Behind the Headlines – May 24, 2013

Behind the Headlines – May 24, 2013


This is a production
of WKNO – Memphis. Production funding for ‘Behind
the Headlines’ is made possible in part by.. Tax rates and the consolidated
school district tonight on ‘Behind the Headlines’. ♪♪♪ I’m Eric Barnes, publisher
of the Memphis Daily News. Thanks for joining us. We’re joined tonight by members
of the county commission and the consolidated school board
to talk about tax rates, the budget and what comes next. I want to welcome Mike Ritz. Thank you, glad to be here. Thank you for being here. Tomeka Hart from the
unified school board. Thank you for being here. Thank you. Billy Orgel, head of the
consolidated school district. Thank you very much. And Wyatt Bunker also
from the county commission. And Bill Dries, senior reporter
with the Memphis Daily News. I’ll start with
you Chairman Ritz. We have a budget. We’ve had a couple of budget
proposals come from the school district– One that asked for
some hundred and 40 million dollar increase back
in the early spring. That was, I think.. That never really got to us. That never really went very far. But now there’s one that’s
basically– They need about $30 million. Is that a reasonable number and
is that a doable number given the tax situation, the
reappraisal year and so on? Well I think the 30 is a very
reasonable number given the circumstances they’ve been in. It’s less money than they were
spending between the two last year. And given everything, I think 30
million is a reasonable request. But the real big issue is are
there enough votes to get that 30 million. To do that, we would need on
the tax rate of nine votes. On the tax rate. On the budget, we
would only need seven. But when we get to the tax
rate– And I’m not sure there are nine votes to do that. Nine out of thirteen? Right, because it takes a
two-thirds majority to have a tax rate that’s
greater–increase greater than 10 percent. And in normal years, that
probably wouldn’t be such a difficult problem because the
reappraisal– We’ve got a bigger challenge. And because just to
keep revenue equal, we’ll get in to this. But just because of the
reappriasing year to keep revenue equal, the tax rate
needed to go up to– What? 4.33, give or take? 4.32, there’s a 30 cent exact
which is exactly seven and a half percent of the ten percent. And where would it need to go
to get the $30 million for the schools, give or take? Probably about 30– 43 cents. Okay, so up to 33
cents I think would do it. Commissioner Bunker,
what’s your take on this? I mean, are the votes there? Is your vote– Are you in
favor of this kind of increase? Absolutely not. We have to remember what’s
good for the tax payers, is good or Shelby County, is
good for Shelby County school and what’s bad
for the tax payers, bad for Shelby County. And it’s bad for
Shelby County Schools. If we increase the
taxes on the tax payer, we’re going to increase
our unemployment rates. We’re going to
decrease our tax revenues. When’s the last time that
you ever heard anyone that was planning on locating a
business in Desoto County say, “Whew, now that I see they
increased the tax rate in Shelby County by 36 cents, I think
I would rather go there.” Never happened and
it’s not gonna happen. And so if from
that point of view, if the moneys not there,
you see the tax increase. What would you like to see cut? Because I guess you go back
to the school system and say, “You’re going to
need to cut something, that $30 million, because we
don’t have that $30 million to give you.” What do you think
they should cut? Well one of the things that we
did the other day while looking at the budget was kind of
spot check their budget. There were some e-mails that I
got about the budget– Some that were factual, some that
were proven not to be factual. When I did that spot check,
one of the things I found, you know, I was just looking
in to a little salary on one position. And it happened to be
their security head paid $159,000. He was originally paid $175,000. But $159,000, has 140 employees. That showed. I looked at that and I saw
that as a sign that they need to review maybe some of their
salaries across the board. Maybe their administrative. They were extremely
administrative heavy. When I was on the school board,
they cut– They professed to have cut 26 percent of
their administration. Do we need to look at
more cuts in administration? Their focus now has been, “Well,
we need– If we cut anymore, we’re going to have to
cut in the classroom.” I have a hard time believing
they have to cut in the classroom when they have a
security director being paid $159,000. Think about it. The mayor of the county
always paid 155– 158? Yeah, 145. So he’s paid $145,000. The highest elected official in
West Tennessee that represents a million people, paid $145,000. He’s paid $14,000 less than
their director of security who hires 140 security guards. Chairman Orgel, I mean
if the moneys not there, if the tax increase
can’t go through, if the county can’t somehow come
through with the 30 million that we’re talking
about, what can be cut? Well, I mean, I’ve got to
give our superintendant and our deputy superintendant Hopson a
lot of credit in their cabinet of staff and the board because
they worked pretty hard to get down to a figure that
we think is reasonable. We’re $75 million less than
the combined school system last year. Arguing about one salary– If
you took the 70 top positions and took their average
salary and cut 10 percent, you’d cut less than a million
dollars out of the budget. So it’s small. It’s almost like arguing over
what paper you’re going to use or what stock
you’re going to use. And I think they’ve
done a great job. They’ve cut back 26 percent
of the positions in salary. It’s not alleged. It’s actually what’s in the
budget through the combination. And I think the largest thing,
we’ve outsourced custodial, outsources transportation. We’ve gone to the unions and
said we’re not going to pay either way. And we’ve cut the
benefits of the teachers. And I challenge all of the
elected officials on other bodies in this community
to go take on the unions, to go cut salaries, to cut
benefits and to cut their budget. And I haven’t seen that being
done anywher but the school board. And we don’t have taxing
authority and we can’t raise revenue. If we don’t have
the $30 million, I think– And there’s
going to be a list. And Superintendant
Hopsons already said it. If we level up to the classroom
size from the city of Memphis former school system and
use that across the county, there’s about $28
million in savings. So if we got zero
from new revenue, that’s what’s going to happen. And it wasn’t a threat. It’s what– It’s the only place
eft to cut other than 50,000 or 100,000 here which will
never add up to the $30 million. That’s the big ticket item which
is increase classroom size which will be fewer employees, fewer
teachers and larger classrooms. And is that? Get you in here, Tomeka. That– I mean for a year now, as
long as this has been going on, people have said, the
superintendants have said, I think many if not all the
school board members have said they wanted to assure parents
that your classroom wouldn’t change, that your teacher
would still be your teacher. The classroom size
would be about the same. All of this change can go on but
the classroom itself would be unaffected by all this. Do you see? I mean of what we’re
talking about here, is there a way to avoid? If the $30 million doesn’t come
from the tax increase or some other funding source, is there
a way to protect the classroom? No, I mean the
budget that we presented, even in it’s bare
bones, does that. It protects the classroom. So if we’re not able
to get that 30 million, no. We’re going to have to. That’s the only other
place that we could go. I mean we’ve made changes
across the entire sector. When you’re talking about all of
these different departments and I think that it’s absolutely
ludacris and petty to look at one person’s salary. And you’re not even
making fair comparisons. There’s an employee on
Shelby County who makes $104,000 and six people report. So let’s not be petty
and talk about salaries. We can cut the $159,000. But that still does not get
us anywhere near $30 million. And so I think it’s time to
take personalities and personal positions out of this
and look at this budget. I mean the truth of the matter
is we have had the same level of funding from our
county funders since 2007. Since 2008, both districts have
been funding itself out of it’s savings. Both districts–
Shelby County is. Shelby County has floated
its staffing formula by using savings. It doesn’t have the
money to do that anymore. That’s the bottom line. So the issue is not that
we’re spending too much. It has now become
a revenue issue. And the only way to address a
revenue issue is to either get more revenue or you cut. So.. Are you sympathetic to though
to what Commissioner Bunker says about the negative
impact of increasing taxes so dramatically? Absolutely but you’re going
to pay one hand or the other. I mean so if that’s going
to increase unemployment, guess what else is getting
ready to increase unemployment? When we have to
let go, you know, hundreds of teachers
because we have to cut. So it’s all one bucket. I think in this community from
all sides of this community, we keep forgetting that it’s
still one community– Right? It’s still one group or pairs. So they’re going to pay
one way or the other. And the unemployment is gonna go
up because we’re going to have to let people go. Because isn’t that back
to what you said before? Isn’t that part of when you talk
about the economic development question, the
company that’s going to, you know, locate in Memphis or
Germantown ro Desoto County. Yes, they’re looking at taxes. But another thing they
look at is education. Is it a skilled work force? Is there a high
enough drop out rate? Are there people there I
can hire for my company? They do look at that. They look at all those factors. But the cost of doing business,
the cost of the tax rate– Unless you’re a big
business and you can get pilot, you can get your tax abaited. You’re a small
business in Shelby County, expenses– What it costs to do
business in Shelby County is a big, big driver in
where you decide to go, where you decide to
locate your business. Let me tell ya. When we go to the school board,
we do get somewhat flippant attitude about, you know, “Oh,
this person is picking on one person.” I don’t know this person. I’m not picking on anybody. You know all I’m doing is
picking one salary out of a host of salaries that I
conceive as out-of-line, alright. Let me remind you. We got this budget when we
walked in to the meeting. They didnt’ present
this budget any too soon. When we walked in the
meeting, we got that budget. Let me tell you the main way to
determine the performance of a school system. The best way to determine the
performance of a school system is to look at their
per-pupil expenditures. That includes any of those
reserve funds that you were talking about, Tomeka. It includes all of that in
your per-pupil expenditure. Why is that Shelby County
Schools can provide more teachers, better salaries for
their principals and so forth? They can provide more of that in
their classroom than Memphis can with more money? Let’s get answers. What’s the answer
to that question? One– You look at over time
the Memphis City School legacy system. You had neighborhood schools. And you look at the high
school size in Shelby County. I think our largest high
school– Germantown might be one of our largest high schools. But most of them
have excess of 2,000 students in them. You don’t have that in
the city of Memphis. You’ve also had a deep
population of certain areas. So we know this and Tomeka
and I have been through this. And we’re going to
have more of it. And we’re sorry to the
citizens of this community. We’ve de-populated
parts of the city. We’ve got buildings and we’ve
got resources dedicated to those buildings. So it’s more efficient to have
Whitehaven or have White Station or Houston High
School with 2,000 children in it is to have
another smaller school with four or five-hundred kids, 300 kids. Also you have more offerings. So we’ve got to come to– Some
of the facilities committees met this week and to discuss it. But we’re going to have
to close some schools. It was part of the TPC plan. And that’s part of the reason. It’s more expensve to educate
when you’ve got an additional principal, additional
assistant principal, additional staff and another
building to take care of. And so there’s going to
have to be some contraction. And I think that adds to it. Bill? Let me expand on that. Let me translate that
for ya just a little bit. That is the failure of a school
board that Tomeka served on to do what needed to be done
years and years and years ago. Yeah because I mean all
of this is ridiculous. If we were not merging, guess
what Shelby County Schools would be?– In deeper trouble
than they’re in right now. I mean this merger is actually
saving Shelby County because we are trying our best to not
have to gut that system. They can not afford that system. What Memphis has done from the
beginning realized when we had to cut, we could
not afford to keep, as much as we wanted to, we
couldn’t afford to keep that rich staffing level because
we could see down the road. You don’t have the
money to afford that. And Shelby County is
at that point now. So without this merger, they’d
be in more trouble because they didn’t have the money as a
system alone to afford it. So you have to decide who’s
making the better decisions. But I’m so tired of us and them. At this point, we’re a school
system and we’re trying to do right by all of these children. But that’s the same
question I’m asking. Why can’t Shelby County–
Why can’t Williamson County do better than Shelby County
and they spend less money. It’s a ridiculous question. While we appreciate
y’all’s thoughtful rescue, we would prefer to be a
part of our own system. And that seems inevitable
that that’s going to happen. Let me come back to
you, Chairman Ritz. That you know the municipal bill
was passed in the state house. And so we’re going to have a
year of consolidated school system. Pretty obvious
that the counties, the suburbs are going to break
off in to their own systems. There’s talk that
you’re in conversations, about to start conversations,
with suburban leaders about that. What are those talks going
to be about– buildings? What? Well as you know we’ve– Two or
three of the commissioners met with the suburban mayors in
negotiations in the November through January time frame
over what they wanted to do with respect to charter schools. They were going to go
to charter schools. I think what they now obviously
see that they with the state law changes they can
probably get municipal schools. So they want to come back down
to negotiate with us because they don’t want the county
going after them under equal protection issues. That is their main
emphasis, of course. And what can be negotiated there
are equal protection issues assuring from the standpoint
of the county commission that there’s compensation for the
building because the worst problem for us– The fact is
essentially the Germantown situation. It’s not as bad in
the others by far. But in Germantown
they’ve got eight schools. But they’ve got an
84-hundred students. More than half those students
don’t live in Germantown. So if over a period of time that
municipal school system gets those eight schools but quits
educating the kids that don’t live there– Most of them
live in unincorperated Shelby. Then the county commission
is going to have to build new schools. And I think there’s going to be
a great resistance to building schools for students that
essentially are the unified school board. No one’s quite sure how they’re
going to pay for the existing schools and
existing school building. That’s right. Let me get Bill in. We’ve talked a lot about $30
million and the impact of that on the tax rate. Mayor Luttrell has come up with
a plan to create $20 million with the idea that the school
system would come up with the other $10 million either
reserves or a combination of reserves and something
off of the priority list. So let me start with
Commissioner Bunker. Is $20 million more palatable or
any less objectionable than $30 million if the school system
comes up with $10 million? Yeah, it’s less
objectionable than $30 million. And $10 million is less
objectionable than $20 million. And $5 million is less
objectionable than that. Let me say this about the
concerns about Germantown or any other suburb
housing empty seats. Uh, it doesn’t make sense. The money follows the
child in education. So is that suburb really going
to be willing to have empty seats in their classroom
and not be paid for them? They’ve got to
provide a teacher. They’ve got to heat and air. They’ve got to clean
that square footage. It only makes financial sense
to fill that seat with a child. So if those seats are empty, I
assure you they’re going to be motivated to work on a deal with
the county on filling that seat. We’ve had mayors of
various suburbs on. They’ve always said that it is
their intent to have those kids from unincorperated
Shelby County in the schools. Now I guess it
remains to be seen. But that’s what.. And as a matter of
fact, they said that. Let’s be honest. The mayor of Germantown said
that if we don’t meet them then we have to
determine what happens. I mean so let’s just be fair. So there’s some people who
actually really want the county to do right by all children. That’s whether there is
50 schools sytems, one school system. And so I’m ready for us to
start having that conversation. I am so sick and tired of us and
them and let’s do right by some and not right by all. We need to sit down. If the
municipalities are forming, we need to have an
intelligent, adult, grown person conversation around
what buildings do you need, how do we work this out
together as a county. And if they reached out
to you, Chairman Orgel, on the suburban leaders–
Because there’s going to have to be conversations about.. I mean back in the day there
were conversations about shared services and so on. It absolutely– Tomeka’s right. It absolutely makes sense. And I’m going to assume that
Commissioner Bunker is not on the side that wants to
keep filing lawsuits. I know Chairman Ritz has been on
the side that has been involved in negotiations. And Tomeka’s right. And I’ve said this all along. Take the $3 million plus that
everybody spent on legal fees. We’re all one county. And you take our pre-school and
pre-k debate and that’s about 55 classrooms that could get funded
for a year for all the money that suburbanites and the county
commission spent on lawsuits. I think we could all sit down
at a table and work it out. No one wants to give
away the buildings. Chairman Ritz, I believe they
belong to the Shelby County School Board. Some deal needs to be
worked out–Some accomodations. Old buildings, you’re in
real estateor in albatross. You don’t want them. There’s deferred maintenance of
$10 million on Germantown High School. So some of that stuff is
going to have to be worked out. And Millington, I
think, in your district, Commissioner Bunker, is another
one that’s got some issues. But we’ve got to work
better as a community. Commissioner Bunker said it. The tax rate in suburban
Nashville is about 4.40, 4.45. If you live in suburban Memphis,
it’s uhh– 4.02 plus 3.23. So whatever. Give or take a few cents. The tax burden is too
great in our own community. So we’ve got to work
together as Ms. Hart said. And you tried to
say it, Mr. Bunker. But we’ve got to come together. We need to sit around like
this, work out the issue, quit sueing each other. It doesn’t matter. We all need each other. And you pointed it out. Speaking of needing each other,
I want to try as gingerly as I can to go back to $20 million
plus $10 million from the school board. We don’t want to
talk about that. That’s why.. (laughter)
Mr. Chairman, if it’s
$20 million on the tax rate, do you, not to put this crudely
but just to get right to the point, do you need
Commissioner Bunker’s vote? No, no. Mr. Chairman– Go ahead. Let me explain. Up until last
Wednesday, a week ago, we had not heard from the mayor
any support for the schools system that the
county commissioned. So there’s a great deal of
concern on the county commission what the mayor was
going to do for schools. He surprised us. And I’ll say pleasantly
surprised us frankly when he said one–They found 11.6 which
is a rather peculiar thing to happen in government these days. I’m still hoping to find that. I’d like to find
that in my networth, too. And then he suggested on
top of finding the money, which is great– Glad they did. But he propsed a six cent tax
increase over the certified rate to provide the 20. So essentially what we’re
dealing with at the moment is a tax rate to get to the certified
rate of 30 cents plus six cents for the schools. That’s 36 cents. I don’t need but
seven votes to get that. Now the question is are
commissioners going to be willing to go more than 6 and
20– six cents on the tax rate, 20 million for schools. And I think the problem now is
that some of the commissioners are running for election next
year may find it difficult to get past what the mayor
recommended because they feel very vulnerable to
being criticized. And let’s go to you. I think a question Bill
was going to have for you, Chairman Orgel. Is there 10 million somewhere if
the county can come up with 20? Is there 10 million? Like this county, can you? We got a little bend up
from what happened last week, too. I think the state
funding for it with the BEP. The Basic Education Plan came
back and it– There was about 4.8, 5.8 million dollars. And it even lowered it again. So I think we’re always
looking for efficiencies. It’s tough. I can tell you in the
past, people probably didn’t. Now we’re in a have to stage. I think Ms. Hart, myself,
22– 21 other board members, we’re committed to doing it. And every opportunity we’ve had
to cut something in our budget, we have done it. Okay. Let me say
something about the BEP. The additional money from
the BEP– I heard that is $10 million and that your
cut was $5 million. You came from $35
million down to $30 million. And that the increase in the BEP
from the county finance chief financial officer in the
county– He said it was $10 million additional for
the BEP, Good source. That’s how rumors get started. Exactly and rumors get started. And then people go on TV and
state a misfact and didn’t realize that they were wrong. So the nine million that
you may be referring to, we’ve explained that at the
meeting– That the nine million is money that used to
pay for teachers cola. And as we explained it, the
state has given a waiver from the district. The district requested a waiver
to use that nine million to harmonize Shelby County teachers
raises salaries increase so we can harmonize. Memphis City
prinicpal’s salaries increased. Speaking of found money, there’s
still an open question I believe about whether the city of
Memphis–I’m not sure who to turn to because we don’t have
anyone from the city of Memphis here. But I’ll put it on you. City of Memphis, is there any
chance of getting money from them? There’s talk. You know, there’s
outstanding negotiations, debate. Does the city owe the old
school system 60 million. They think they’re owen
money by the school system. Have you guys had conversations
with anyone from the city? Yes and Superintendant Hopson
has led the charge on that. And he has been even when he
was the attorney for the school system and not the acting
superintendant or the interim superintendant. And I think that we’ll
see a resolution of that. I know it’s a long time
coming for Tomeka and the board. But I think we’ll
see a resolution. Do I think it will be $57
million just in my opinion? Probably not. Will it be paid over time? Probably. But it’s like any other funds
whether they’re stimulus money or anything else. It’s temporary. So I don’t think you
need to rely on it. I think it could plug a gap for
a number of years which will be good. And it would have been in
reserves anyway had it not– Had it been paid five
years ago, six years ago. And let me come back
to you, Chairman Ritz. We talked about the
suburban schools breaking off. And if we go back to when
they originally propsed to do something, there’s been a
lawsuit and all this stuff. They had some
budgets they put together. They had an outside group. And you raised a lot of
questions about how realistic those budgets were. Do you think? I mean, I assume you
haven’t changed your mind. No, in fact, Germantown’s
raising their tax rate to 30 percent and there’s
nothing in it for schools. So they haven’t even thought. I mean 30 percent increase this
year and nothing for schools. Uh, I think– First of all,
I want to take a minute to compliment our
acting superintendant, Interim Superintendant Hopson. He’s done a wonderful job of
communciating with the county commission. And I want to thank the school
board members that are here. And the public should
know how cooperative. You did a wonderful job
yesterday in presenting the budget. There are a lot of things going
around in the community about the state money. There were three
parts of the state money. They raised the BEP
budget for the whole state. Then there’s a cola thing. Then there’s the state’s holding
back money because of the ASD schools. You could look at that thing any
way you want to look at it and say anything you want about it. Come to you? It’s very confusing. With just a couple of minutes
left– Commissioner Bunker, you represent the suburbs. Back to this question. The suburban
schools are going to, you know, they’re
going to formed. Do you think that the tax burden
on suburban residents is going to go up once these
school systems are set up, that so far they’ve been
unrealistic about how much this is really going to cost? It probably depends on what
suburb you’re talking about. I can tell you that probably
yes for some and maybe no for others. Maybe yes for all of them. It’s really going to depend on
what happens with the capital improvements. I mean there was a presidence
set years ago adn I don’t know how they explain it. The city schools were given in
over 40 schools by the county. They weren’t required to retire
the bond debt on those schools. Now every one is singing
of the same song book. We don’t– No one agrees in
giving the schools away to the municipalities. What we– Not only do we
pay our proportion of that. We pay more than that. We broke it down. The trustee broke
it down last year. The county tax
payers are paying 25-, $30 million or whatever to
education than what they get out of education. Okay and just one
minute left here. We mentioned, Chairman
Orgel, Dorsey Hopson, the interim Superintendant. He was only going to be
in there for a few months. You guys ended the search. Are you trying to focus
your search on one man, Dorsey Hopson,
for the long term? We didn’t end the search. What we did was we thought
it was very difficult to hire somebody in this
environment where we’re merging, possibility that
the board goes down, goes back up, municipal schools. And I think we’re
pretty fortunate. Tomeka would probably
agree that Dorsey stepped in. And we just basically said, “Can
you guys–Can you stay in here a l”ittle bit longer? “Let’s hold off the
search for a little while. “Let’s get settled
down, calmed down, “see what happens.” And he’s done a great job. I think this
happened in Houston. When I think– Was
it Rod Page, Tomeka? He was on the school board. He wasn’t a career educator
and became the school board chairman. Yeah, I think they
planned for him to be. (laughter)
Tomeka, would you
like to see Dorsey stay longer or just for this one year? Well I’m always in
support of a search. I think that search helped
you find who the best person is where ever they are. Well we are done. Thank you all for being here. Thank you. Appreciate it. Thank you for joining us. Join us again next
week, goodnight. ♪♪♪ Closed Captioning provided by
WKNO – Memphis.

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