Tennessee Public Chapter 305, enacted last year, allows the city to give one-time money to the school system and not be responsible for maintaining that appropriation from year to year. That had been the case under what is known as the “Maintenance of Effort Rule” (T.C.A. Section 49-3-314(c)).
Maintenance of effort regulations are unlike rules found in most areas of government. The rules spell out that once a city government appropriates a certain level of funding to a school system, the money can never be taken away, unless the number of students attending that system decreases.
Under prior state law, Johnson City’s $600,000 appropriation for one-time funding would have become a long-term commitment. And in times of revenue shortfalls, it would have meant the city would have to maintain that increase.
The law also requires the school system and city to provide the state with a written agreement regarding how the non-recurring funds will be used. Public Chapter 305, or SB 612, which passed in April 2013, states that “Before any such agreement takes effect, it shall be subject to review by the department to ensure the non-recurring nature of the expenditures.”
“We already had set our priorities on what to cut, and that was done last week when we cut about $1.7 from out budget,” said Kathy Hall, Board of Education chairwoman. “As far as the $600,000 in one-time money, it is open for our use and not only for capital equipment. We will be meeting Monday to look at saving some items that would otherwise have been cut, including athletics, art and music and academic coaches.”
Superintendent Richard Bales was not immediately available for comment.
City Commissioners also agreed to “backup” the school system with an additional, and guaranteed, $600,000 if tax revenues fall short of projections in fiscal 2015.
Commissioner David Tomita last week introduced and amendment to the existing financial plan for the city, which had been reorganized by Commissioner Jeff Banyas. Two attempts to pass a property tax increase failed, and Tomita’s plan took hold.
Basically, it keeps the nearly $205 million budget as was passed on second reading, but includes pulling more than $1.3 million from the city’s street resurfacing fund. The city will use this money to help prop up the school system’s budget and issue a capital outlay note to replace the money originally earmarked for resurfacing.
The Athens, Tenn., School Board believes the relatively new state law could cause problems when it comes to future funding. Its members passed a resolution which stated that, while 305 “has merit for its attempt to control Maintenance of Effort growth,” not requiring local governments to apportion funds could be harmful to and would “take money away from” city school systems and special school districts.
Meanwhile, Johnson City Board of Education members will meet with city commissioners tonight to discuss funding a future progress of a new 12,600-square-foot field house to be positioned at the southeast corner of Kermit Tipton Stadium facing the football field.
City commissioners gave architect Tony Street the go-ahead in January to complete the design of the maroon and gold structure and to handle the bidding phase of the estimated $2.1 million project.
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