Wonk out: Some more figures on the schools fund balance

We’re talking about this story, here. Summarized:

The reserve fund for Knox County Schools is close to the state required minimum.

Called a “fund balance,” the reserve has paid for one-time projects, maintenance and year-to-year purchases such as textbooks. State rules say the fund balance should be at least three percent of the schools operating budget.

Based on that formula, the school system’s minimum reserve should be $12.8 million. Projections from Knox County show the fund will be within $500,000 of the state minimum by the end of the current fiscal year in June.

Here’s a quick rundown of the spending for the past five years in this doc: Fund Balance Appropriated Summary.

The fund balance is cash that a government or school system has on hand to spend as they wish, so long as they don’t dip below the state’s low threshold. This came too late to use for print, but here’s why, explained by an official with the State Comptroller of the Treasury:

The 3% fund balance legislation is found in Section 49-3-352, TCA.  I think the intent of this 3% rule was to allow school systems, during their budgetary process, to budget (set aside) 3% of unexpended fund balance as an emergency reserve.  This 3% may be expended for shortfalls in budgeted revenue and nonrecurring expenditures (capital outlay for example) with the approval of the Board of Education.  If a school system does not budget this 3% fund balance reserve, their budget may not get approved by the state Department of Education or the Division of Local Finance.

That 3 percent, essentially, is the emergency fund. And Knox County Schools have spent nearly all the way to that threshold. How close they got will not be known until about August/September, when sales tax returns come back from the state. Sales tax is collected by the state then returned to the municipalities, so there’s a lag in the reporting. Sales tax also pays a good deal of the school system’s budget.

As it turns out, Knox County’s fund balance is about 40 percent of its operating fund, or $66.1 million. Don’t expect to see Tim Burchett handing that out to schools, by the way. He’s nothing if not steadfast in fiscal policy as a no-new-taxes, drop debt and save money kind of politician.

That stance has had some wondering publicly whether it’s time to relax the tight reins on county money as Knox County is in a growth phase, including schools board members and Commissioners.

Chairman Brad Anders has said that something will need to be done – he represents the exploding Hardin Valley area where a middle school was proposed by the school board and ignored by Burchett. He’s also raised concerns over the amount of roads that are paved and hopes that could be increased.

… but when it comes time to raise taxes, it’s doubtful that there’s enough will on the conservative commission – 9 of 11 are Republicans – to vote to spend the money. I’m no betting man, but unless there’s some kind of county uprising or new commissioners on the board (both doubtful) don’t expect to see the kind of widespread funding for all the things schools and everyone else wants.

If you want to take a look at more detail from the schools fund balance go to the budget detail from previous years, search for the fund balance for schools in the detail – around page 70 in the .pdf documents.

About Gerald

A reporter in Knoxville, TN. Work (mostly) inside and play (mostly) outside. I'm a part of the X or the Y generation. None of us claim the other.
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3 Responses to Wonk out: Some more figures on the schools fund balance

  1. Tamara Shepherd says:

    Thanks, Gerald–know that at least one of your readers printed that pdf!

    Regarding the “exploding” Hardin Valley community, I do hope you and all media make a concerted effort to review that $75K analysis of middle schools KCS commissioned, which concluded that “no net middle school” was warranted on the basis of projected growth. That is, it *did not* recommend a new middle school (MS) for either HV or Gibbs. Rather, it cited a *temporary* spike in MS enrollment peaking in 2019 (evidenced by 400-some odd MS students beyond system wide building capacity), but it also cited MS enrollment by 2024 at a level *lower than* today’s system wide enrollment.

    It was for this reason that the study recommended rezoning and targeted additions to existing school facilities.

    The BOE viewed a summary PowerPoint presentation at its March 11 meeting, which interested readers may pull up online via that meeting’s agenda posted to knoxschools.org. The data point concerning “no net middle school” being required is on pdf page 4. The data point concerning lower MS enrollment in 2024 than today’s is on pdf page 16.

    There’s lots more to know about other KCS facilities that are not presently utilized as middle schools, but could be. Around 1500 seats to address growth are available right now, within some of KCS’s existing buildings. The half-empty Karns High has 1000 available seats (to accommodate Karns Middle’s 8th grade only?) and the abandoned Cedar Bluff Intermediate could have 500-ish seats (with renovation, to expand Cedar Bluff Middle and thereby relieve other west-lying schools). The first of these two suggestions is free and the second one is cheap.

    KCS needs to stop abandoning its existing buildings.and telling us it needs new ones. KCS also needs to stop building new high schools for 100 and 200 and 400 students–three such over the last five years.

    And these budgetary observations are from a *liberal* for Pete’s sake. .

    • Gerald says:

      Thanks for commenting. When we’re talking about “exploding” I’m talking about overall development. Comparatively, it’s greater there than in most other areas of the county. As for what that means for Middle School students – as you noted – it’s covered in the study. Not going to argue for or against the findings there.

  2. Tamara Shepherd says:

    I said moments ago: “Around 1500 seats to address growth are available right now, within some of KCS’s existing buildings.”

    What I meant was around 1500 seats to address growth JUST IN THE HARDIN VALLEY AREA are available right now, within just the Karns High and Cedar Bluff Intermediate buildings.

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