Two fixes for budget standoff

New money sources - BEP and cigarette tax - may resolve groups' jam

June 9, 2007

An infusion of more than a million dollars from Tennessee's cigarette tax increase and education reform plan could solve the 2007-08 school budget impasse between the Loudon County Commission and school board.

The schools will submit a new budget to commissioners Monday that is still $1.1 million more than what the commission wants to approve. However, an additional $1.34 million in state funding could be provided through Gov. Phil Bredesen's cigarette tax and reform of the Basic Education Program funding formula.

Over the past weeks, the County Commission and school board have been locked in a battle that has resulted in charges of overspending by the commission and threats by the board to cut school athletics and bus transportation.

The extra money in the budget from BEP 2.0, as Bredesen's reform plan is called, could help break the deadlock, said Nancy Paule, chairwoman of the school board's budget committee.

"We've told the commission that nothing else can be cut that doesn't directly affect the education of the children," Paule said.

The budget that will be submitted to the commission Monday still will contain some of the most controversial cuts, including school athletics and bus transportation, Paule confirmed.

Without additional funding from the commission or the timely arrival of the BEP funds, the school board will only be able to provide the basic services needed for education, she added.

"We think bus transportation and athletics are important," she said. "We also think music and art are important, and we will have to cut those as well."

The County Commission is pleased to learn that additional revenue from BEP 2.0 could be available for the schools but still is not convinced that education in the county is underfunded, Commissioner Don Miller said.

"The County Commission is not the one suggesting to cut athletics and transportation," Miller said. "It's up to the school department to decide how to work within the budget."

Commission already has provided a 7 percent increase for schools from county funding over the previous year's budget, Miller pointed out.

The total revenue provided to the county's schools from all sources - local, state and federal - for 2007-08 is just more than $34 million, a roughly 5 percent increase from the $32.4 million provided last year, he added.

"I would certainly hope that with the additional funding from BEP 2.0, we can settle this," he added. "If not, I would be very disappointed."

Although the $1.34 million preliminary figure would cover the $1.1 million shortfall, it still is not clear how the school board will be able to use the funds, Paule said.

"Some of the funds could be earmarked for special programs," she said, such as English language learners.

The biggest challenge to working within the budget has been the addition of unfunded state and federal mandates, Paule said.

"Last year we hired nine teachers to meet these mandates, and we really needed twelve."

Miller argues that the budgets that have been submitted contain more positions than just those needed to fulfill unfunded mandates.

"They're asking for 54 new positions," he said.

The county, which raised property taxes two years ago, will be faced with the need to raise taxes again in the next two years to fund a capital improvements plan that could cost well over $100 million dollars in the next 10 years, he said.

"How many times can we raise taxes?" he asked.

In addition to the increased funding from BEP 2.0, Miller says he sees hope in projected increases in property tax revenue from new retail and residential developments in the county.

Many of the new homes being built at Tellico, for example, bring in substantial property tax revenue, while the "empty nesters" that typically purchase those homes do not place a burden on the schools, he added.