Suburbs may risk debt for schools

Referendum reaches voters

As Shelby County suburban voters head to the polls over the next few weeks to decide whether to establish municipal school districts, some are concerned that the financial burden will put cities into debt.

Former Millington finance director James Knipple evaluated the long-term effects of running a school system based on numbers that consultants from Southern Educational Strategies used in a report for Millington from March 2012.

While the SES report said the school district would be financially feasible for one year, Knipple’s report determined how much a school district would cost over 10 years. Based on his figures, Millington would be in the red by the second year. By the 10th year, he projects the

city would have a $5.4 million deficit.

“You don’t go into business based on figures for one year,” said Knipple, who retired in 2000 after 26 years as Millington’s finance director. “I’ll be the first to say I would love to have a great school system, but everybody needs to be aware of this other side, the financial side.”

Early voting on the school referendums opened Wednesday at the Shelby County Office Building at 157 Poplar and moves to satellite sites Saturday in Arlington, Lakeland and Millington and to Bartlett, Collierville and Germantown on July 6.

According to Knipple’s report, in addition to using the local half-cent sales tax for schools, the amount of property taxes in Millington would have to increase each year to combat the deficit. He estimates that Millington’s current property tax of $1.23 would increase by $3.40 over nine years.

“I’ve asked the people who support the school system to look at these figures and check my numbers. I encourage anyone to check my numbers,” Knipple said. “They’re so determined that they’re not looking at numbers.”

Similarly, former Lakeland mayor Jim Bomprezzi said he would love for Lakeland to have its own school district, but the half-cent sales tax increase approved last August to support it won’t help the “bedroom community.”

“Other suburbs have the retail businesses needed to make up the cost,” said Bomprezzi, who is running for mayor again.

In July 2012, Lakeland enacted the first property tax in its 35-year history to help fund its own schools. With only one elementary school in Lakeland, it’s possible students will attend school in Arlington and Bartlett until Lakeland can build its own schools, Bomprezzi said.

“It’s going to last until Arlington and Bartlett fill up,” he said. “Do you think they’re going to build a school just for Lakeland?”

Shelby County Commissioner Mike Ritz released his own report in May 2012 addressing his concerns for the fiscal impact of municipal school districts in the suburbs. Although the numbers are dated, the fiscal picture hasn’t changed much in the last year, according to Ritz.

“It could well be they decide to start their school systems with new teachers at new salaries,” Ritz said. “That’s the biggest potential way to save money.”

Early voting wraps up July 11, and the official Election Day for all the suburbs is July 16. According to election administrator Richard Holden, approximately 100 people have voted on the school referendums as of Thursday.