School funding dilemma
Jeremy Nash
With Loudon County Commission unanimously passing the 2015-16 fiscal year budget this past week, which includes Loudon County Schools’ $37.7 million funding plan, Board of Education members can now focus on whether they will leave the budget with a $2.1 million deficit in the fund balance or look to reduce the overage and shore up reserves.

Earlier this year, the board agreed to pass a budget with a $2.1 million deficit and solicit additional funds from Loudon County Commission, a request that was ultimately denied. Commission voted to pass the county’s budget without a property tax increase and with no additional property tax allocations for the school board.

Director of Schools Jason Vance, speaking for the school board during a recent commission workshop, requested an additional 4-6 pennies in property tax revenue, which would have amounted to about $640,000 generated for Loudon County Schools.
“I think one of the things we need to look at is at a whole when we get back is look and see exactly what’s needed because I didn’t vote to send the 2.1 down (to County Commission),” Bobby Johnson Jr., board member, said. “I thought it was ridiculous sending that much money down. I think we’ll somewhere along the lines amend it for around a $1 million in there, possibly $800,000 to $1 million I’d say. That’s what I’d look at as far as need.”
Vance said the school board wasn’t in a rush to make any changes to the budget, if any, before at least the next school board meeting in August.
“I would anticipate that at some point in time, like I said, that the school board’s got a fiscal year that they can address this through budget amendments,” Vance said. “I would imagine they’ll probably want to be a little bit more conservative as compared to aggressive.”
The $2.1 million shortfall originally included the ability to give teachers a 4 percent raise, a 2 percent step increase, funds for additional expenditures regarding operational costs, along with four science, technology, engineering and mathematics instructors. Sticking with a 2 percent raise will free up $409,173, and doing without four STEM positions will save $233,380, according to a document Vance presented to County Commission at the June workshop.
“Commission gave us the option of taking money out of fund balance if we choose to, so (that) option’s on the table,” Johnson said. “We can use our fund balance. Really in my mind it’s not a rush to say because they approved what we sent down.”
BOE Chairman Ric Best said he would like to see the director present the board three figures, including $1.2 million, $1.6 million and $2.1 million, and let members work with Vance to prioritize important elements in the budget. Best said a special called meeting in July was being discussed. He said that meeting “probably” will not occur this month.
“I personally am not in favor of using the $2.1 (million) figure because it would dramatically reduce the amount of fund balance reserves that we have,” Best said. “Now with no new money, no maintenance of effort money — now we were grateful that we received the growth funds from the county. We hadn’t even received those in several years, but it’s a matter now to decide how much of a deficit we want to incur to draw down from our fund balance.”
Best said initially the $2.1 million deficit was designed to show commissioners what it would take to operate a budget without a deficit, along with giving teachers a 4 percent raise.
“Present operations I think it would be very difficult for our director to present budgets to us after two years that operated a deficit,” he said. “I think we’re going to be under the minimum required by the state. A lot of times those minimums are lower than you really want fund balances to go, so I think the board would really like to not let that balance go under $3 million.”
BOE Vice Chairman Scott Newman said he thinks the school board should stick with the $2.1 million plan. “I can’t speak for the other board members, but I say we’ll go forward the way we had it planned, the way we voted on it because that’s — as a board — that’s how we felt that we needed to go forward, and that’s how we needed to make sure to for next year to run our school system the way it needs to be,” Newman said.
Staying competitive
Newman said he also would be in favor of giving teachers the 4 percent raise as a means to become more competitive with surrounding school districts.
“Here’s what happens is every time we try to step up and catch up with the other districts, man, they go up, and it seems like we can’t make any ground on them,” Newman said. “The thing is ... it’s a hard situation because we’ve also got to live within our means too.
“... If it was up to us, we’d have the highest paid teachers in the country, but the tax revenue we have, just you can’t do that,” he added.
Earlier this year, Gov. Bill Haslam asked all school districts to increase teacher salaries by 4 percent.
According to the Tennessee Department of Education, differentiated pay for a Loudon County Schools teacher with a bachelor’s degree and zero years of experience is $35,202. Lenoir City Schools teachers start out at a salary of $36,412. After five years, Lenoir City’s pay jumps up to $38,838, while Loudon County salaries increase to $37,603. After 10 years of experience, Lenoir City pays $41,552, while Loudon County Schools compensates teachers at an amount of $40,604.
During the June meeting, school board members agreed to give a 2 percent across-the-board raise to all employees in the district. Vance said that percentage would go into effect unless board members decide to modify the vote.
“I do not anticipate that will happen at this point,” Vance said. “There was some conversations about implementing a percent raise and then maybe doing some type of compression. However, without new funding I don’t believe the board will go that direction. They may not do anything at this point in regards to amending the budget and simply let it roll into fund balance at the end of the year.”
Vance said the school board will have to “bite the bullet” at some point and fund teachers more than it has in the past, noting the “right way” might cost the school system $500,000-$600,000. The school district should receive about $400,000 in monthly installments from the state.
“I think at some point in time we are going to have to bite the bullet and really fund teacher salaries greater than what we have in years past,” he said. “And I don’t know exactly what number that might look like, but the bottom line is we’ve got some great teachers that are leaving us to go to counties that pay them more, and so we’ve got to figure out a way to try to stop that and try to make sure that we’re retaining our best and brightest folks.”
The next school board workshop is scheduled to take place at 6:30 p.m. Aug. 6 at the Loudon County office building. “I think that in a challenging budget year that would be the fair thing to do is to least do 2 percent,” Vance said.