The Sky is NOT Falling!
It is not often that a city manager takes the time to write an editorial, but I think this is one of those times.
These past two weeks, I have been working with new School Superintendent Bruce Borchers in reviewing a notice he received from the State of Tennessee that the financial formulas for required school funding have not been met by Oak Ridge. This principle is known as maintenance of effort.
Oak Ridge is one of the few school systems in Tennessee recognized as a city system. The school system is a “department” of the city for budgetary purposes.
Our school system has maintained itself through the years as one of the premier school systems in the state, and citizens here pay much more than the minimum requirements for school maintenance found elsewhere. However, with ups and downs of sales taxes and reductions in some state funding categories, the school and the city have found themselves calculated as coming up short in the statewide formula. This is the problem that Superintendent Borchers and myself find ourselves working together to resolve. With a solution, we will take that to our respective City Council and School Board.
This is technically to be resolved by Oct. 1, but a meeting is being set up with the Commissioner of Education in Nashville in the coming days to review the situation.
Due to an additional $289,513 in sales tax adjustments added to the schools budgets in the 2012-2013 budgets, this raises per-pupil revenue to $6,290, the goal that must now be reached by our school. This may have been caused by an addition of “outside city” sales tax retained by the schools and not transferred to the city as had been in previous years for high school debt.
General decline in sales tax in Oak Ridge and Anderson County has also affected finances. This is why you hear many organizations encourage residents to shop at home when they can.
However, once a dollar amount goes up, the state formula never allows current funding and future funding to go down below the established dollar amount for the school system, or it is found out of compliance. Our current budget this 2013-2014 budget year sits at $6,234 per pupil. The school, and ultimately the city, have been advised of this $56 difference per pupil.
Oak Ridge has a city charter that prohibits the city manager and City Council from interfering with financial matters and revenue projections of the school. But we are now involved because the city is the only source of revenue for the school to obtain additional dollars to gain compliance. We are working hard to resolve this, so state funds are not at risk.
The city’s decisions on adding more monies are decisions that are final, and ultimately impact all future community services. According to the State of Tennessee calculations, we must always maintain the $6,290 per pupil level that is documented in budgeted numbers. The school has identified some adjustments to reduce the difference, but the final balance must be considered by the City Council.
We perhaps have the best school system in the state and will continue to keep it so, but like all of us on a budget, we have to determine how we can afford everything that is asked of your city government services and your city schools. We want to do the right thing!
Mark S. Watson is Oak Ridge City Manager.