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County schools prepare to lose half-million in state funds

Madison Mathews • Jan 10, 2012 at 11:35 PM

Officials with Washington County schools are working hard to determine the reasoning behind losing approximately $500,000 in state funding.

Washington County Director of Schools Ron Dykes said the loss of funding from the Basic Education Program, or BEP, is just another hurdle school officials will have to come to grips with as they face a number of budget constraints going into the upcoming school year.

The BEP is the funding formula through which state education dollars are generated and distributed to Tennessee schools. According to the Tennessee State Board of Education, the funds generated by the BEP are what the state has defined as sufficient to provide a basic level of education for Tennessee students, which includes both a state share of the BEP and a local share of the BEP.

Dykes said the formula basically takes into account a county’s debt, fiscal worth, average household income and tax structure in order to determine how “financially solvent a county happens to be.”

The problems school officials face with the formula are nothing new, according to Dykes, who added that it’s a problem of which the Washington County Commission is very aware.

“They (the commission) were aware of this in last year’s budget process in the spring of 2010 when I advised them that we were against this situation. That’s not our only funding problem, but it certainly magnifies our current financial hole, so the state has simply stated that the wealth of this county has grown to such a degree that the local government needs to kick in essentially what would be interpreted as more pennies on the tax rate,” he said.

Dykes said he has been told by commissioners the formula is skewed because of the wealth of Johnson City, however, he said that same wealth is spread across the county.

“I think about 60 percent of the taxes from the county come from the city, so they (the County Commission) want to use it in that turn and they want to accept that tax money, yet on the other hand they want to say the wealth is really in the city and we don’t get to take advantage of that in the county, and that’s not exactly true,” Dykes said.

Currently, Dykes said about 48 percent of the budget is funded through state funds and federal funding comes in at about 11 percent. About 40 percent comes from local funding.

Since learning of the loss of funds, Dykes said he has been in contact with the Tennessee Department of Education and Deputy Commissioner Steven Smith about meeting with both the County Commission and the Washington County Board of Education to better explain the formula from the Tennessee Advisory Commission on Intergovernmental Relations, or TACIR.

The meeting is expected to take place next week, Dykes said.

The TACIR model determines the potential ability of local government to fund education, which directly affects BEP funding.

According to the fiscal capacity percentage calculated in last year’s TACIR report, Washington County was the 11th wealthiest county in the state. Despite that ranking, Dykes said the county is near the bottom when it comes to education funding.

Dykes said there is a wider gap now in per pupil expenditure than the county has had in the last 10 years. Last year, the per pupil expenditure in Washington County was $8,098 — $986 below the state average of $9,084.

In addition to losing $500,000 in BEP funding, Washington County schools also face a $1.7 million deficit for the 2012-13 school year. That doesn’t include another $1.2 million in funds being lost from the American Recovery and Reinvestment Act and other special programs.

In total, Dykes said the loss of nearly $3 million in federal funds at the end of this school year will put the system at about “$3.5 million in the hole for 2012-2013.”

There aren’t many options when facing that kind of loss, Dykes said.

“We will either cut services or we will obtain new revenue as a school district, but it would be up to the commission to determine whether we would and if we would, how?” he said.

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