One thing is clear after the long debacle that resulted in Thursday’s $12.5 million deal between the Washington County and Johnson City commissions: Tennessee has no clue how to equitably fund school construction projects.
Capital financing is just one aspect of why this state needs a complete overhaul on how it funds education, but it’s the prime example of why conflicting statutes and tax distribution lead to conflicts, inequities and inaction.
State Sen. Rusty Crowe and newly elected Reps. Tim Hicks and Rebecca Keefauver Alexander surely have been paying attention to the royal mess that resulted in the short shrift just handed to Johnson City taxpayers, families and schoolchildren. The ball is in the Legislature’s court to end these shell games.
Washington County will get a much-needed new school for Jonesborough-area students through a clever and unprecedented switcheroo between the county and the town of Jonesborough. Jonesborough issues the bonds for the new school. The county pays off the bonds through “lease payments” to the town, thereby giving it a run around its obligation to share bond proceeds with Johnson City on a per-pupil basis, which would have meant a $28 million contribution to city students. All county residents, including city residents, pay the taxes that fund those bonds.
Johnson City also has capital funding needs because of the growth in the student census, including such projects as the current expansion at South Side Elementary School and the proposed replacement for 54-year-old Towne Acres Elementary School, an outdated and poorly designed facility.
The county successfully backed Johnson City commissioners into capitulation with the $12.5 million in hush money — take it or fight it out in court, where you just might get nothing.
City commissioners were right to take the deal. As much as it frustrates them and the members of the Board of Education, a court battle would have served no one. The lack of precedence for Jonesborugh’s third-party intervention makes a lawsuit a gamble. The odds likely would be in the county’s favor given court rulings that allowed counties to use cash in lieu of bonds to fund construction. Of course, city residents could still come together to file suit on their own. It happened before with bond funds, and the residents won.
The best news is that Jonesborough-area students and teachers will finally have a modern facility to meet their needs. The somewhat good news is that Johnson City has $12.5 million with which to work.
The bad news is that city residents would have to be taxed again to make up the $15.5 million shortfall if the city proceeds with more elementary expansions and the Towne Acres replacement. Claims that the county’s scheme saved taxpayers money hold water only for those who live outside the city’s limits. City residents already pay extra property taxes to enhance their schools and other aspects of life here.
The city’s sales tax revenue provides some advantages, and non-city residents also pay that tax when they shop and dine here. But that same sales tax pays for the roads, parks, street lights and other infrastructures used by everyone regardless of where they live. Without the city’s tax base — both property taxes and sales taxes — Washington County could not afford to operate a school system at all.
Consolidation is not the answer. It would bring a whole host of other issues, including the taxes necessary to create a common standard of funding.
The Legislature has the ability, however, to fix this problem with a single clear and concise capital funding law. Lawmakers should remove the cash loophole, prevent third parties from building schools and create a construction funding structure that treats all students in a county the same.
Ultimately, the state needs a complete overhaul of all education funding that prevents inequities among districts and raises Tennessee’s funding standards to national averages. But that’s a topic that will take much more time and thought than fixing the construction chaos.
Crowe, Hicks and Alexander must remember that they represent every family in Washington County, including those with children in Johnson City schools and the taxpayers who pay the bills.