Jonathan WelchThere is no more popular phrase for an elected official to utter than "we are introducing a bill to reduce taxes." And I know of no one, Republican, Democrat or independent, who would not like to see their tax bill lower. So when Rep. Gerald McCormick introduced legislation this week that would reduce the state sales tax from 7 percent to 6.75 percent, most would read the headline and applaud. The same goes for the bill introduced to eliminate the Hall Tax. However, while popular and well-intentioned, both are poorly designed and completely ignore the fiduciary responsibility of the state.
Under both proposals, the state would cut about $250 million in revenue. Last year's total state revenue was $7.2 billion dollars. This would be 3.4 percent of the state budget. Neither of these proposals would seem to broaden the tax base or increase consumer spending in a way to offset the reduction in revenue.
This reduction in revenue with no viable replacement is truly concerning because it will further burden the counties to provide for mandates placed on them by the state. There is no better example of this than K-12 education. And there is no better example of the dysfunction in Nashville than in the continuing problems with the Basic Education Plan. For more than two generations of students, the BEP has been reviewed, refined and adjudicated. The last time was almost 10 years ago when the current form, BEP 2.0, was put into place. Through all this, though, not one time has it been fully funded as written by the legislature.
There are many known problems with BEP 2.0 and its formulas for how counties are allocated money from the state to provide basic education. One of the most commonly discussed problems is how it allocates money for the number of teachers needed in a given county. Student-teacher ratio should be simple to calculate. And in smaller counties with a single elementary, middle and high school, it is. In larger counties with multiple schools, we must satisfy student/teacher ratios based on class size. Take School A in Hamilton County. In this oversimplified example, it has 105 kindergarten students. The school would need six teachers to satisfy a 20-to-1 student-teacher ratio. School B has 95 kindergarten students. It would need five teachers to satisfy the state requirement. However, the BEP sees only 200 students and provides 10 teachers, not the 11 the state would require. Now multiply that across 75 schools, and it appears to the BEP that we have many more teachers than are required. So the local commission has to make up the funding difference to satisfy the state department. This is just one simple example of many known problems in the funding formula.
BEP 2.0 is currently under review again, and while school boards and county commissions await the revisions by the governor's task force, most hold little hope that anything decided will actually be amenable to all parties. The smaller counties don't have the revenue base and depend on the larger counties to help provide the funding through sales tax. We in Hamilton County are a donor county; we provide more in sales tax than we receive back through the BEP, and we make up the required funding gaps through our property tax. And as a citizen, I'm proud we can reasonably help each county provide a basic education to all students in the state.
Unfortunately, no matter how the BEP is reviewed, no matter how funds are allocated, as long as there continues to be insufficient funding for what is deemed by the legislature to be basic education, there will be conflict over the funding. The small counties will be concerned with equity, and the larger counties will feel they are having to shoulder an excess burden. And when our state representatives are publicly debating further reducing revenues instead of debating how to fully fund BEP, the conflict will only worsen.
Often, I am told we should run the school system like a business. In some areas, we can and we should. I believe this is one of those times. If a business was owed $14.5 million each year, it would turn that debtor over to collections. If our state legislators, from both large and small counties, continue to ignore the funding problem, the conflict and the problems they cause, and then make the problem worse with ill-conceived cuts to revenue, they will leave the school systems with no choice. We will have to go to court.
Dr. Jonathan Welch represents District 2 on the Hamilton County School Board.