Mayor’s Office wants to learn more about Schools’ budget

Thursday, May 7, 2009 at 2:42am
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State law prohibits local governments from reducing schools' appropriations despite budget cuts in other areas.

Nashville’s public school system was singled out when the Mayor’s Office delivered its budget proposal to Metro Council last week. But not based on merit. Metro Nashville Public Schools was the only department Metro Finance Director Richard Riebeling said he needed more information from.

“Despite this decision to fully fund the schools, …I think all of us continue to have some concerns and issues,” Riebeling said. “We all need some additional information going forward.”

Riebeling said the Mayor’s Office wants to know more about how the district intends to spend the millions of federal stimulus dollars it stands to receive, as well as about the budget impact of Director of Schools Jesse Register’s planned reorganization of MNPS’ central office.

This year, departments across Metro government are taking cuts due to decreased revenues, and estimated layoffs of about 150 people are planned. One very large department that will experience no decrease, however, is Metro schools. State law prohibits Metro government from decreasing funding to the school system from year to year, unless school enrollment declines.

Though the school district’s budget includes the same level of funding that was provided last year, $15 million in cuts — including the elimination of more than 200 positions — were required.

In addition to the school system’s protection from cuts provided by state law, MNPS will also receive a short-term cash influx of more than $45 million in federal stimulus funds. Given the situation, Riebeling said he wants transparency about how those stimulus funds will be spent.

Basically, Metro government still doesn’t know how MNPS will spend the stimulus money, Riebeling said.

Metro schools officials, for their part, say they’ll communicate spending plans when they have them. The stimulus money comes with some fairly serious strings attached.

School board Chair David Fox said districts across the country are still learning more about how to spend stimulus funds. When MNPS knows how it can spend the money, the district will communicate the information.

“We’re being completely transparent,” Fox said. “We have shared all the information and knowledge we have of stimulus funds and their appropriate use. … I think the nature of the stimulus funding situation is one where information will be trickling out nationally over the coming weeks.”

District gets ‘stimulated’

MNPS stands to be allocated a total of $24.6 million in federal stimulus Title I dollars to be used specifically for students and schools meeting federal low-income guidelines, and more than $20 million in stimulus dollars Metro will receive through the Individuals with Disabilities Education Act (IDEA), which can be used only on services for students covered by the act. Any stimulus dollars the district uses to fund recurring expenses will have to be replaced with local dollars after the two-year stimulus program is complete.

Mayor Karl Dean, at a budget hearing with the district, asked MNPS to try to find ways to use stimulus money to fill holes in the operating budget. School officials, in return, have cited federal rules prohibiting Title I funds in particular from supplanting local dollars.

The school system already knows the consequences of neglecting federal funding rules. MNPS will have a longer wait for Title I stimulus funds than most other Tennessee districts, due to years of being out of compliance with federal programs spending. Federal Title I dollars intended for Metro have been “frozen” since December, according to the state Department of Education, due to non-compliant spending on the part of MNPS.

Most money that will reach schools through the federal stimulus package will flow through Title I, and until Metro resolves its federal spending troubles, Title I stimulus money will be frozen along with the rest.

Fox said Register has explained that the frozen funds can be accessed, just through a far more cumbersome process than would otherwise be expected.

“This district has kind of learned the hard way that we must take federal funding rules very seriously. …We’re committed to not repeating any mistakes when it comes to using federal funds,” Fox said. “You can’t supplant existing spending [with stimulus funds]. It has limited usefulness, as far as plugging holes in our operating budget.”

Maintenance of effort protects schools

Due to state laws about school district funding, Metro government can ask questions of the school district — but Metro can’t reduce the system’s funding level beneath what was appropriated last year.

Maintenance of effort regulations are unlike rules found in most areas of government. The rules mean that once a city government appropriates a certain level of funding to a school system, the money can never be taken away, unless the number of students attending that system falls.

This means that funding increases — like the bump the city gave the school system last year — are very long-term commitments. And in times of revenue shortfalls, it means that cities have to maintain consistent funding for schools while making cuts in other areas.

“The school lobby has a strong lobby at the state Legislature,” Riebeling said of the law. “I support the concept. … It’s just that this is [an] unusual cycle.”

Stephen Smith, assistant executive director of the Tennessee School Board Association, said the law serves an important purpose. Without the rules, state legislators might not have any guarantees that state funding increases intended for schools wouldn’t simply filter out to other municipal expenses. The law ensures that funding from state and federal sources add to — rather than replace — money from city governments.

And Robert Greene, deputy commissioner of education for the state of Tennessee, told The City Paper that he believes the law is a credit to this state.

“It’s a good philosophy, and something the state can be proud of,” Greene said.

The maintenance of effort laws are over and above the minimum match rules mandated by the state’s Basic Education Program (BEP). Though the state typically encounters one or two districts each year in which there is a “struggle” to meet the requirements, Greene said, maintenance of effort rules are fairly clear-cut. There’s even a state attorney general position filed on the subject.

In the last year, Tennessee’s maintenance of effort law has been tested in the courts, and so far the law has won. The city of Memphis last year attempted to cut some of its funding to Memphis City Schools, and both the city government and the school system ended up in a legal battle. So far, the courts have ruled in favor of maintenance of effort, but the matter is ongoing.

Council members want more info

Now that Dean has presented his recommendations, the ball is in the court of Metro Council. Council members will review Dean’s proposal and make their own decisions about funding levels for Metro departments, including public schools. In the next week and a half, members of the school board will probably meet with the Council’s education committee to further discuss the budget, Fox said.

Council members already have questions.

Council member Duane Dominy said he wants to know more not only about the stimulus package, but about Register’s restructuring of the central office.

“Right now I don’t think anybody knows what’s in the stimulus package, or what funds we’re going to receive from that. … The stimulus dollars may impact us, but it will be next year or the year after that,” Dominy said. “But a lot of folks are curious [about] what’s going to happen with the central office and the whole reshuffling of positions — how they’re going to be put into schools, how it’s going to affect the budget, if at all.”

3 Comments on this post:

By: Dragon on 5/7/09 at 7:00

FTA - Mayor Karl Dean, at a budget hearing with the district, asked MNPS to try to find ways to use stimulus money to fill holes in the operating budget. School officials, in return, have cited federal rules prohibiting Title I funds in particular from supplanting local dollars.

Gee, Mr. Mayor. Try reading the paper sometime. It is well known that the stimulus funds are prohibited from supplanting state funding. Have your advisors try reading the law sometime.

By: dogmrb on 5/7/09 at 8:50

Don't think the Mayor is slow on the subject of federal funding uses and abuses, Dragon. But inquiring minds would like to know exactly how the school system does use its money and how it continually gets shuffled around. A lot of money has flowed through that system in the last eight years without, obviously, transparent accounting. Who really makes the decisions and whose company benefits? Maybe it's like Topsy and it just grows but at least they are asking.

By: Dragon on 5/7/09 at 9:13

True, dogmrb. I attributed the Mayor's comment about plugging operating budget holes to ignorance, rather than a conscious desire to violate federal law. When faced with a choice between ignorance and malice, I try to give them the benefit of the doubt.