Ritz: Schools ‘train wreck’ dilemma looming

Commission, mayor warn of shortfalls

Budget shortfalls estimated at from $90 million to $180 million related to the city and county school merger will drive the need for higher property taxes just as property values have gone down for the first time, Shelby County Mayor Mark Luttrell said Wednesday.

At the University Club, Luttrell told the Kiwanis Club of Memphis that he didn’t intend to “sugar coat” the county’s economic situation. “We have serious issues that are facing our county. Issues that require aggressive leadership and collaboration — issues like education, crime, blight, access to health care, Juvenile Court reform, government inefficiencies and lack of job growth.”

The biggest “looming challenge,” he said, is the schools budget. And Luttrell warned after the Kiwanis meeting that the unified school system is going to have to take responsibility for major cuts “without just handing the issue off to the County Commission.” The district estimated Monday its budget is short by at least $80 million and that to fund an ideal school system would add another $95 million to that.

Luttrell said he plans to meet later in the week with Shelby County Schools Supt. John Aitken to get a better understanding of the school district’s budget numbers and needs. He said that earlier this week County Schools Asst. Supt. Tim Setterlund estimated a $157 million gap between revenues and expenses if the unified district continues to operate as is. When board member Tomeka Hart asked about an ideal school system with no budget constraints, Setterlund said that would add another $95 million to the budget. Added to unfunded budget requests, a $95 million request would up the total funding request to the County Commission to about $180 million.

Luttrell said even the $157 million gap would increase the city tax rate from $4.02 to $5.52 per $100 of assessed valuation. Outside the city, the rate would go up to $5.56, he said.

County Commission chair-

man Mike Ritz said Wednesday that school board members need to recognize the funding constraints of the county. “I don’t think it helps for the school board to go around talking about money that they will never see.” He said the county missed its chance to help cover some school costs when it voted down a halfcent sales tax last year, and he said Luttrell was one of the biggest opponents of that proposed tax.

Now, Ritz said, the school system is going to have to make major cuts, including the closing of up to 20 schools.

“That also means no salary increase for county employees.” Ritz said the school system can come up with $ 60 million in cuts, and he said it should not expect the County Commission to be able to raise more than $60 million in additional revenue for schools through property taxes this year.

Ritz had warned when Shelby County’s suburbs proposed their own school districts the costs would be far higher than consultants’ estimates. He called the new funding dilemma a “train wreck” and said the school board will have to come up with proposed cuts before formally presenting its budget. “We don’t cut. We give them money,” he said.

Luttrell’s talk was a “state of the county” address in which he said the county has lost privatesector jobs in the last five years. “We have also seen the outmigration of people every year and with that we lose net income and dollars that would be spent in our local economy.”

In answer, the city and county have recruited major employers like Electrolux and Mitsubishi and have worked closely with small business incubators, universities and the state to improve job readiness.