Federal stimulus money likely will be used to help pay for Nashville’s new school district rezoning plan.
With budget cuts looming, leaders of Metro Nashville Public School are looking for ways to use federal stimulus dollars to relieve pressure on a tight operating budget for the next school year. The Mayor’s Office encouraged the district at yesterday’s budget hearing to use stimulus funds to such a purpose.
Director of Schools Jesse Register told Board of Education members this afternoon that stimulus funds can probably be used to fund at least part of the expenses created by implementation of the plan.
The plan includes a differentiated pay structure for some North Nashville schools serving large numbers of economically disadvantaged students, which will bring about an additional $1.3 million expense annually to give teachers at those schools 5 percent pay increases.
Stimulus money can probably be used to pay for this part of the plan, Register said. Once the 27-month stimulus funding period is complete, however, the expense will be back on the district.
“That’s the place we’d go first,” Register said. “It would be a budget obligation as soon as the stimulus runs out.”
School board member Ed Kindall, a vocal opponent of the rezoning plan at the time the board voted it into effect, said he doesn’t mind using stimulus dollars for rezoning as long as the district and board commit to continue funding the differentiated pay plan even after stimulus funds can no longer be used.
MNPS expects to spend more than $5.3 million, total, in additional resources for some schools affected by the rezoning plan, according to budget documents.
Metro officials have learned in the last two weeks that MNPS stands receive a total of $24.6 million in federal stimulus Title I dollars to be used specifically for students and schools meeting federal low-income guidelines, and more than $20 million in stimulus dollars Metro will receive through the Individuals with Disabilities Education Act (IDEA), which can be used only on services for students covered by the act.
MNPS will have a longer wait for Title I funds than most other Tennessee districts, due to years of being out of compliance with federal programs spending. Federal Title I dollars intended for Metro have been frozen since December due to non-compliant spending on the part of MNPS. Most money that will reach schools through the federal stimulus package will flow through Title I, and until Metro resolves its federal spending troubles, Title I stimulus money will be frozen along with the rest.
Though stimulus funds stand to help the district, there’s only so much the money can do to ease pressure on the district’s operating budget. Any stimulus dollars the district uses to fund recurring expenses will have to be replaced with local dollars after the two-year stimulus program is complete.
Compounding the need for budget cuts is increasing pressure on the school district’s reserve fund. Reserve dollars are non-recurring funds, but MNPS has in the past few years tapped the dollars to fund recurring expenses from the operating budget.
Sales tax revenue shortfalls this year have put pressure on officials both to cut expenditures and to use reserve dollars beyond the $19 million in reserve dollars originally approved for this school year’s budget. Board finance chair Steve Glover has estimated that by the end of this school year, the reserve fund balance could go down to $42 million.
Metro charter recommends that department reserve funds maintain balances equal to 5 percent of the total operating budget, which means MNPS would have another $11 million in reserve dollars to spend before reaching the $31 million minimum balance required by Metro government.
District officials have acknowledged the growing likelihood that $15 million in budget cuts for the next year — which includes the elimination of a net total of 209 school district staff positions — will have to take place. Board members are aiming to vote on the budget at a 1 p.m. meeting on Friday, April 24. The meeting will be held at the district’s central office, 2601 Bransford Ave.