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City leaders resist funding solution proposals

Two proposals for a local solution to the 42 percent funding disparity faced by Washington County students were not welcomed by Johnson City leaders during the Nov. 12 meeting of the Health, Education and Welfare Committee.
Following a joint session of the county commission and Board of Education two days earlier, the committee continued the conversation with city officials regarding the difference in per pupil local funding between the Johnson City and Washington County school systems.
Mayor Dan Eldridge presented the information he shared earlier with the governor’s BEP Task Force. “Washington County is affected by parts of BEP such as fiscal capacity,” he said. The Basic Education Program is the funding formula that determines how state education dollars are generated and distributed to Tennessee Schools.
According to Eldridge, local funding is the core issue. “Our system is unique in that more money comes from sales tax than property tax,” he explained.
However, 86 percent of the local option sales tax is collected in Johnson City while Jonesborough and Washington County each collect 7 percent.
The first half of the sales tax collected is allocated to the schools, while the second half goes to the municipality in which it is collected.
“Washington County commits its second half to the schools, which supports both systems,” Eldridge said.
For every dollar Washington County provides to the county schools, an equal amount must be given to the city schools.
Eldridge said the second half of the majority local option sales tax provides a strong advantage to Johnson City because it does not have to follow the sharing requirement.
“Despite our desire, there is no way to close the gap by even $1,” Eldridge said.
Even with less funding, the county schools have a 91 percent graduation rate compared to Johnson City’s 90.4 percent.
“Washington County is getting them across the finish line,” Eldridge said.“But because they didn’t have the same support as Johnson City, the graduates are not as well prepared for after high school.”
The result of the $1,334 difference in per pupil funding per year equals an $11.9 million disparity for county students.
Eldridge offered two potential solutions to resolve the funding disparity. The first is to exempt from the sharing requirement any revenues that are distributed to Washington County on the basis of the site of their collection.
The second is to allow Washington County to appropriate to its school system from the county property tax rate without being subject to sharing the per-pupil equivalent of an amount over and above the amount of the county appropriation that were subject to sharing but not to exceed the amount appropriated to Johnson City from municipal revenues to its school system in the preceding year.
Both of these options would require action from the General Assembly.
Eldridge said reaching a local agreement to resolve the issue diminishes the potential for a “one size fits all” solution from Nashville.
“Why not consolidate?” Commissioner Todd Hensley asked. “It would be the same cost as raising the property tax.”
Eldridge said this is a question he has been asked 100 times since last March. “My personal opinion is the two systems will never be consolidated until it is considered a merger of equals, but we can get sidetracked if we try to focus on this.”
Finding a local solution also is foundational to enhancing the quality of life and local economy of Washington County, he said. “We want to increase the opportunities for Washington County students without diminishing the opportunities for Johnson City students.”
Commissioner Joe Grandy credited Johnson City for the commitment to its school system, but echoed Eldridge’s call for a change. “In governance of the county, we owe it to the second sector of students to offer them the same opportunities as the city schools,” he said.
Director of Schools Ron Dykes said the meeting was offering a lot of philosophical discussion, but the issue is not as black and white as it may appear. “County schools are scoring higher than average in the state with little disadvantage compared to Johnson City,” he said. According to Dykes, one common denominator in schools with success is manpower.
Kathy Hall, chair of the Johnson City Board of Education, said the funding issue needs to be looked at as a countywide problem. “We have to be careful not to paint Johnson City as a wealthy system,” she said. “If we had the same money as Kingsport and Oak Ridge, we would have a lot more.”
Eldridge said comparisons could be made to any other system. “The disparity here is local, these are kids in the same community.”
Committee Chair Katie Baker asked if the discussion could move to facilities needs, saying the priority is the Boones Creek schools.
Eldridge said the county’s bonding capacity related to its current debt, is approximately $130 million. Committing the remaining capacity would essentially put the county out of the borrowing business for 15 years. “I don’t know that you could put a government in that position,” he said.
Johnson City Mayor Ralph Van Brocklin said capital dollars needed for city school needs could be $80 million over the next 10 years.
“Philosophically, I can understand wanting every student to have the same opportunity, but I don’t see setting up a plan going forward where the city doesn’t receive anything,” he said. “It can’t be one-sided.”
Eldridge said the objectives are not to diminish anything coming to Johnson City.
“If you change the dynamics, it would affect the city,” Van Brocklin argued. “We’ve based our budget on receiving 86 percent of the sales tax.”
Van Brocklin said a property tax increase might be palatable to Johnson City residents, but Eldridge said that would not solve the constitutional issue. “You’re ignoring the source of the problem, which is the disproportionate share of sales tax,” he said.
“Washington County residents pay more in sales tax than Johnson City residents, but their tax dollars are being disproportionately allocated to the schools.” Eldridge said it is unfair to put the entire burden on the back of the rural taxpayer.
“The long and short of what you’re proposing is a municipal tax increase, and I don’t see getting three commissioners to vote for it,” Van Brocklin said.
The meeting concluded with a decision to continue the discussion during future meetings of the Health, Education and Welfare Committee. No Washington County school board members were present for comment.