The Hamilton County School Board on Thursday night grappled with three obstacles to the operating revenue for its upcoming budget - high inflation, expiration of pandemic relief funds and a shrinking share of county property taxes.
“This is not sustainable,” said board member Marco Perez, who is chairman of the finance committee. “If we want to support education we’re going to have to back it up with advocacy.”
Today, schools receive 43 percent of the county’s 2.2373 property tax rate. But in 2008 schools received 54 percent, said Superintendent Dr. Justin Robertson. Chattanooga’s booming growth has translated into stagnant school system revenue, he said.
“The millage rate that we’re getting is the lowest it has ever been in the history of Hamilton County Schools,” Dr. Robertson said. “This is the lowest investment in public education that the county has ever had.”
“(City growth) comes back to hurt us,” he said.
He said if the community pushed to reallocate property tax funds in favor of schools, it would add about $20 million to the budget.
“That’s literally just leaving the pot as it is,” he said.
“We are getting less and less and less every time,” Mr. Perez said. “We are continuing to be squeezed further and further.”
School officials speculated that the County Commission wants to play it safe with a low “maintenance of effort” commitment, meaning the commission may not legally lessen what it committed last year.
The county has also predicted just two percent growth in property taxes.
“I don’t understand how that is possible,” said Mr. Perez, after board member Gary Kuehn’s anecdote about a farm across the street from his home. Mr. Kuehn said that property taxes on the property jumped from $4,000 to $4 million when it was developed into a small neighborhood.
Elementary and Secondary School Emergency Relief 3.0 funds, part of the American Rescue Plan, will expire in FY25, taking $54 million out of the operating revenue. The district will lose another $22 million in other federal grants.
“Obviously 76 million has an impact,” Mr. Perez said.
Dr. Robertson said cuts will probably come to tutoring and the Summer Reach program, which will lose 10 sites.
“This board has been talking for about three years now for this moment,” Dr. Robertson said.
Board members will work with the County Commission’s education committee, chaired by Commissioner Steve Highlander and including Commissioners Joe Graham and David Sharpe, to present a school budget in June.
Under the county’s new budget process, all expenses are assigned to a committee.
“I think it might work better for us. It won’t get caught in so many weeds,” Dr. Robertson said.
Mr. Perez expressed concern with delays the uncharted process may cause.
“We want the best revenue projection,” he said.
Last year the commission pulled $6 million from facilities maintenance at the last minute, pledging to issue a bond for facilities instead. The mistrust planted then extends to this budget season, too, school officials indicated.
Dr. Robertson told the board that the County Commission’s budget committees will keep surprises at bay, as the committee and the school board will work together closely to draw up a budget “reflective of what that committee will build consensus around,” he said.
Dr. Robertson said that the bond for facilities will probably be issued in July.
The FY25 preliminary operating revenue presentation prioritized:
Employee compensation, benefits and satisfaction
Well-being supports, arts education and extracurricular activities
Adult-to-student ratio of 1:10 in every school
Work-based learning and apprenticeships