With tax failure, how will new district be funded? - FOX13 News, WHBQ FOX 13

With tax failure, how will new district be funded?

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MEMPHIS, Tenn. (FOX13) -

In the wake of Shelby County voters turning down a half-cent sales tax to fund schools, County Commissioner Mike Ritz said the no vote will likely cost the taxpayer.

Without the money, the questions remains how to fund the new Unified School District.

The contentious battle over funding the USD increasingly pits the suburbs against the city of Memphis. Commissioner Ritz has passionately pushed for the half-cent sales tax to fund the Unified system, but he says since the county already pays more in taxes than any other county in Tennessee, he knew raising taxes was going to be an uphill battle.

"We sort of had two hills to climb," he said. "First, we had to convince the voters to vote for a tax increase because sales taxes are so regressive. The people of Memphis, it's a pretty hard pill to swallow."

Voters choked at the polls and overwhelmingly shot the down the referendum by more than a 40 percent margin.
County Commissioner Chris Thomas said voters weren't sure what they were even voting for.

"The school board has not made any decision on cutting, they don't have a budget," Thomas said. "We would basically being saying here's $30 million to help you out so you don't have to make so many cuts."

Commissioner Ritz even admits the school board may be unsure. But the district is going to be in the hole by almost $60 million. He says voters don't like the idea of a half-cent sales tax.

"When we raise the property tax it will be on everybody in Shelby County, and that's probably maybe something these people didn't think about," Commissioner Ritz said.

Increasing your property taxes is the only option, Ritz added. The idea of a the sales tax referendum is still a possibility and it can be brought back to the table in 2013 for voters.

The suburbs voted to increase their own taxes during the Aug. 2 primary to fund its own districts, anticipating that a judge in their favor to create their own school systems. Commissioner Thomas says it passed in the suburbs because voters were knew exactly where the money would go.

"They knew this money would start their school system," Thomas said. "It was talked about. They knew where it was going. But yesterday what you had was half will to education. We're going to put it toward pre-K, but the school board never said that why I think there was a lot of problems with it, and it failed."

Here is what's clear: The Unified School District is in the hole by millions of dollars and the money will have to come from somewhere one tax or the other.

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