new thing. They’ve been operating in the red for several years. In fact, MCS’s reserve fund has plummeted from a beginning balance of $304m in 2008 to under $130m as of this year. (SCS has also been using reserves to the tune of $6.5m this year.)

Bleeding Money?

For as long as I can remember, there’s been a meme about how wasteful MCS is. Apparently, they’re just blowing money on ridiculous things, to hear some folks tell it. But if you remember from last time, I talked about the how much things cost for an aging school district, and I think this spreadsheet lays it out pretty well.

From the looks of this spreadsheet, it doesn’t seem like there’s that much difference in the two, as it relates to overall costs of the Administration, school staff, etc.

If anything, SCS spends more in all of those categories as a percentage of total expenses.

There are two areas of difference: Instruction and maintenance.

If you take the amount MCS pushes into Charter schools and add it to instruction, instruction is virtually identical.

However, MCS pays almost 12% of their total budget on maintenance. A lot of this is due to aging schools, or schools that are underutilized. If MCS spent the same percentage of budget, as they do on almost everything else, as SCS on maintenance, that would free up an additional $37.5m in the budget for all kinds of things.

Back to the Deficit

In the first spreadsheet above, I noted that MCS has had to tap into its reserves to the tune of $33m this year, just to maintain the current level of service. This has been happening for some time. Current reserves are less than half of what they were in 2008, down to $128m from $262m. Some of this is due to the $50m+ owed by the City of Memphis. But the lion’s share is due to the County Commission consistently underfunding MCS compared to SCS. Here’s an example from the 2010-2013 budget years:

As you can see here, the County has consistently, over the past 4 years, funded the City schools less, as a percentage of BEP than the County Schools. Sure, both numbers are more than the minimum, but the lack of true parity turns into real money in short order. $63m of real money in fact.

If you take that $63m gap from the County Commission, add it to the $55m owed from the City of Memphis, and then tack on the additional cost of maintaining older buildings $37m you come up with $155m, or an amount nearly identical to the amount MCS has had to tap into reserves over the same time period.

What’s most interesting to me is that there is no local politician that I’m aware of, that has been elected while running against education. Everyone holds it up as a positive that is vital to the future of our community. Everyone, that is, until it comes to paying for it. That’s where you get all the fighting.

No politician, in their right mind, wants to come before the voters and hold up a tax increase as a crowning achievement. Which puts education where it really is for politicians, a tool to manipulate. A rhetorical flourish. An easy source of agreement.

Key Takeaways

So what have we learned from this round of Funding Education 101:

1. MCS and SCS have very similar funding schemes when it comes to their budgets.
2. If SCS was the “efficient” district, then by default MCS must be as well.
3. Both districts have been using reserves to maintain services. (I didn’t talk about it but SCS has used nearly $24m of reserves in the past 2 years. They do not publish their reserve balance as far as I know.)
4. Both districts expenses combined are currently $1.26b, just $40m less than the $1.3b the USB is asking for.
5. MCS has older infrastructure and therefore greater maintenance costs to the tune of $37m/yr.
6.The Shelby County Commission has been appropriating a greater overage of BEP to SCS than MCS for the past 4 years, which translates to $63m less revenue for MCS.

One thing that hasn’t been discussed is the issue of efficiencies. This is something that the County Commission is consistently asking for. Its understandable, but from looking at both budgets and comparing them side by side, they’re really pretty lean, unless you want to start paying teachers less, which is no way to attract and retain talent to the district.

In this epic post, Schooling Memphis takes on the efficiency issue. Scroll down to #7 and take a gander.

As I showed above, the long hard fact is that MCS is as, if not more efficient than SCS. What County residents, led by USB member David Reeves, are saying is they don’t want to do without…something MCS has been doing for a very long time. Interesting dynamic, especially in what will most likely be a very tight budget year.

Conclusion

So that pretty much takes care of the primer on the “General Fund” budget. I could spend a week on the “Special Revenue Fund” budget, but here’s all you really need to know. Almost all the money is Federal, and most of it pays for nutrition. Over 90% of MCS students qualify for free or reduced lunches. For some of the least fortunate kids, the breakfast and lunch they receive at school are the only real stable meals they get.

This kind of deep seated problem isn’t something the schools can fix. All they can do is react and try to mitigate the problem. That’s what “Special Revenue Funds” do.

I’ll go back to a couple of paragraphs from my first post:

Shelby Co. deserves and needs a public educational system that is equipped to play a positive role in a reversal of fortune for the 30.3% of children in our community that currently live in poverty (Source). There’s no way to know if the new system will be able to overcome the challenges of generational poverty and low educational attainment, but if those were our goals, rather than blame-storming for political gain, we would be one step closer to achieving it.

But as long as our elected officials choose to play politics with public education…from the State Legislature to local government, we’ll be fighting the wrong fight…and the children will suffer for it.

There’s not a single issue, from zoning and planning, to neighborhood revitalization, to employment opportunities, to crime, that doesn’t impact education. Kids only spend 17% of their year in school (180 days, 8 hours a day). The rest of the time they’re in their neighborhoods and the environment those neighborhoods provide.

The absolute lack of any kind of long-term vision from both the City and the County (they share a planning department after all) to address the dire conditions in many neighborhoods in this community not only tells a story about how our governments see the less fortunate, but it also shows how little they understand about their own tax structure.

For years we’ve heard that the hollowing out of the City core is part of the problem with the budget scenario in Memphis. Yet for as long as that discussion has been going on, little has been done. This problem is about to raise up and bite the County government next. Thousands of properties, left to neglect, will be valued in this assessment at a lower value than they should be. If the City and County were truly protecting their interests, both in terms of tax rate and the quality of our neighborhoods they would be out there fighting their butts off to stop this trend. That’s not really happening.

This will not only depress our ability to fund our schools, but also make the job that much harder by allowing conditions to persist that research shows, depresses educational outcomes, as well as opportunities for the parents of those children.

Its a damn shame that no one on either body can get their head wrapped around this…because this lack of vision, more than anything else, is what’s keeping our community, including all the suburbs that behave like they’re somehow immune from the problems, from being the Shelby County it could be.

Feb 19 2013

Funding Education 101 – Part 1 – Where the Money Comes From

Members of the Unified School Board

I’m going to be very honest. I haven’t been following the blow by blow with the School Board. Too many meetings, too little information, in writing, too much speculation.

I like hard facts. I’m not interested in drama unless that drama furthers something relevant. For a whole host of reasons, some of which I covered in my last post, hard facts are hard to come by.

With that in mind, and at the request of the author of the Schooling Memphis blog I submit this 101 on education funding. The funding side is the easy part. Expenditures are the hard part. Where the money will come from is the debate. So to have that debate, its best to have a solid understanding of where the money has come from in the past.

I’ve not spoken to the author of Schooling Memphis personally, but he/she seems to have much more of a stomach for the minutiae than I do and is providing far better coverage of the blow by blow issues coming up with the USB than anyone, including and in some cases especially professional media. Keep an eye on that blog. I found it illuminating, even though I didn’t find it until after my last post.

Different Funds for Different Functions

Some of this will be review, but it bears repeating. There are two places revenue go: General Fund and Special Revenue Fund.

The General Fund is where money goes that deals with day-to-day school operations. The single greatest expense in the General fund is for payroll.

The Special Revenue Fund deals with “special” usually grant or need based programs.

For the purposes of this post, I’m going to talk about General Fund revenue, though I may touch on the other near the end.

From Whence It Comes

The money, aka revenue, to pay for public schools comes from four primary sources. In order of revenue they are:

State Government Appropriations
County Government Appropriations
County Sales Taxes
Federal Government
Other Sources

Once upon a time, Memphis Government also contributed, but that horse has left the stable and for the purposes of the upcoming budget year, its irrelevant.

How It Gets there

State Government – The TN state legislature makes an appropriation to fund the state BEP (Basic Education Program). This amount is based on the amount the TN Board of Education determines is required to fulfill the mandate set forth in the State Constitution to fund education.

The State Board of Education uses a formula detailed in the Blue Book that describes how the state will fund education. In addition, the State releases a Handbook for local computation that helps Local Educational Agencies (LEA) determine how to budget. All that culminates into a document that lists all the allocations from State government for the year.

There are two spreadsheets in this allocation. The first describes the basic level of the BEP. The second describes mandatory increases to the state’s portion of the allocation.

Go back to the first spreadsheet. Subtract column 8 from column 4 and you get a number that is the state mandated minimum of County funding for education.

The first estimates for the next school year are released in April. The document linked above is the final document for the 2012-13 school year.

County Appropriations – Because the state constitution says the state will fund education, and because Counties are, in essence, extensions of the state, Counties are required to contribute to the funding of their local schools. The minimum amount varies, but its all based on the BEP formula and Maintenance of Effort (MOE), a phrase that probably still causes some City Council Members to toss and turn at night.

Its important to note, this is the amount the County must fund via property taxes through the budget process. Sales taxes aren’t in this mix. Because both are from “County” sources, its easy to get confused about that.

County Local Option Sales TaxPolitifactTN actually has a pretty good explainer on this from the November election, or you could just go read TCA §§ 67-6-712, which is a round-about way of saying 1/2 of local sales taxes collected AUTOMATICALLY goes to schools.

Federal Government – I think there’s a perception that the Feds pay all this money for education.

They don’t. Lots of mandates, but not much money to carry out those mandates.

In reality, the majority of money that MOST school systems receive from the Feds is for Special Revenue or money we’re not really talking about right now.

How Much and How Many

Rather than write something flowery about the numbers, I’ll just show them to you. This is where the money came from for the current school year:

Use the scroll bar at the bottom to scroll further right. —->

This information is based on data contained in the following documents:

Current MCS Budget p. 92 | Current SCS Budget p. 5 | Shelby County Budget – Education p. 5

You’ll note: the “per pupil” number is lower than you’ve probably ever heard it being in years. That’s because this isn’t the ENTIRE budget for the schools. No, that adds another $350m to the mix. This is just the money for “General Operations” (Teachers, Buildings, Transportation, utilities, insurance, support staff, Administration). It should also be noted that Shelby Co. Schools calculates this by Average Daily Attendance, not enrollment. A nice accounting trick if I do say so myself.

You may be shocked to see that Shelby Co. spends some $400 less per student…but you shouldn’t be. County schools are generally newer, meaning fewer repairs are necessary. Newer also means more energy efficient.

What have we learned

It takes a lot of money to fund education. Way more than most people pay in County Property taxes (mine were less than $1200 and I think that’s a great value for public education and the rest of government).

The current cost of the “General Fund” for all education in Shelby Co. is $1.23b. The USB is asking for $1.3b, a difference of $70m. Based on what I know of the existing budgets, they’re not too far off the mark.

Next time, I’ll talk about the real cost of education, and how much we haven’t been paying. I may also delve into that $200m decrease I talked about last time.

Until then…