Sullivan school board votes not to amend budget revenue projections

Rick Wagner • Aug 9, 2019 at 11:30 AM

BLOUNTVILLE — Sullivan County’s school board has declined to make any changes in revenue projections for its 2019-20 budget, and board Chairman Michael Hughes said the budget will fail to pass the maintenance of effort, or MOE, test from Tennessee.

The Board of Education voted 7-0 not to amend its $83,234,000 2019-20 budget that it and the Sullivan County Commission have already approved. The issue, Hughes and school system Business Manager Ingrid DeLoach told the board, is that the County Commission approved the school budget amount but not enough money to fund it.

“We do not think the budget will meet maintenance of effort as currently funded,” Hughes said. He and other board members said the commission has no line-item veto authority on expenditures or revenues. “We’re not going to play smoke and mirrors with the budget.”

DeLoach and new Director of Schools David Cox said that they met with county Accounts and Budgets Director Larry Bailey recently and that he asked the school officials to consider amending the loss of revenue in the city-county funding split from 2 percent to 1 percent, which would be the difference between a potential loss of $1.75 million in revenue compared to $875,000 less. Hughes said that 2 percent is a good estimate and that in the past the amount has varied from 0.5 percent to 2.9 percent.

“They (commissioners) didn’t approve a budget that supports our budget,” DeLoach said.

Hughes said the request on paper might cover at least $800,000 needed to meet maintenance of effort but that if the losses of students to Kingsport, Bristol and Johnson City schools came in at more than 1 percent that would require the county school system to use its fund balance to make up the difference. DeLoach and Hughes said Bailey told them he believed state audit officials would approve that as meeting maintenance of effort, but Hughes said Maryanne Durski, Tennessee Department of Education Office of Local Finance executive director, indicated that would not work.

All seven members voted not to amend the budget: Hughes, Vice Chairman Randall Jones and members Matthew Spivey, Mark Ireson, Paul Robinson, Jane Thomas and Randall Gilmore.

Jones said honoring the request would be “illegal and if it is not illegal is unethical.” Jones said that school board attorney Pat Hull, in the room for the meeting, and Tennessee School Boards Association attorney Chuck Cagle said the commission can’t dictate line items to the school system. 

After the meeting, Hughes said that a 2 percent raise for all employees the board approved last month would be given retroactively to July 1 but that it was premature to give it in the paychecks going out later this month until the school budget issues are settled. By state law, counties and school systems must send in balanced budgets by Aug. 31 that in select areas — including education funding — meet maintenance of effort.

In a complex discussion, Hughes said that the school system for the second year lost $1.6 million in renovation/maintenance funding from the commission in the school budget revenue lines; lost $200,000 from a devaluation of what each penny of the property tax rate generates; and had to pay $352,000 for half of the school resource officers the commission originally had proposed to fund completely through the Sheriff’s Office budget.

On the other hand, the school system got access to $1.9 million that had been going in part to repay energy-efficiency projects dating back to 2001, but Hughes said that of that $412,000 had been going to repay the cost of a partial roof on Sullivan East High School. Hughes said all that leaves the system down $1,656,000 in revenue overall. 

Hughes blasted County Commissioner Todd Broughton for a July 27 Facebook post questioning why the 2 percent raise wasn’t more, with Hughes saying it would take about $1.5 million for the 2 percent raise and that was what is available out of the $1.9 million. He also blasted Commissioner Mark Vance for telling media the school system came out well in the budget process.

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