By Tabitha Evans Moore | EDITOR & PUBLISHER

LYNCHBURG, Tenn. — About this time each year, every local government in the state faces the same quandary: how to balance the needs of a school system with the concerns of property taxpayers, especially in small, rural communities where the tax base is limited, and public scrutiny is high.

School systems are constantly being asked to do more with less. Stagnant wages can lead to trouble attracting and retaining good teachers. Aging infrastructure and equipment often needs repair or replacement. These priorities often require increased funding, particularly if state contributions fall short of local needs or mandates grow faster than revenue.

On the other side are property taxpayers – especially those on fixed incomes – who are also being squeezed at every turn.

There are no easy answers and on Monday, May 19 those two camps could collide as the Metro Council looks to approve the first reading of the 2025-26 county budget. A fact, local Director of Schools Chad Moorehead was candid about during Monday night’s Moore County School Board meeting.

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“Significant tax increase“

Director Moorehead told the Board on Monday that he’d presented two separate line-itemed budgets for the 2025-26 school year to the Metro Budget Committee – one that reflected the full state-mandated minimum salary requirement of $50,000 for all local teachers beginning in the 2025-26 school year and one that budgeted teacher salaries at $47,250 – the halfway point to get to $50,000 by the state’s deadline of fiscal year 2026-27. Moorehead says he followed the lead of many area school systems in asking for the full amount early in order to potentially avoid the need to ask for a tax increase two years in a row.

Governor Bill Lee signed the Teacher Paycheck Protection Act into law in May 2023. It represents the largest teacher pay increase in the state’s history. Previously, the state-mandated minimum teacher salary requirement sat at $44,500. The 2025-26 budget also includes a three percent salary increase for all non-teacher support staff – matching increases for other county employees.

“The budget committee did approve the budget with the teacher salary schedule that sets the minimum at $50,000 and meets the intermediate minimums set by the state minimum salary schedule,” Director Moorehead explained to the Board. “Basically, this is a budget that is identical to what we had approved as a budget last year exclusive of the new salary schedule, replacing a school bus, new science textbooks, and increases in line items based on current inflation rates.”

With a grimace on his face, Director Moorehead told the Board that the current budget would require a “significant tax increase” – one that’s already garnering a lot of discussion prior to Monday night’s Metro Council meeting.

Maintenance of Effort requirements

In the State of Tennessee, state law requires local governments to uphold what’s called Maintenance of Effort (MOE), which mandates that local governments allocate at least the same amount of local funds for school operations each fiscal year as they did in the previous year excluding capital outlay and debt service. The Tennessee Department of Education monitors compliance of MOE requirements. If a district fails to meet its MOE obligations, the Commissioner of Education has the authority to withhold state education funds until compliance is achieved.

Director Moorehead informed the Board that the current proposed budget meets those MOE requirements, and highlighted revenue lines that cannot decrease in 2025-26 including local property tax contributions.

BEP versus TISA formulas for state funding

Until 2022, the state used the Basic Education Program (BEP) funding formula, which funded local school systems on a resource-based criteria. Beginning with the 2023-24 budget, that switched to the Tennessee Investment in Student Achievement (TISA) formula, which funds local school systems on a student-based funding basis. Both include a local match requirement.

According to the state’s website, in the last year of BEP funding, Moore County received a total allocation of $7,489,000 – $4,773,000 from the state and $2,716,000 from local contributions. For comparison, in the first year of TISA funding, Moore County received a total of $7,915,570 including $5,192,570 from the state and $2,723,000 locally.

The March estimate of TISA funding provided by Director Moorehead shows just $5,709,493 in TISA funds – up slightly from the 2023-24 actuals of $5,309,554. That’s just a $399,939 increase. However, Director Moorehead was careful to warn the Board that the estimates tend to trend downward as the final allocation deadline approaches in July.

Director Moorehead was also quick to point out that the state-mandated salary increases were not the sole cause of the proposed tax increase. Other factors also included the new TISA formula not being friendly to the local district, inflation, and unfunded mandates surrounding student test data.

“The TISA formula has not been friendly to our school district, especially in the first year,” Director Moorehead stated. “We lost over $400,000 in our fund balance from 2023-24 to 2024-25.”

Adding to the budget woes is the fact that based on estimates, this year one penny in property tax rate will bring in $51,000 in county revenue, which is lower than the previous year. The school systems current budget would require a 23.41 cent property tax increase – or around $58 per every $100,000 of home value.

“So I would say there are a number of factors that have played into the need for a tax increase to maintain, because this is maintaining. We are not adding teaching positions. We are adding salary increases that are mandated,” Moorehead told the Board. “I’m not saying that they shouldn’t be there because our salary schedule currently is the lowest in this area. It’s not a negative thing.”

Open positions in local schools

Currently there are around 10 open positions inside the school system including a fine arts teacher, music teacher, AG/FFA teacher positions at the high school as well as positions in music, computer science, and a classroom teaching position at the elementary school. Both schools have open positions in special education and the district is currently without an IT professional on staff.

Though one Board member asked if these open positions could serve as potential cuts when it comes to budget, Director Moorehead looked noticeably uncomfortable with the thought of not filling those open positions.

“As a school system, we have attempted to work within our means in regard to our tax rate. Looking back, I suppose we should have been asking for small two and three cent increases every year in anticipation,” Moorehead stated. “I personally have a difficult time doing that when we have worked within out tax rate and been able to add to our fund balance at the same time. Unfortunately, we can no longer do so.”

In the end, Ed Cashion made a motion to approve the estimated budget and send it to the Metro Council for approval. Jammie Cashion seconded the motion. It passed unanimously.

The Metro Council will meet on Monday, May 19 at 6:30 p.m. at the American Legion Building located off Highway 129 (the Booneville Highway) in Lynchburg. To be added to the agenda for the public comment period, contact Mayor Sloan Stewart’s office at 931-759-7076 prior to the meeting. •

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