Hamilton County teachers might see pay increase after all, as county finance team sends proposed budget back to school board

Hamilton County teachers' annual pay increases might not be lost after all.

The Hamilton County school board is meeting Monday to vote on a fiscal year 2021 budget - again.

The board approved a $417 million revised budget on April 30 that eliminated teacher pay increases, two positions in the central office and froze non-teacher hiring and purchasing through June 30, among other cuts, but when the district sent the budget to the county finance office on Friday, officials kicked it back.

The board cut too much local funding out, according to Al Kiser, county finance administrator, in an email to Superintendent Bryan Johnson and board members Friday.

"We have performed a quick review of your FY20-21 budget and have determined that this budget with its decline in local revenues will cause County Government to have a maintenance of effort issue of approximately $1.8 million," Kiser wrote.

"No one knows when the local economy will rebound and we certainly don't want to overreact in our budgets by reducing revenues too much or too soon. Since a budget is a working document and can be adjusted/amended at any time once the economic landscape is clearer, I would respectfully request that you increase your local revenues in next year's budget to eliminate this maintenance of effort issue."

Tennessee's maintenance-of-effort laws are meant to ensure that local governments do not decrease local funding for public education if state funding for schools increases, according to the state comptroller's office. County commissions or city councils must budget at least the same total dollars for schools that they did the previous year to comply with these laws.

In cutting nearly $4 million from the original $420 million budget proposal, though, Hamilton County Schools' approved budget runs against the law.

Chief Business Officer Brent Goldberg said the board needs to add at least $1.8 million in local funding back into the budget.

Johnson proposes restoring teacher step increases, which cost the district about $2.8 million annually.

"Based on [the county[ recommendation I propose that we restore teacher steps. The other reductions and freezes presented would remain. Our budget meeting with county government is set for Tuesday, May 5th at 9am, so based on this I propose (and discussed with Chairman Wingate) that we meet on Monday, May 4," Johnson wrote in an email to board members Friday.

The district had budgeted $1 million to put into its general fund balance, or savings, during the next fiscal year, but instead that $1 million in addition to the $1.8 million addition could cover the $2.8 million needed for pay increases, Goldberg told the Times Free Press.

Goldberg said district administrators were worried they might run into this issue after the board asked for a revised budget without any growth money. Johnson initially presented a $420 million budget to the board on March 30, but in recent weeks, some board members cited projected revenue concerns and delayed the vote to seek more guidance from county commissioners.

"We proposed a fiscally sound budget with no maintenance of effort issues and approval of that budget was our recommendation," Goldberg said of Johnson's initial budget proposal. "I thought it could be an issue and we received confirmation from the county that there was maintenance of effort issues."

Many district employees were upset with the board's move to eliminate the pay increases Thursday night. A 2.5% raise approved in February was still included in the approved budget, but the step increases, which typically come to about 1%, were not.

Goldberg said the motivation behind the recommended cuts was "to keep as many people employed as possible and to protect employee paychecks."

Some wondered why the district's fund balance couldn't be used to make up the difference, but Goldberg said fund balance shouldn't be used to cover a recurring cost year after year.

Even if the board votes to reinstate the step increases on Monday, the district will still have to keep a close eye on revenue as the economy re-opens amid the ongoing coronavirus pandemic, Goldberg said.

"By putting this revenue back and restoring step increases, we will still have to monitor revenue every month to see what the economic conditions are," Goldberg said.

The board is scheduled to meet at 5:30 p.m. on Monday, May 4.

Contact Meghan Mangrum at mmangrum@timesfreepress.com or 423-757-6592. Follow her on Twitter @memangrum.