By Ernest W. Carter and Jim Mitchell
On June 18, 2013, a report
was published which questioned the financial ability of the City of Millington
to establish and maintain a municipal school district. The author of that
document, James Knipple, admitted in the report that his “…knowledge of school finance is very limited.” Further, Mr. Knipple
encouraged “…anyone to check my numbers.”
At the request of several
Millington citizens and elected leaders of the City of Millington, the Knipple
financial projections have been carefully reviewed for errors in facts or
assumptions. Two individuals, Ernest W. Carter and Dr. Jim Mitchell were asked
to conduct the review. These individuals are very experienced educators and
have extensive knowledge of Tennessee school district finance. Their conclusion
is yes, the City of Millington can afford to operate its own municipal school
district.
Ernest W. Carter is a
lifelong Millington resident and a Millington Central High School graduate. He
also holds both Bachelor’s and Master’s degrees. Mr. Carter served Shelby
County Schools (SCS) for more than 33 years, including 12 years of service as
the Chief Financial Officer and Assistant Superintendent for Business and
Finance. He successfully developed and administered the entire school
district’s annual operating budgets. In addition, he expertly managed the school
district’s day-to-day business operations with average annual operating budgets
of more than $250 million.
Dr. Jim Mitchell served
Shelby County Schools for almost 34 years, including two years as principal at
Millington Central High School, 9 years as Assistant Superintendent for
Operations and 5 years as Superintendent of Schools. During the years of
Carter’s and Mitchell’s service, the Shelby County School District operated
with annual balanced budgets and annual operating surpluses. Unfortunately, neither
Mr. Carter nor Dr. Mitchell was consulted by Mr. Knipple prior to the release
of his report.
The Knipple report contained the following errors in
facts or assumptions:
- Assumption-Revenues will increase at 1% per year. Incorrect. The Tennessee Basic Education Program (BEP) provides the single largest source of school district revenue. By state law, the BEP revenue amount sent to each local school district is adjusted up annually for inflation. Other school district revenue sources also are expected to increase. An “assumption” of 1% revenue growth is not appropriate.
- Assumption-Salaries and fringe benefits will increase at 1.5% per year. Incorrect. This assumption would mean that both the Millington Board of Education (MBOE) and the Millington Board of Mayor and Aldermen (BMA) would have to approve spending 50% more than the amount of revenue they had available. Tennessee law requires the local school board to submit a balanced budget each year. The BMA has final approval of the school budget and sets the local property tax rate. The local school board will not have the authority to levy any taxes or set the local property tax rate. Only the BMA has that authority.
- Assumption-Millington would have to pay extra to establish a teacher retirement system. Incorrect. All teachers currently pay their share into the Tennessee Consolidated Retirement System, and no additional premium must be paid to create a new school district.
- Assumption-Health insurance premium costs will increase at a rate that is 100% more than the assumed rate of revenue increases. Incorrect. The Millington Board of Education (MBOE) will determine the type and scope of all health insurance plans offered to employees. The MBOE will be able to monitor costs and to determine the amount that employees will pay and the amount that the Board of Education will pay for health insurance.
- Assumption-School transportation and bus costs were not included in the SES Feasibility Study. Incorrect. The 2012 Southern Educational Strategies, LLC feasibility study projected that 27 bus routes would be used, and the projected costs to provide this service were based on actual SCS costs or the costs to sub-contract transportation services to a vendor who will own the school buses.
- Assumption-Millington has old school facilities and will have to build new school buildings. Incorrect. The City of Millington has some of the newest school buildings and will need to operate only two elementary schools, one middle school, and one high school. Other than E. A. Harrold Elementary, each of the existing Millington school facilities was either built or renovated in recent years.
In summary, the City of Millington can afford to
operate a city school system. In fact, because the citizens recently approved a
½ cent sales tax increase, Millington actually will receive more local revenue
per student than the unified Shelby County Schools.
Currently, 27 other Tennessee
cities successfully operate their own school districts, including cities in
West Tennessee which are smaller than Millington such as Alamo, Bells, and
Humboldt. The Millington Board of Education (MBOE) is required to operate within
its annual revenues and must submit an annual balanced budget. Each year, the
Millington Board of Mayor and Aldermen (BMA) must review and approve the school
budget, and the BMA will have full control of the property tax rate.
It is not logical to assume that over a ten year
period, both the Millington Board of Education and the Millington Board of
Mayor and Aldermen would approve annual school district expenditures that
exceeded their annual revenues by 50 percent. However, that was the logic that
was used in the Knipple report. The assumptions in the report are not
reasonable, and the facts about revenue growth and retirement expenditures are
wrong. Therefore, the conclusions stated
in Mr. Knipple’s report are incorrect.
YES, MILLINGTON CAN AFFORD MUNICIPAL SCHOOLS!
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