The Tennessee Court of Appeals ruled against the city of Memphis Wednesday. A day earlier, the Memphis City Council put off a vote on school funding pending direction from the court.
"We agree with the attorney general that the city is obligated to contribute to the funding of MCS as a local government," the court said in an opinion written by Judge David Farmer.
"As the attorney general opined in 2005, the city cannot effectively amend existing law and legislate the MCS out of existence as a special school district by reducing funding," the court wrote. "There is nothing in the Memphis Charter or in the general statutory provisions to suggest that the city is not obligated to fund the MCS."
The ruling clears up a gray area of several years marked by squabbling between school superintendents, mayors, and city council members over who owed money to MCS and, if so, how much.
The total proposed budget for MCS for the 2008-2009 school year was $932 million. The board of education requested city funding of $93 million, or 10 percent of the budget. The city council approved a budget providing $27 million.
The shortfall could result in homeowners receiving an additional bill for more taxes.
Revenue from local sources, the court said, must equal or exceed prior year actual revenues, excluding capital outlays and debt service, and adjusted for decline in enrollment. This could put more pressure on MCS to accurately report its enrollment, which has been stated at various times as 103,000 to 116,000 in recent years.
"The decision is a blow to the taxpayers of Memphis who must continue to shoulder a disproportionate tax burden for education in Shelby County," said City Council Chairman Harold Collins.