Behind the Headlines – April 28, 2017

Behind the Headlines – April 28, 2017


– [Female narrator]
Production funding for Behind the Headlines is made possible in part by
the WKNO Production Fund, the WKNO Endowment Fund, and by viewers like you. Thank you. – Major changes in
state and local taxes, the future of education funding, and much more, tonight,
on Behind the Headlines. (uptempo symphony music) I’m Eric Barnes, Publisher
of the Memphis Daily News. Thanks for joining us. I’m joined tonight
by Laura Kebede, Reporter with
Chalkbeat Tennessee. Thanks for being here.
– Thank you. – Bill Dries,
Senior Reporter with the Memphis Daily News, and Bernal Smith, Publisher,
the New Tri-state Defender. Thank you all for being here. Bill, the biggest story
of the week, of the month, maybe even the year,
the Improve Act, the gas tax, as some called it, got passed at the legislature, and it’s not just a gas tax. It’s a huge shift,
it is primarily about transportation funding and
road projects and so on, but there are a whole
lot of other parts, but summarize the bill, and then we’ll talk about
some of the politics and the impact on all of
Tennessee and on Memphis. – It is Governor Bill Haslam’s
centerpiece legislation for the current
legislative session, possibly of his second
term of office as governor, and it begins with the
premise that the governor had that we need to do better
in terms of road funding, we need more tax revenue,
wound up being the solution. So it’s built around
a hike in the gas tax that will be phased
in over several years. Along with that, frankly,
in order to get the votes in the legislature to pass it, there were tax cuts that were
involved outside of that. Franchise and excise
tax, a roll back of that, a continued and even
accelerated rollback of the Hall tax on dividend
and investment income. You also had some
money that went back into the state road fund to
replenish money that was taken out and used for other
purposes over the years. So what you’ve got is
a net reduction overall in the entire set of taxes
that are involved here for the gas tax hike, which
will go to fund road projects and fund them quicker. – There are what,
some 962, almost 1,000 road and bridge projects
that they’re talking about a big backlog over 10
years taking, as Bill said, the money that was
taken from the road fund some years ago when
things were tight. There were also, and I think
Bill may have touched on this, Bernal, there were
cuts in food taxes, and that was important to a
whole lot of the Democrats. The few Democrats that are
left up at the legislature really wanted to see, look,
if you’re gonna increase taxes on the working people
and people trying to get to a job, also wanna
see taxes get reduced on the kind of things
they don’t pay, working folks don’t
pay the Hall income tax on interest and dividends,
but they do pay food taxes. – I think they found a
way to make it a balanced, fair piece for both
wealthy families across the state, as
well as middle-income to lower income families. I think that was a great thing. I think the thing to
credit the environment for though is that the state is
sitting on a $2 billion surplus, and with that being
considered, I think that there were some who said,
hey, use the surplus to fund these things
but I think given that the state is in a
much better position to implement these
kinds of cuts, as well as gradually
implement this gas tax, that’ll help fund these much,
much needed road projects. – And the governor’s position
on this had been that we don’t know when the
next recession might come, we don’t know when our
revenue projections might not meet expectations,
and right on cue, right after this
bill was passed, it was a done deal, they got
some March revenue figures that did not hit projections. Now they didn’t hit
projections for some reasons that were unrelated to
the overall performance of the state’s economy,
but nevertheless, it was kind of an
I-told-you-so moment that yes, this can happen and it
has happened in the past where the state hasn’t met
its revenue projections for more than a year at a time. – And that is revenue that is
primarily off of the sales tax that we will pay
on most everything. Haslam said, and
I saw him speak, and he said this
for a lot of people, but I saw him speak at a
group, at a national summit maybe a month ago and he
had said this over and over that as coming to the end of
his term, his second term, he’s term-limited out. He looked at it and
said, “It’s not popular, “but if I don’t do
it, the next governor, “probably not gonna do it in
their first four years. “Who wants to pass a tax
increase of any sort, “even if it’s offset and think they’re
gonna get re-elected,” and so it would be, his
calculation was four, five, six years down the road
before anyone would do it. It’s also interesting, and
you talked about the political deal-making and the trade-offs, it happened in a way
that made a lot of sense. People may not like
certain things about it, they may not like paying
more in gas taxes, but they’re all this
kind of horsetrading. There are a lot of
democratic votes. There’s a lot of that
sort of what I think of as more of the kind
of classic deal making in the legislature
versus this is a Republican super majority, we’re gonna get done
what we wanna get done, and we’re gonna impose it
on everyone, like that. I didn’t happen that way, and again in contrast to
say, Insure Tennessee the Medicaid Expansion, which
just got shut down quickly in subcommittee and
never had even a chance like this one did. – Well I think the change
in political environment, particularly and when you
look at elections coming up in ’18 and ’19, people are
looking at the environment that is there and I think
it really requires a balance ’cause I think the
pendulum will be swinging somewhat back the other way, particularly what’s going
on at the national level, and so I think
you have legislators even at the state level that are looking at it and
saying, hey, where can I find a balance that represents
all of the constituents that I represent,
whether I’m a Republican, a Democrat, I wanna go
back and serve again and get elected. So I think we saw that
particular bill sort of reflect that balance
looking forward. – You also had a
real division among the Republican majority
over this whole question of whether or not to use
the $2 billion surplus to do the road projects
and just pass on any gas tax hike. You had the Republicans
who were opposed to us who were called the fire
and brimstone caucus and you also had some of the
democratic minority members in the House particularly
talking about R on R crime, that is Republicans who were
openly disagreeing on this. – And you had a lot of
disagreement between, some real frustration, I
guess I should say with the Speaker of the
House, Beth Harwell, who was not as supportive,
who from some peoples’ point of view changed her mind. Mark Norris, the Majority
Leader from Collierville, likely candidate for
governor, Harwell, possible candidate for governor, that was a whole
backstory about how people were handling, and you
can see Mark Norris, out there saying we
did tax reductions. He’s using this and
not unjustifiably, but he’s using it as
the beginning of kind of campaign fodder, right,
I mean, things he did, he cut taxes on
working folks in terms of their food taxes. This whole franchise
and excise tax changes, which we’ll talk
about in a minute, is very important
to the business and economic
development community. So you saw the politics
of not just Republicans, but also the upcoming
governor’s race and all the House and
Senate races playing out. – A lot of campaigns start
really with the passage of this vote and I think
the tension between the House and Senate
Republican leadership also goes back to some
tensions that were there earlier when the legislature
took up the governor’s Insure Tennessee version
of a Medicaid expansion. There were some really visible
tensions on the surface over how that all played out. – Yeah, we’ll come back to
the franchise and excise tax and some of the other things
that are not necessarily in the headlines,
and the Improve Act, but I wanna get
Laura in, and we’ll stay at the state level. You focus on education. Some people aren’t
familiar with Chalkbeat. You’ll been around for what,
four years in Tennessee. You’ve been in Memphis
for a year now, I think you told me. We run your stuff. I think maybe sometimes you
guys picked her stuff up. Yeah, Tri-State
Defender does as well, and it’s great, all
education-focused. So from your point of view, we’ll stay at the legislature. What has been
happening this session that is of real impact
to Tennessee schools, specifically to Memphis schools? – I think something that
we saw even yesterday was that as a result
of all the stuff that we’ve been talking
about with the gas tax, legislators were tired. (laughs) It was a fight, and so when the voucher bill that was meant to be
a pilot in Memphis for low-income students
to go to private schools with about $7,000, they had to roll it. They were like, you know what? We’ve done our due
diligence this year, and we’re gonna roll
this to the next year. So I think even
something like that even has a connection
to what’s going on here in Memphis and education. – Yeah, it does. A big bill like that, and
they always talk about it being a heavy lift,
it’s a heavy lift ’cause it’s a tax vote. It’s also ’cause
there’s so much to it, and there’s so much time, and they have this idea
that they wanna get out of there by
the end of April, barely into May. So the Voucher Bill,
which was proposed, I believe by Senator
Kelsey of Germantown and his variations have come
up long as I could remember. – The governor has a version. – The governor has a version, didn’t pass again,
that pilot program. I believe there’s changes
to the charter school, the way the charter
schools operate, and I don’t know how
much you’ve covered that, but it’s not wholesale
changes, but I think, what, a hundred-something
charter schools in Tennessee, the many, many charter
schools in Memphis have all operated under
a law that was passed, I think in 2002 and
some updates to that. Any thoughts on where those
changes to charter schools come from, the charter
school legislation? – Well, a lot of it is
reflective of what’s been happening at the local level. Starting last fall, last summer, there was a coalition
of people from the charter sector, as well
as Shelby County Schools to come together and say, hey, we have a lot of issues
that we need to work out because of the law in 2002
left a lot of open doors and things that we
need to figure out the details on of how
we’re gonna operate. And so the state was listening
in on those conversations, even the authorizer
fee of saying, it costs the district to
oversee these 45 schools, even that conversation, which
was included in the bill that passed yesterday, made it into the final bill and started in
those conversations. So it ended up being
a lot of a reflection of what was already happening
on the ground level. – And when we talk
about charters, you have to also then
talk about the ASD, the Achievement School District, which has been under fire. It’s been under fire from
the day it was proposed. It’s been under fire since then, but you had Antonio Parkinson, a local House member
calling for the abolition of the ASD, get rid of it. That didn’t happen, but
clearly, you’ve got this tension and I’ll go
to you first Bernal. I know Bill has written
about it as well. It’s always been there
between the iZone schools, which is the Shelby
County schools’ effort to raise those bottom, those
underperforming schools and has shown some
real progress, the state’s program, the ASD
or Achievement School District, often done through
charter schools. Where is that now? Where is that tension now
and with what’s going on? – I think it’s very interesting. ASD has certainly
had it’s struggles. Some of it’s authorizers, they’ve walked away
from about three schools that they just couldn’t turn
around for whatever reason, but I thought it was
really interesting that Superintendent Anderson
basically clarified how a school under
ASD can be returned to the local authority. So if they’ve got two
years where they improve, two consecutive years
where they stay essentially off the list, then the
local school district can get the school back or this
is a very interesting thing is that if they continue to fail over the same period of time, then they might say,
hey, we’ve tried, we’ve done what we could, and so I think that
clarification helps because I think at one
point, if you looked at it, a school could be under
ASD and to perpetuity. – When would that end, right. – Exactly, so I think
that clarification is certainly a step
forward relative to understanding ASD’s role. The interesting thing
though, I think is that the state Board of Education
now has essentially become another school district with one school that they have
responsibility for in Memphis and one in Nashville,
and so how they’re able to now manage schools
from Nashville in Memphis will also be
an interesting component. – And what’s important, I mean, there are a lot of
important parts of this. There’s local control,
there’s state control, there’s intervention,
but there’s money, right Bill? The money goes with the child. So however much in state
funding, if that school comes out from under the Shelby
County Board of Education and goes into the ASD, the
money goes with the child, and that’s something
that school board, Dorsey Hopson, the
Local Superintendent, has dealt with for
all of these years. – Yeah, if you look at
what the environment was when the Achievement
School District began in the 2012-2013 school year, the ASD had much more
autonomy at the outset, and that’s not to
say that they used all of the autonomy that
they had because certainly there were discussions
with what became Shelby County Schools about
how this would all work, but there were also
some cases where the ASD basically went in and said,
we know you object to it, we’re taking the
school over anyway, and now you’ve seen
more of that flushed out with the State
Department of Education and the Every Student
Succeeds Act playing more of a role in this
in terms of oversight. – Your thoughts on all this? – Well, I think the
biggest turning point for the ASD this year has been
that even though the state still calls it its most
intensive intervention for low-performing schools, the ASD has lost a
lot of power too. With Every Student Succeeds Act, it says that, well,
Tennessee’s plan to implement that federal law is
that the district, the local district
will have more time to try to put in their own
turn-around initiatives before being considered to be in the Achievement
School District. – If it’s your first time
on the bottom 5% list, then the local school
district gets a crack at turning the school around before they resort to the ASD. There’s also been a state
Attorney General’s opinion just recently that says that if the Achievement School
District takes over a school, it takes over that school. It cannot add grades to it. – Which is a hugely
limiting factor. I mean, for better or
worse, it is a limit because a lot of the programs
of these charter schools, whoever the controlling body is, they wanna start and then
they wanna add grades that then adds
money, but it also, they say, well we’ve got
these kids succeeding in our sort of program, now
we wanna have continuation. So there’s a lot of factors
in that AG’s opinion, I’m glad you brought that up, was a huge impact on how
these people operate. – Because there are
existing extensions that are out there. In Frayser where you
had the ASD come in and do a direct run of
Westside Middle School, those students were
moving into what was then Frayser High School, which was
still a Shelby County school, and the ASD said,
we’re hearing from parents that they really are
apprehensive about sending their children out of our school into a Shelby County
School’s high school, and so, we want
to create a 9th grade academy out of all of this. Well the Attorney
General’s opinion says, you can do that without the
school district’s permission, and just this past week, the school system’s
legal advice on that was essentially that we’re
not gonna act on that, which by the state’s
interpretation means that the ASD does not have
permission to do that. – Yeah, still on that topic, I remember years ago Laura,
and just to get your feedback on this, when Chris Barbic
was the original head of the ASD, he’d been kind
of a much, sort of rock star in the industry, I think
in Houston and Texas, had done a bunch of
charter schools in terms with the Yes program. He comes in under Haslam. We had him on the
show numerous times, and we had he and
Dorsey on once or twice, and I remember
Dorsey was talking, and they got along great and they talked about
how the iZone schools had their model, and the
ASDs, and both of them said, if nothing else, and
I’m paraphrasing, it creates competition,
competition that wasn’t there, competition for
teachers, competition. Chris Barbic said look,
“If Dorsey’s iZone schools “outperform mine, that
just makes me wanna work that much harder.” How much, as you
cover education, do you see this competition, do you see the competition
between schools for students, for teachers? I mean, is that a real thing or is that just something the
superintendents talk about? – I think the enrollment
aspect, absolutely, because the enrollment
aspect is tied to the money that the schools get
and if you want to have these robust turn-around
programs you have to have more money than what a
normal school would get that’s doing fine. So, that just feeds
into each other, and when the ASD came, it
wasn’t, a lot of the contracts kind of assumed that
they would have a surplus of students, that we would
have to have waiting lists, and we’d have to figure out
what we’re gonna do with that, but when they came to Memphis, they realized over time,
which is kind of what Gestalt found out with
Humes and Klondike. – [Eric]
One of the charter operators? – Yes, found out that
enrollment is a real issue here. So that turned into
a whole game changer of how they’re approached,
but enrollment, absolutely and Shelby
County Schools has been a lot more aggressive in
even just this past year of how do we, in this
environment, retain students, but I think one thing
that’s really interesting to me is that in
Chattanooga, especially under the new law,
is that the state is proposing to have more
of a partnership district of the state will partly run it, but it’s also in collaboration
with the district, which is an entirely
different environment than what we’ve had
here, and a lot of people would say, if you had
tried that in Memphis, maybe it wouldn’t be as
high-competition that it is now. – Right, right. There’s a thing on education
that I wanna touch on, but we have less
than 10 minutes left, just seven minutes left and let’s talk about
the city budget. That then got back into a
conversation about education, but Bill, the mayor has
put forward his budget. It’s about a $680
million budget. It’s against a backdrop
of an improving economy. The city is not flushed
with cash in the same way that the state of Tennessee is, but it is a different
environment than certainly three, four, five years ago. – Yeah, the budget that
Mayor Jim Strickland has proposed is about
$12 million larger than his first budget in
the current fiscal year that we’re in now. All of that is really
funded by revenue growth, better tax collection,
more tax collection. The sales tax, in
particular is a harbinger of what the economy is doing. There was a call by a
coalition of citizens and organizations involved
in local education that included Chris Caldwell, the Chairman of the
Shelby County School Board for the city to fund
Shelby County schools. Basically, half of the
money that the group called for for in-school
programs, half of it for out-of-school programs, and the mayor said
basically, I got this letter after I had already
put the budget to bed and he also further told
the group in writing in a response that we
had a referendum here in 2011 in which
city residents voted to surrender the charter
of Memphis City schools and implicit in that
decision that was made in the referendum was
that city residents did not want to be
double-taxed to pay for public education here. – It was an interesting
thing, Bernal. I thought we settled
that issue. (laughs) We did a lot of
shows on the issue, we wrote about it,
you wrote about it, but I guess, the
economy gets better and people say, hey, we wanna
put more money into education. – I think there is a
sense of strong value around improving public
education and outcomes for our students here, and
I think that the request is valid, particularly
when you look at what’s happened with
all other municipalities in Shelby County.
However, the mayor made some valid points
relative to the money that’s already being invested
in after-school programs, and things to support
student’s summer programs, and those kind of things
where real dollars are being allocated. I think they were asking
for about $10 million that the city would then
allocate towards education, but I think clearly,
the mayor is saying, hey, we’re
demonstrating our values by allocating this money
and we wanna do more and I think he set
the precedent of going to the private sector to help
support some of these things as he did with the police
department raising that– – Yeah, he’s touted the youth
program, the youth jobs program, tremendously successful
outcomes in terms of getting kids on a great path, but they don’t have
enough money to do more. So they’re trying to go
to the business community and get involved
in this program. He talked about opening
libraries on Fridays, and things that affect
youth that isn’t directly in the classroom, but
it is youth-supportive through the city budget. – It supports
educational outcomes and helps expose our children
to positive environments. – I think that what
underlies this too is that the coalition actually said
this could be administered through a non-profit,
which it seems like a minor point, but it’s
a very important point because if it’s administered
through a non-profit, it would mean that the
city is not on the hook for maintenance of effort,
which is the state law that the city ran afoul
of in 2008 when it cut funding through
Memphis City schools. – Other highlights on
the budget beyond that? I hate to say it, it’s a
brilliant-at-the-basics budget, which was his slogan when he
ran, but that’s what it is. It’s potholes, it’s
increasing pay for police, and it’s trying to,
as they like to say, restore the police
numbers back to something like 2300 or 2400 from the 1900, but there’s nothing sexy. There’s no big flashy
stuff in this budget. – He’s sticking to it, but
with the economy improving, there is a whole
lot more pressure on his administration
to go outside of the brilliant-at-the-basics
borders and try to do more. So he’s feeling more
heat in that regard and will probably see
some more calls for that in the budget
committee sessions, which start next week. – Do you think that will
play out in terms of, to be fair, this
whole St. Jude plan, which is about to be
implemented under his watch is about as big and
impactful a project as Memphis has seen. It’s huge, all through
the Pinch District, the plans for the riverfront
that are underway, I think they do want
to try to push back that there are some big
picture things going on that aren’t just brilliant
at the basics, right Bernal? – I think when you look
at the project relative to expanding the
Convention Center, exploring a
Convention Center hotel, expansion of the Pinch District, all of those types of
projects, even the MLK project near Clayborn Temple,
those types of things, I don’t think anybody
can really take objection to the city putting real
dollars behind those types of things. – And I will say too that the
changes, which we touched on that are kind of embedded
in the Improve Act, the Gas Tax Act, the
changes in the franchise and excise tax do open the door, according to the Economic
Development people in town to major, major change. There are huge
manufacturing relocations that didn’t happen in Tennessee. The governor’s
talked about this, other people have
talked about it, at least one in the
Memphis area, maybe two that didn’t happen because
our taxes aren’t competitive with other southern states We’re talking
thousand-person type hiring with lots of add-on facilities. So that may happen under
Mayor Strickland’s watch. He certainly lobbied
for the gas tax, the Improve Act to happen. We’ve got just maybe
30 seconds left. Am I right with this, and
I’m gonna put you on the spot with no time left, that the
Shelby County school budget, back to that for a second,
is a little bit better than they thought
and Dorsey Hopson has a little bit more
money to spend? Is that correct? – Well, yeah for
the past few years, the news has been
there’s a deficit, we need to figure
out how to fill it, and this year, they said,
here’s a balanced budget and a lot of that had to
do with what happened year of getting more funding
from the county commission and it had a lot
to do about finding inefficiencies in
the budget as well, but it was a
combination of those. – About $21 million.
– [Eric] About $21 million? – Yeah.
– Okay, alright. Other thoughts, there’s
a bill that went through. We had some really
dark laughter about it. Well, I think I’m out of time. So I can’t go through
it, but there’s a lesson, read about, read
what you vote for a lesson to legislators, read what you’re voting for. So anyway, we leave it there. Thank you all for being here. Thank you for joining us. Join us again next
week, good night. (uptempo symphony music)

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