Thursday, February 18, 2010

Clock Ticking Down on Budget and Schools

Posted By on Thu, Feb 18, 2010 at 2:15 PM

Next week's Memphis City Council meeting could be a doozy.

On the agenda: an updated budget forecast and funding options for Memphis City Schools.

And unlike previous talk-talk meetings, this time the council may have to make a big decision or two about tax increases, pay cuts, and spending reserve funds.

The council meets next Tuesday. In the morning, the Budget Committee will get a second-quarter budget forecast update. It is likely to show that tax collections are down for local government as they are for state government. If the council follows through on proposals to take $30 million out of reserve funds to pay schools obligations, then it is effectively starting "down $30 million."

Options include taking back some of the 5-percent raise for city employees in 2008 and the 3-percent raise in 2009, restoring the 18-cent property tax cut that passed in 2008, and adding additional pennies and dimes to the tax rate — the highest in Tennessee — to cover current and future expenses. There is talk of layoffs in the hundreds of employees. Mayor A C Wharton opposes taking back the raises.

Another option that appeals to some council members is forcing public-private agencies or "quasi-public" agencies that get city and private funds to become more private.

In the afternoon, the council meets in executive session to discuss funding options for Memphis City Schools, including the "30-10-10" option proposed in January by Councilman Jim Strickland. That would take $30 million out of reserves, plus $10 million in budget cuts, and $10 million in debt forgiveness, for a total of $50 million for MCS. That still leaves this year and next year's MCS budget.

Council members are likely to press MCS to justify its enrollment number and explain why its budget and number of employees are increasing while enrollment is declining.

"I don't know if we can get seven votes (a majority) for anything," a council member said.

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