Tag Archives: Gerald McCormick

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Money for Roads but Not Schools?

House Speaker Beth Harwell is talking about using the state’s revenue surplus to fund road projects — but has made no mention yet of how the General Assembly might begin to fund the $500 million+ being sought by school systems across the state in a lawsuit over funding adequacy.

According to the Tennessean:

The Nashville Republican noted that state tax collections continue to exceed expectations, estimating the state could receive $400 million more than anticipated. With talk of a potential gas tax increase floating around the state, Harwell said that extra one-time tax money should fund some of the many shelved state road projects.

Certainly, investing in infrastructure is wise. But, so is investing in schools.

And since the state’s BEP Review Committee says Tennessee is about $500 million behind in funding its schools and since school systems are suing demanding adequacy in light of unfunded mandates like Response to Intervention (RTI2), it would make sense to use some of the new money to begin investing in schools.

Of course, Harwell’s #2, Majority Leader Gerald McCormick, has already expressed his displeasure with school systems seeking proper funding.

The point is this: There’s money to fund some infrastructure projects AND to begin investing in schools — and it can be started without a tax increase.

For more on education politics and policy in Tennessee, follow @TNEdReport


 

 

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That’s a Big Class

According to the Chattanooga Times-Free Press:

Every school district in Tennessee could be part of the Hamilton County Department of Education’s lawsuit against the state’s Basic Education Program school funding formula if a judge grants a motion to grant it class-action status.

“While the larger districts have been the ones voicing concerns about the underfunding of education, this underfunding has ramifications literally everywhere,” school district attorney D. Scott Bennett said.

Hamilton County Schools and six nearby school districts — Bradley, Coffee, Grundy, Marion, McMinn and Polk — are plaintiffs in the lawsuit Bennett filed on March 24 in Davidson County Chancery Court.

The suit claims the state has “breached its duty under the Tennessee Constitution to provide a system of free public education for the children of this state.”

Achieving a level of adequate funding as contemplated in the lawsuit would cost an estimated $500 million. Should the motion be granted, all 141 school systems in the state would effectively become a party to the suit — an unprecedented show of strength in what has historically been small school systems suing over equity. This suit differs from the previous “small schools” suits in that it focuses on the inadequacy of the funding formula rather than on any inequities that may exist.

That’s money House Majority Leader Gerald McCormick says the state can’t afford:

“They are suing the taxpayers, that’s who they are suing,” said House Majority Leader Gerald McCormick, R-Chattanooga.

Fully funding the BEP has been estimated to cost $500 million. McCormick said that would have to come out of existing programs, such as funding colleges and universities, because the state constitution mandates K-12 education but not higher education. And Tennesseans don’t want higher taxes, he said.

Of course, McCormick also supported legislative efforts designed to keep local school systems from suing the state for adequate funding.

A look at three revenue issues reveals that McCormick is just plain wrong in his assertion that addressing BEP funding inadequacy would necessitate higher taxes.

First, state revenues are continuing a trend of coming in over projections.  Andrea Zelinski notes:

Year to date nine months into the fiscal year, state revenues are $444 million more than anticipated.

So, if Tennessee invested 100% of these over-collections into K-12 education, we’d come very close to the $500 million needed to adequately fund the BEP and provide more resources to local school systems to educate their students. Of course, it’s wise to save some of that money, but even a 25% investment would mean an additional $111 million a year for our schools. All with no new taxes.

Next, it’s important to protect the existing tax base. Governor Haslam took a small step on this front this year for the first time in his administration. The Revenue Modernization Act is projected to result in $20 million in new revenue by closing loopholes and helping the state collect the taxes it is owed. This is a start, but by way of comparison, the Bredesen Administration collected $500 million in revenue by aggressively protecting the tax code and ensuring that taxes owed were taxes paid. That is, they went after corporate tax avoidance strategies in smart, effective ways, year after year. It’s estimated that between $30 and $50 million a year in revenue can be protected each year by closing loopholes.

Add the mid-range, $40 million, to the low estimate of new revenue coming in over projections available for use and you’re looking at over $150 million in new money each year for schools over and above current funding levels.

Finally, I wrote in 2014 about the state’s planned loss of revenue. More specifically, the state is phasing out the inheritance tax – a move that has limited benefits but has a definite impact on the bottom line in terms of revenue collection. Specifically:

Additional revenue is lost by the gradual phase out of Tennessee’s estate tax, previously impacting estates over $1 million.  The plan is to phase that out entirely by 2016, with an estimated revenue loss of around $30 million this year and around $97 million in 2016-17’s budget. So, that’s roughly $76 million, or close to half of the projected shortfall for the upcoming budget cycle. To his credit, Haslam says he wants to hold off on efforts to repeal the Hall tax on investment income – a tax paid by a small number of wealthy Tennesseans with investment income.  However, he has also said reducing or eliminating the Hall tax is a goal. Phasing out the tax, as proposed in legislation under consideration this year at the General Assembly, would mean a loss of $20 million in the 2015-16 budget year and an ultimate loss in state funds of $160 million a year and in local revenue of $86 million a year.

If the estate tax was returned to its previous level, it would mean some $97 million in available revenue next year. Policymakers could tinker with this formula to ensure some taxes are collected, but the rate is lower and easily collect $50 million a year in revenue.  Adding these three items together and being conservative, Tennessee could easily invest $200 million more a year in its public schools.

That means Gerald McCormick is wrong. Making significant new investments in Tennessee schools DOES NOT require raising taxes or implementing new taxes. It does require political will and a little hard work.

MORE ON THE BEP:

Money Talks

Shelby County Votes to Sue

Why is he (Gerald McCormick) so angry?

Why is TN 40th?

For more on education policy and politics in Tennessee, follow @TNEdReport

 

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Why is he so angry?

Gerald McCormick is pissed.

The House Majority Leader apparently doesn’t like it very much when the school system in the county he represents sues the state alleging inadequate school funding.

So, now he’s going to teach them a lesson. He’s supporting a measure that is nothing more than a blatant attempt to keep school boards from asking for the adequate school funding they need.

Andrea Zelinski has the story:

Legislators are baking into one of several budget bills a ban on local school districts using state money for attorney’s fees, court costs or other expenses to sue the state, state agency or state official.

“I know you don’t want your own dog to bite you, I understand that part of it. But still, it seems a little unfair if you have a just cause against the state and you can’t have the ability to sue them,” said House Minority Leader Craig Fitzhugh, D-Ripley, in a Finance Committee meeting Wednesday night before lawmakers approved the change on a voice vote.

If the state were to prevail in a legal challenge, the legislation would give the state power to recoup its own legal costs by pulling money out the school district’s education funding, also known as the Basic Education Program, BEP, funding formula. The language would also apply to county and municipal governing bodies suing the state, and would pull from its state-shared taxes if the local government lost.

McCormick is on record this legislative session as saying Tennessee’s public schools have adequate funding. And he’s clearly not happy with his home county suing and asking him to work a little harder at his job.

Note that I bolded that words: If the state were to prevail in a legal challenge.

That’s because every time the State of Tennessee has been sued over school funding, the state has lost. So, local boards probably have nothing to worry about.

In fact, funding now is nearing the levels deemed constitutionally inequitable in the Small Schools III lawsuit.

Of course, the current lawsuit by Hamilton County and six other districts is actually claiming funding is inadequate. That’s a fair claim, at least if you read the reports from the state’s own BEP Review Committee.

And, despite McCormick’s claims to the contrary, the state isn’t even funding its mandates. For example, the Response to Intervention and Instruction (RTI2) program is mandated, but there are no state funds to support it.

Here’s why that’s especially troubling:

…those districts with higher concentrations of poverty (and likely to have higher numbers of students needing intervention) also have the least resources available to assist students.  The poorest districts, then, are left further behind as a result of a well-intentioned unfunded state mandate.

The unfunded RTI mandate is clear evidence of inadequacy and also sets the stage for further inequity in Tennessee schools.

Rather than dig deep and find some solutions, Gerald McCormick and his legislative buddies appear willing to attempt to punish school boards. Here’s some advice: If you don’t want to be sued for inadequately and inequitably funding Tennessee schools, get to work finding the resources to support them and a funding formula that distributes those resources fairly.

For more on education politics and policy in Tennessee, follow @TNEdReport

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Money Talks

Funny how a little thing like a BEP lawsuit asking for more than $600 million can cause Governor Haslam to propose adding a little more money to the education pot.

Yes, seven Tennessee school districts are suing over the inadequacy of the state’s education funding. And, just one week after the suit was filed, Governor Haslam suddenly “found” some $30 million to invest in funding an additional month of teacher health insurance. The state currently pays 45% of 10 months of teacher insurance, but teachers are insured for a full 12 months.

The districts are suing based on numbers provided by the BEP Review Committee, the state group tasked with annually reviewing the BEP formula and making recommendations for improvements.

The idea is that the BEP Review Committee will highlight issues that need attention and help the state avoid additional funding lawsuits.

The reality is that the BEP Review Committee reports go ignored by the legislature and most Governors until a lawsuit is filed. Twice since the original “Small Schools” suit that initially brought about the BEP the state has been sued over funding equity. Twice, the state has lost those equity lawsuits.

Governor Haslam’s administration has said that education funding is now a priority — but that wasn’t the case last year and he didn’t seem to be making any real moves this year until a lawsuit was filed.

Only seven districts are party to the current suit while others continue to debate joining in.

In Metro Nashville, some on the Board have openly suggested a more collaborative approach. I would suggest that after giving Bill Haslam four years to get serious about school funding, the time for collaboration is over. Haslam has created a duplicative BEP Task Force that has the stated goal of rearranging the slices of a pie that’s too small.

When asked about the latest threat of a suit before it became a reality, Haslam said he was committed to doing “something” about school funding, but he just didn’t know what yet.

This $30 million is a tiny olive branch, but far from a serious move toward funding schools properly. And, with legislators like House Majority Leader Gerald McCormick saying Tennessee’s schools are currently properly funded, it’s unclear how much support truly improving the funding situation will have. In fact, at today’s legislative hearing on school vouchers, McCormick took a swipe at school boards, suggesting they should focus on educating kids instead of filing lawsuits.

I would also note that for those on the MNPS Board who want to collaborate with Haslam that he has been supportive of voucher schemes that will devastate public schools, especially MNPS. Haslam’s support of dangerous voucher schemes and lack of any serious effort to improve school funding combined with his legislative leaders taking verbal swipes at school boards means he’s deserving of a serious confrontation — not a collaborative spirit.

You don’t wait around for someone who has never shown an interest in making an effort to see if they suddenly will do something good. You don’t take the coin they toss in the way of some insurance money as evidence they are finally serious about giving you what you deserve.

The bottom line is this: The BEP is broken. 

Bill Haslam has made no meaningful effort to fix it. Until a lawsuit was filed, his administration wasn’t even willing to admit there was a problem with funding for teacher insurance.

Tennessee school districts, teachers, and parents should start working together to insist that the legislature and the Governor develop serious, long-term funding solutions for our state’s schools. If the BEP problem is not fixed by legislative action, the legislature and Governor may be forced to fix it by the courts. It’s long past time for the serious work of making the BEP work for all of Tennessee.

For more on education politics and policy in Tennessee, follow @TNEdReport