Report: Local tax dollars fund majority of Tennessee K-12 school capital projects | Tennessee


(The Center Square) – During legislative budget negotiations earlier this year, Tennessee Senate Finance Committee Chairman Bo Watson, R-Hixson, was asked about the Legislature’s cut of $200 million in dollars from Governor Bill Lee’s proposed budget amendment, which sought to relocate school buildings from flood-prone areas.

Watson responded that the Tennessee Legislature did not want to enter into a policy of building schools after Lee argued that it was important for the state to pay for these schools.

“I went to Waverly, Tennessee after last year’s devastating floods,” Lee said during his state of the state address. “The tragedy, the heartache, the loss was hard to accept. I walked into elementary school where the water rose four feet in 10 minutes. I saw desks, backpacks and books stacked against the door where the water rushed in. If the Waverly flood happened on Friday instead of Saturday, we would mourn the loss of hundreds of Tennessee children.

“I am offering one-time funding to ensure that no student in Tennessee attends a public school that is in a flood zone.”

Funding has not been approved, but a new report shows that the policy Watson was referring to is consistent with Tennessee’s recent past. The Tennessee Comptroller’s Office report showed that the majority of capital funding for local school projects is funded by local governments.

In the 2019-2020 data that was reviewed, local governments spent $2 billion on land, construction, construction and renovation as well as parking lots, sports fields, buses, school furniture and playground equipment.

Meanwhile, the state sent $503 million to schools in the same fiscal period through the Basic Education Program that includes things like a Fast-Growing Schools Allowance.

“Major capital projects can require large, non-recurring expenditures and are typically considered separately from day-to-day school expenditures for instruction, support services, student transportation, etc.,” the report states. “Capital expenditures and related debt repayments for capital projects are generally not included in measures of education spending per student at the federal or state level due to their one-time nature.

“For example, buying land and building a new school is generally not a repeat activity every year and should not be budgeted annually in the same way as teacher salaries and gasoline for school buses.”

Data used for the study included the Comptrollers’ Financial Reports Database, which included audits of 89 county school districts.

The bureau also conducted direct interviews with school district officials and used state growth data to determine the impact of enrollment growth on spending.

The data was then broken down into categories, with approximately $1 billion spent on capital projects, between $685 and $693 million on project debt service, between $125 and $141 million on regular capital expenditures, including construction costs and $195 million for equipment and furnishings statewide in 2019-20.

In one example, the report states, “In a city school district, the school district is directly funding a middle school addition, while a new elementary school will be primarily funded by the local government. The local government has borrowed funds on behalf of the district for a new administrative building, and the district will transfer its funds to the city to cover debt service over 12 years.”

Of the $678.5 million in capital projects that year in the comptroller’s database, $379 million of expenditures were school district expenditures while $300 million were paid for by local governments.


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