New fiscal year

Hopson: Memphis schools have most stable budget in years, but it’s still not enough

PHOTO: Ruma Kumar
Superintendent Dorsey Hopson visits classrooms and students at Snowden School in Memphis.

Shelby County Schools officials are riding high, fueled by a dramatic swing from operating in the red to landing solidly in the black in the new fiscal year that begins Saturday.

But they say the district still doesn’t have enough money to propel students to academic success.

Last year, the school system faced down $50 million in proposed cuts, although not all went through. This year, officials have more than $50 million in new funding to pour into their priorities — which include restoring counseling cuts, growing a slimmed-down turnaround initiative, and raising pay for most teachers.

“It hasn’t been easy. It’s been a process,” Superintendent Dorsey Hopson told Chalkbeat on Friday as another fiscal year ended. “You have to cut and reassess. And as you emerge, you’re able to be more strategic in how you spend your dollars.”

Four main factors contributed to the sunnier financial picture, Hopson said. Enrollment shrunk by less than expected, the county offered a funding boost, bus service was streamlined, and the district closed more than 20 schools in recent years.

Officials say the new spending — which brings the district’s budget to nearly $1 billion — has kicked off a positive cycle that should strengthen the district’s budget picture even more in the future.

“We are making smarter decisions using data … more than we ever have before and that has allowed us to invest back into high-quality learning,” Lin Johnson, the district’s chief financial officer, told county commissioners last week. “As we improve academics, enrollment is stabilizing.”

Still, officials say, the district is only making the most of too little in state funding.

Shelby County is one of several districts suing the state over its school funding formula. The school board also joined an unlikely coalition of education leaders who often disagree on how to fix schools to ask city government to voluntarily contribute $10 million to Memphis schools.

And there remain many positions that have never been restored after the tumultuous period in which the city and county districts merged, then split apart as six municipal districts seceded, said Susanne Jackson, a retired educator and former teacher union representative.

“I think some officials and people in the public may believe these are additions — and they don’t realize how deep the cuts have gone and what had been removed, impacting students academics and discipline issues,” Jackson said. “The inequities that still exist, considering what families have in income and assets in Shelby County Schools versus municipals, are still staggering.”

And with private school vouchers still a possibility in Tennessee, Hopson said the district’s newfound financial stability could be threatened.

“There’s always these unknowns,” Hopson said. “What happens if the voucher bill passes and we lose a bunch of students?”

The county commission, the local funding source, approved the school system’s budget Monday but delayed signing off on the county’s full budget until July 10, after the fiscal year has started. The slight delay won’t affect Shelby County Schools’ spending plan, county and district leaders said.


Colorado schools are getting a major bump in the state’s 2018-19 budget

Students waiting to enter their sixth-grade classroom at Kearney Middle School in Commerce City. (Photo by Craig Walker, The Denver Post)

Colorado’s strong economy has opened the door for state lawmakers to send a major cash infusion to the state’s public schools.

As they finalized the recommended budget for 2018-19, the Joint Budget Committee set aside $150 million, an additional $50 million beyond what Democratic Gov. John Hickenlooper had asked for, to increase funding to schools.

“We believe this is the most significant reduction in what used to be called the negative factor since it was born,” said state Rep. Millie Hamner, the Dillon Democrat who chairs the Joint Budget Committee.

Colorado’s constitution calls for per pupil spending to increase at least by inflation every year, but the state hasn’t been able to meet that obligation since the Great Recession. The amount by which schools get shorted, officially called the budget stabilization factor, is $822 million in 2017-18. Under state law, this number isn’t supposed to get bigger from one year to the next, but in recent years, it hasn’t gotten much smaller either. 

But a booming economy coupled with more capacity in the state budget created by a historic compromise on hospital funding last year means Colorado has a lot more money to spend this year. In their March forecast, legislative economists told lawmakers they have an extra $1.3 billion to spend or save in 2018-19.

The recommended shortfall for next year is now just $672.4 million. That would bring average per-pupil spending above $8,100, compared to $7,662 this year.

Total program spending on K-12 education, after the budget stabilization factor is deducted, should be a little more than $7 billion, with the state picking up about $4.5 billion and the rest coming from local property taxes.

The budget debate this year has featured Republicans pressing for more ongoing money for transportation and Democrats resisting in the interest of spreading more money around to other needs. The positive March forecast reduced much of that tension, as a $500 million allocation for transportation allowed a compromise on roads funding in the Republican-controlled Senate. That compromise still needs the approval of the Democratic-controlled House, but suddenly a lot of things are seeming possible.

“We knew we were going to have more revenue than we’ve ever had to work with,” Hamner said of the status at the beginning of the session. But that presented its own challenges, as so many interest groups and constituencies sought to address long-standing needs.

“The fact that we’ve been able to reach such incredible compromises on transportation and K-12 funding, I think most members will be very pleased with this outcome,” Hamner said. “Where we ended up is a pretty good place.”

The big outstanding issue is proposed reforms to the Public Employees Retirement Association or PERA fund to address unfunded liabilities. A bill that is likely to see significant changes in the House is wending its way through the process. The Joint Budget Committee has set aside $225 million to deal with costs associated with that fix, which has major implications for teachers and school districts budgets.

The Joint Budget Committee has also set aside $30 million for rural schools, $10 million for programs to address teacher shortages, and $7 million for school safety grants.

The budget will be introduced in the House on Monday. Many of the school funding elements will appear in a separate school finance bill.

Going forward, there is a question about how sustainable these higher funding levels will be.

“It does put more pressure on the general fund,” Hamner said. “If we see a downturn in the economy, it’s going to be a challenge.”

What's fair

Colorado’s state-authorized charter schools could get more money next year

Students at The New America School in Thornton during an English class. (Photo by Nic Garcia)

Charter schools authorized at the state level by the Charter School Institute are likely to get more money in the 2018-19 budget year. That’s one year before most other charter schools will see benefits from last year’s charter school funding equity bill.

That bill was a major compromise out of the 2017 session, and it requires school districts to share money from voter-approved tax increases with the charter schools they’ve authorized, starting in 2019-20. The bill also created the mill levy equalization fund to distribute state money to the Charter School Institute’s 41 schools. Because no local school board approved these schools, they wouldn’t otherwise be eligible for revenue from these increases, known as mill levy overrides.

Charter School Institute administrators came calling for their money this year, though, with a request for $5.5 million from the general fund. They arrived at this number by identifying institute schools within the geographic boundaries of districts that already share some extra revenue with their local charters and assuming institute schools got a similar share.

Institute Executive Director Terry Croy Lewis called it a “first step” toward parity that would bring institute and district-authorized charter schools to the same level in advance of the new law going fully into effect in 2019. Lewis said it seemed like a fair approach because the parents at institute-authorized schools often live within the geographic boundary and pay taxes at the same rates as parents whose children go to traditional schools or district-authorized charters.

However, the charter equity bill says that extra money for institute schools has to be distributed on an equal per-pupil basis. The original approach, which created more equity among schools in the same geographic boundary, created more disparities among institute schools in different regions – and the law might not have allowed it.

“I don’t think you can define equity in this conversation because equity cuts a lot of different ways,” said state Sen. Dominick Moreno, a Commerce City Democrat and member of the Joint Budget Committee.

Budget analyst Craig Harper suggested to the Joint Budget Committee that separate legislation might be necessary to allow the distribution proposed by the Charter School Institute, something no lawmakers wanted to see after the bruising fight over the charter school equity bill.

Instead, the Charter School Institute revised its proposal to distribute the money among its schools on a per-pupil basis, regardless of geography and whether the local district already shares money.

What sort of difference does this make?

In the first distribution scenario, Early College of Arvada, located in the Westminster district, would have gotten nothing – because Westminster doesn’t currently share money with its own charters. Under the new proposal, the school would get $131,233 based on its pupil count. Meanwhile, Colorado Early College – Fort Collins, which would have gotten $621,357 because the Poudre district already shares money, would instead get just $374,952

Lingering confusion over the distribution question led JBC members to postpone a decision several times before they voted 4-2 this week to include the $5.5 million request in the 2018-19 budget.

It still has to survive the extended battle over the budget that takes place in the full House and Senate each year.