Case Closed!

A Davidson County Chancellor ruled yesterday to dismiss the 18-year Small Schools lawsuit, as no issues related to the suit remain unresolved. This morning’s Commercial Appeal has the story.

Lewis Donelson, an attorney representing the plaintiffs, argued for keeping it open based upon intensive efforts by the state’s urban systems to change the formula so that they get more; the court responded that it does not deal with “what ifs,” but left open the option of re-opening the case if the BEP were repealed, or if substantial changes were made.

In this year’s annual BEP resolution, the Legislature again directed the BEP Review Committee to examine and make recommendations on moving to a system-level fiscal capacity model, which affects how the BEP funds are distributed based upon local governments’ ability to pay. Although such a recommendation was issued last year (see David v. Goliath), it failed to gain passage in the Legislature this year, probably because of the disparity in the winners and losers, along with the high cost of “holding harmless” those school systems that would lose significant funding.

I’m certain that it would be possible to develop a system-level fiscal capacity model that is fair, incorporating not only ability to pay, but also level of effort. The model proposed this year, developed by Harry Green of the Tennessee Advisory Commission on Intergovernmental Relations (TACIR), incorporates variables like the value of taxable property, volume of taxable sales, state shared tax revenue, median household income, child poverty rate, and taxable real estate assessment. Nowhere in the formula will you find consideration of tax rate, nor the percentage of local taxes already devoted to education.

I could get into the details of the formula, but that’s another 3,000 words or so for another post.

Will the ruling to close the lawsuit — with the Chancellor’s caveat that is could be re-opened if significant changes are made — will cause the Legislature to rethink bowing to demands of the state’s largest cities for more funding at the expense of smaller systems?

Update:

An article in this morning’s Chattanooga Times-Free Press (or PDF here) quotes Jesse Register, Superintendent of Hamilton County Schools, as saying:


“I think it’s good the case has been dismissed, because that means it’s been settled,” Dr. Register said. “I’m hopeful now with the small systems lawsuit out of the way that other inequities in the funding formula that don’t treat the urban systems well will be addressed, too.”

The TFP article does not directly quote the Chancellor, whose remarks in the AP story linked at the top indicate that any major changes would be considered grounds for reopening the suit, and (attorney for the plaintiffs) Donelson’s argument against the dismissal specifically referenced the urban systems’ push for change.

Further down, it’s clear that Hamilton County Commissioners didn’t make that connection either:

Hamilton County Commission Chairman Larry Henry said he and several other members of the commission are prepared to enter a lawsuit to change the BEP formula, if need be.

“We’re nowhere near where we ought to be (in terms of funding), and that puts an unnecessary burden on the citizens of Hamilton County,” he said. “That would be a last resort, but if it’s what we have to do, it’s what we have to do.”

Seems we’ll have to wait a bit before drawing conclusions about whether it’s over or not.

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