The resolution to put off consolidation for one year – some fiscal implications

Many of you have asked for some feedback regarding the asking Judge Mays to put off the consolidation for one year. I have some that I would like to provide. Basically, I took the following budget(that I created from a power point  document that I attached in February and created a view for me to study. I had two views: One was if we merged and one was if we did not. Here is a link to the documents I used:

school budget if not consolidated

SCS budget consolidated

Here is what I found and this is an order of magnitude since these numbers may have shifted a little but but it will reflect the impacts. But it is for comparison purposes only.

If we consolidate the system in July, based upon the original numbers(updated for cuts,etc) the district shows a 40 million dollar deficit. Since we have not received transportation plan yet, I cannot include those numbers but we could be down to around 35 million.

If we do not consolidate in July and postpone a year and if we roll back all staffing adjustments,custodial, transportation, central office inefficiencies  etc.  we would be at a total deficit of 124 million based upon the original numbers.

That is a difference of 84 million.

If the county commission, funded a 40 million increase, that would cost .25 on the tax rate. If the county commission funded, 124 million increase, that would cost .78 on the tax rate.

So how does this impact the suburbs?

If the county commission raises our taxes .78 then the entire county will pay a maintenance of effort of .78 going forward to the new SCS schools which cannot go down. This is called Maintenance of Effort.

If we consolidate in July, we have a good chance at a minimal county tax increase which could be better spent on your municipal tax rate than the county tax rate.

If the cc does not give any increase, then we will have to cut. Mostly staff cuts in the SCS and more huge cuts in the old MCS. So there is NO guarantee that we will preserve staffing if we wait a year.

Now, we can try and goad the Memphis City Council into settling on 57 million but I firmly believe that will only happen if we allow consolidation finish this year.


Things for me to consider when considering this resolution. I am looking to get more updated view but this gives me a place to start..

 

 

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8 Responses to The resolution to put off consolidation for one year – some fiscal implications

  1. You are saying that SCS would have a $124 million deficit in 13-14 without consolidation? The entire budget for last year was only $354 million. I must be reading something wrong. Or is that $124 million the combined deficit for both systems? If so, how much of that is just SCS?

    • 124 million combined if we roll back most merger related changes.. We have to realize that we would keep both separate and that this board would continue to manage both districts. And it could very well be that the judge would leave all 23 members in place making it difficult to deal on buildings. I am just saying that we need to consider the potential.

      • wait? the 23-member board would continue to manage both districts? that’s exactly what many of us DON’T want.

        what’s really behind these huge deficit numbers? increased cost, reduced revenue, combo of both? whichever it is, why – i.e. why are costs up so much, revenues down so much? what is the distribution of the deficit in legacy MCS vs legacy SCS?

  2. David: I don’t understand what the “not consolidated” spreadsheet represents – is it the combined budget of both systems?

  3. As Martavius Jones pointed out to me earlier today, the County Commission has not increased funding to either school district since 2007. Both have been using financial reserves and creative accounting to balance the budgets, to the point that there are not enough reserves to do that next year.

  4. Doug says:

    David I am trying to follow you and understand some of what you are saying. I still can’t get over this huge difference in funding and how Millington is taking the brunt of the cuts . All of our schools are title one and have been making huge improvements. I also do not accept the explanation for our cuts at the High School using the 17 to 1 student teacher ratio. They are using smoke and mirrors on this. They are including our vo tech teachers in the count which they do not include in the MCS High School counts. Thanks for what you do and please help me understand.

    • Doug, I am really concerned about Millington and the population loss in its schools, mainly Millington High and how its number continue to diminish. Interesting has been how the number of Millington children have fallen. I hope the muni districts help and I hope Frankie can help the BOA recruit and retain business to help drive growth in Millington.

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