Free Schools?

Unless you just wandered into Loudon County or you've been living under a very large rock, you've likely heard about the Loudon County school building plan. Estimates range anywhere from 50 to 70 million dollars depending on the final decision of county commission as to how much to fund. Then of course you probably also know that a property tax increase will be required for any building program. Estimates are anywhere from a 20 to 35 cent increase.

But wouldn't it be wonderful if the state of Tennessee would just give us the funding for the building plan? No tax increases, no long term borrowing. What a dream. But wait. What if I told you the state of Tennessee has been, is and will continue to give us all the money we need for the proposed building plan?

Every school system in the state receives a large portion of their money from the state through the BEP, Basic Education Program. The state puts in all these calculations based on a system's enrollment, local economy and a few other factors and determines how much money each school system will get. In the case of Loudon County that comes to about nineteen million dollars.

The BEP also includes a payment to the local school systems for capitol outlay, building funds. For Loudon County that amounts to around 3.3 million dollars per year. The payment is based on current floor space, enrollment, construction costs and so on. The formula allows for a payment that would fund a 77 million dollar building program, for twenty years at 6% interest. See BEP worksheet below.

According to state officials, the capitol outlay payment has been in place since 1992 and will continue to be a part of the BEP payment process.

3.3 million dollars per year would be more than enough to fund the entire Phase I and Phase II building plans without any local money. So what's the catch?

Unfortunately, the state allows the local school systems to determine how they use the capitol outlay funds. Past and current Loudon County school administrators and school boards have opted to use their state building funds for general operations, payroll, rather than building schools.

Sadly, now that the state building fund money has become a part of the general operations, it would be hard to ever break it back out. If the board were to decide to use the state money for it's intended use, it would leave a 3.3 million dollar hole in the general fund operating budget. I guess there is always the chance the school board could cut back 3.3 million dollars in it's operating budget but that's not likely.

This is a perfect example of why so many have such distrust of their elected officials.