Interim Superintendent Dan Ward was heading up Memphis City Schools when the amendment aimed at making Shelby County Schools a special district. His testimony to a committee of the Tennessee Legislature remains relevant:
Good afternoon and thank you for allowing me this opportunity to speak to you on behalf of the Memphis City School System about the creation of special school districts, especially the creation of one for Shelby County Schools.
As you are aware, there are currently 5 bills in committee concerning Special School Districts. Three bills are virtually the same. They allow any operating Local Education Agency to convert to a Special School District. The fourth bill allows for bond funds to go directly to the school district in which the facility is located and applies only in Shelby County. The final bill calls for the State Board of Education to consider the financial impact on surrounding school districts if a new city or special school district is created.
The first three bills are problematic for Memphis City Schools because there is no reference to any impact that the creation of one or several Special School Districts will have on adjacent school districts. For Memphis City Schools we believe that there will be not only financial impact on the district itself, but the impact goes far beyond dollars and cents for both the school system and the greater Memphis and Shelby County community. A brief discussion of some of the issues related to the impact of creating a special school district for Shelby County Schools may shed some light on the various factors that have to be considered in reviewing bills related to creation of special school districts.
In order to understand the full impact of creating a Special School District with taxing authority within the boundaries of Shelby County School we first must examine the proposed Special School District boundaries. The Memphis City Schools charter states that its boundaries are coterminous with those of the City of Memphis. Additionally, with the passage of State of Tennessee Public Chapter 1101—Tennessee’s Growth Policy Act, the Shelby County Growth Plan and all seven municipal growth plans were created. The plans set forth future growth boundaries and annexation areas. The annexation areas were agreed upon by all jurisdictions and the Memphis City School System, which was a member of the Growth Plan Coordinating Committee, as dictated by the legislature. We believe that the boundaries included in the Growth Plans form the rightful boundaries of the two school systems in Shelby County. The legal implications of “freezing” the school district boundaries to incorporate everything outside the current City of Memphis limits without accounting for future growth boundaries must be explored.
Creating a frozen Special School District boundary may also affect school choice and growth in both school districts and the local jurisdictions. For instance, since the boundaries proposed by the Shelby County Board of Education would include areas annexed by the City of Memphis, future students would live in the City of Memphis but attend school in the special school district. As Memphis residents, could these children choose to attend a Memphis City School? Will parents choose to move into these Memphis neighborhoods for the option of attending the special school district, or will they move out of these neighborhoods to avoid paying three property tax bills (City of Memphis, Shelby County and Special School District)? In addition, what will be the voting arrangements for these citizens? Will they vote for one or both school boards?
Additional issues involving growth relate to quality of life, sustainability and economic development in the larger Memphis and Shelby County communities. Schools are important facilities for neighborhoods and their larger communities. The ability to provide quality school buildings and services to students determines, in large degree, the overall sustainability of community. Additionally, investments by businesses in land, labor, buildings and equipment are enhanced and stimulated by the desirability of doing business at different locations. Schools help improve this desirability within their respective boundaries.
Taxation is another issue that must be addressed in studying Special School Districts. Currently, Memphis City Schools and Shelby County Schools are funded by numerous sources. One of these sources is the County’s 50% share of the local sales tax option that is distributed to the two school districts based on average daily attendance. Another source is Shelby County property taxes. Both of these sources are collected from all residents of Shelby County, including residents of the City of Memphis.
The creation of a Special School District with taxing authority and bonding ability directed solely to schools raises many questions regarding school funding. These include possible changes in Shelby County’s distribution of the local sales and property taxes; potential transferring of taxing and bonding authority to the Memphis City School System as well as a Shelby County Schools special school district; school board election issues revolving around those residents living in Memphis and paying City taxes but attending the Special School District; the possibility of the lower income City residents having tax increases to fund schools; and sufficient funding from both Shelby County and the City of Memphis to sustain and grow the Memphis City School System.
Because of all of these questions and issues that I have just discussed, Memphis City Schools has decided to initiate a study of the possible impacts of creating a special school district. The school system is contracting with the Regional Economic Development Center at the University of Memphis to collaborate on this study.
The Special School District Impact Study will address myriad issues regarding the creation of a special school district. The new district (and possibly MCS) would have the power to borrow money and have the state legislature set a property tax rate to fund the resulting debt. This decision-making structure and process could alter the growth dynamics among the existing local jurisdictions of Shelby County. It could also affect the current formulas for distribution of funds to the local school systems. All of the previously mentioned factors must be examined closely before a decision on the creation of a Special School District in Shelby County can be made.
As you can see, our discussion of the impact of a special school district within Shelby County Schools on Memphis City Schools is a cautionary note for the creation of any special school district in the State of Tennessee. That cautionary note is that special school districts impact communities, voters, governmental structures and, ultimately, parent choice about the education of children. We hope that you as legislators consider all of these issues as you ponder the various bills related to the creation of special school districts.