$15 Million Agreement Ends ‘No School’ Threat in Memphis

Published August 9, 2011

School finance disputes have increased nationwide and nearly delayed the start of school in Memphis, Tennessee, where the school board declared shuttering its only option if the City Council did not hand over $55 million. 

“We don’t have the resources right now to open school,” said Memphis School Board President Martavius Jones, a few weeks before school board and city council leaders agreed on a payment plan for the court-ordered funds, beginning with a $15 million down payment on the $155 million Memphis schools claimed the city owed them. Schools in the state’s largest district started on time Aug. 8, six days after the city council approved the system’s 2011-2012 budget.

City of Memphis funds are slated to contribute about 6.5 percent of the district’s $1.16 billion budget for 2011-2012. Memphis schools budgeted about $10,944 per child for the upcoming school year. The system is demanding $155 million from the city in back payments to restore cuts it sued to stop in 2008, which the state Supreme Court has ordered the city to pay because of its obligations to “adequately fund” the district. That amount comes out to $1,456 in extra funds per child. 

In 2008, the Memphis city council decided to cut the schools’ budget by $58 million, Jones said, prompting the school’s lawsuit. In 2008, Memphis public schools spent $9,958 per student, according to the National Center for Education Statistics.

Litigation Increases Nationwide 
School boards across the country have set themselves at odds with state and district councils, fighting to preserve their budgets in a time of falling tax revenues and fiscal disaster.  

Lawsuits are pending in New Jersey, Washington, Colorado, and Oregon between the state and local districts or education agencies over budget reductions. A report released by the Center on Education Policy in June revealed 70 percent of school districts faced budget reductions in 2010 and 2011. 

Finance disputes between schools and local or state government have intensified in recent years, spiking since the recession hit in 2007, said Ryan Turbeville, policy and outreach coordinator at the Tennessee Center for Policy Research.

“Money has always been an issue,” Turbeville said. “In times of recession, [the conflict] has increased more.”

Courts Sympathize with Educators
Schools challenge budget cuts on the basis that they deprive students of a decent education. It’s an old argument, says Paul Tractenberg, founder of the Rutgers Education Law Center, and courts usually sympathize with schools. He estimates two-thirds of the verdicts in the past 30 years have gone in the school’s favor. 

“It’s an easier fight for them to win because of politicians,” he said. “Nobody wants to say they cut education funding. Districts will cut every aspect of the county budget before they cut school funding.”

Legal standards for “adequate” school funding are usually contradictory and pushed by people with a vested interest in increasing taxpayer contributions, said Joshua Dunn, a professor at the University of Colorado-Colorado Springs who has studied school funding litigation.

“Legislatures and school boards are in a much better position to make these judgments, and we should leave it to them,” he said. “They are much more attuned to their communities and know the local costs and available teachers. How much we want to spend on education is a political judgment. The idea that education has been shorted through this political process is completely without support.” 

Doing More with Less
Schools can and should do more with less funding, said Jeanne Allen, president of the Center for Education Reform. 

“This is the mantra charter schools articulate every day,” Allen said. “They were already funded at an average of 30 percent less than traditional public schools before the budget cutting began.” 

With more budget cuts on the horizon, schools are using other means to make up for lost funding, by “passing along the funding deficits to families” through new and higher fees for busing, lunch, athletics, and other extracurriculars, Allen said.  

Turbeville says schools should view downsized budgets as an opportunity to streamline spending. 

“Schools can spend double, but with no results,” he said. “Money does not necessarily equal a better education.”