MEMORANDUM
FROM:
Sid Hemsley, Senior Law Consultant
DATE:
May 1, 2007
RE:
Article XX, ' 10 of the City CharterBPossible Conflict with General Law on
School Funding Authority of School Board and City Council
I have reviewed the attached letter, and as far as I can determine, everything therein is
legally sound. However, the letter cites Article XX, ' 10 of the City Charter for how disputes
between the school board and the city council over the budget proposed by the school board and
approved by the city council are resolved. Article XX, ' 10 provides that they are resolved
through a mandatory referendum. The letter simply and accurately lays out that provision of the
charter; it does not undertake a legal review of it.
However, I have recently had a couple of occasions to study Tennessee Code Annotated,
Title 49, Chapter 2, Part 2, and other statutes that deal with the authority of school boards and
cities and counties in to fund their school systems. Those studies lead me to conclude that
Article XX, ' 10 may conflict with those statutes. The General Assembly has the authority to
pass general laws that preempt or supersede the provisions of a municipality’s charter, although a
general law will not repeal a charter provision unless that is the intent of the general law.
[Grainger County v. State, 80 S.W. 750 (1903); Williams v.Taxing District, 84 Tenn. 531 (1886);
Grubb v. Mayor and Aldermen, 203 S.W.2d 593 (1947); Henderson v Franklin, 130 S.W.2d 108
(1939).] It appears to me that a good argument can be made that it was the intent of the General
Assembly that the general laws that govern the funding of city and county education systems do
preempt and supersede Article XX, ' 10.
Tennessee Code Annotated, Title 49, Chapter 2, Part 2, deals at length with the authority
of school boards. At first glance it appears to apply only to county boards of education; however,
two Tennessee Attorney General’s Opinions opine that it applies to both city and county school
boards. Tennessee Attorney General’s Opinion 96-123 says:
The Education Improvement Act of 1991 (EIA) provided for a
uniform system of governance of county, municipal and special
school districts. Part 2 of Chapter 2 of Title 49 now applies to
“Boards of Education” rather than “County Boards of Education as
before...”
In Tennessee Attorney General’s Opinion 98-235, the question was whether the City of
Cleveland could compensate the city board of education. In opining that the answer was yes, that
opinion reasoned that although Tennessee Code Annotated, ' 49-2-202(d), provides that “The
compensation of members of the county board shall be fixed by the county legislative body,”:
[T]his office has opined that the provisions of the EIA are intended
to provide a uniform system of governance of county, municipal
and special school districts and that title 49, Chapter 2, Part 2, in
which the above quoted statute appears, now applies to “Boards of
Education” generally rather than only to “county Boards of
Education as before passage of the EIA...”
Part of my recent studies of school-related issues included a study of the legislative
history of the Education Improvement Act, from which I concluded that those Tennessee
Attorney General’s opinions are correct.
Another Tennessee Attorney General’s Opinion has recently come to my attention that
also directly addresses the question of the relative powers of a school board and of a local
government governing bodies respecting the school budget, under Tennessee Code Annotated,
Title 49, Chapter 2, Part 2, and other laws which I will discuss below. TAG Opinion 04-098
addressed several questions, two of which are pertinent to Article XX, ' 10:
1. May a local governing body withhold, from a local school district, those funds which
are allocated for schools?
4. Under state law, do both a local education agency (LEA) and the local governing body
have to vote to transfer of funds from the LEA’s reserve fund?
The answer to question 1 was no, and the answer to question 4 was that:
The local governing body must provide funding for school budgets,
and thus is the entity that decides what revenue sources will be
tapped to fund a school budget. The local governing body does not
need the local school board’s approval to appropriate school
reserve funds.
In analyzing the answer to Question 1, TAG 04-098, says this:
A local governing body may adopt a school budget which is less
than that proposed by the local school board, although it may not
alter or revise line items. See Morgan County Board of
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Commissioners v. Morgan County Bd. Of Dec., 1994 WL 111457,
5, (Tenn. App. 1994); Tenn. Code Ann. ' 6-56-204(b). The
governing body also has the authority to levy the school tax but
cannot be mandated to set the tax rate at a particular level
recommended by the local school board. See State ex rel. Bobo v.
Moore County, 207 Tenn. 622, 632, 341 S.W.2d 746 (1960). We
have not, however, found authority for a local governing body to
withhold funds that have been appropriated for the school district’s
use. [At 2]
In analyzing the answer to Question 4, TAG 04-098 says this:
The accumulated school fund balance is a part of the dedicated
education fund. Tenn. Code Ann. ' 49-3-352(a) [FN4] The
decision to use a portion of this balance rests with local governing
body. The local governing body and the local school board have
complimentary but different roles in the school budget process.
Op. Tenn. Att’y Gen 99-100. The Local school board’s director of
schools presents the budget the board has adopted to the local
governing body. Tenn. Code Ann. ' 49-2-203(a)(10). As noted
earlier, the local governing body has the authority to approve, or
disapprove, the proposed budget. Tenn. Code. Ann. ' 49-2201(1); Op. Tenn. Att’y Gen. 99-100. When the local governing
body adopts a school budget it appropriates funds for the budget.
Tenn. Code Ann. ' 49-2-201(1). The local governing body does
not have to seek the school board’s concurrence when it selects
which funds will be applied to the school budget. The selection of
funds is a part of the appropriation [FN5] process, which is
controlled by the local governing body. [At 2]
The statutes cited by TAG 04-098 are part of a comprehensive set of statutes dealing with
local school administration and finance, and that set of statutes points to the local board of
education and the local governing body being the prime movers in the school budget process, the
former as the creator of the budget, and the latter as the “decider” in the budget. Article XX, '
10 is arguably inconsistent with that school budget process by mandating a referendum to resolve
budgetary impasses between the Board of Education and the City Council.
Indeed, TAG 04-098 points to another comprehensive statute that deals with the school
budget process with which Article XX, ' 10 appears inconsistent: The Municipal Budget Law of
1982, found in Tennessee Code Annotated, ' 6-56-201 et seq. Tennessee Code Annotated, ' 656-202 says that, “The provisions of this part apply to any municipality that does not have budget
provisions in its charter that are at least as detailed as provided by ' 6-56-203(1) and (3).” The
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City Charter provisions that deal with the budget process (Article XVII) are close in that respect,
but still do not meet that standard.
Tennessee Code Annotated, ' 6-54-204 deals with the municipal school budget and says:
(a) The municipal school budget submitted by the board of
Education to the governing body shall include estimates of school
revenues, as well as estimates of expenditures necessary for the
operation of the school system for the next fiscal period.
(b) The governing body shall have no authority to modify or delete
an item of the school estimates and shall have the power to modify
only the total amount of the school budget, except in no event shall
a reduction in the school budget exceed the total sum required by
the board of education from current municipal revenues.
The Municipal Budget Law, then, also points to the relationship of the board of education
and the local governing body with respect to their respective budgetary powers. Nothing in that
comprehensive law appears to contemplate a referendum on the question of whether the board of
education or the local governing body shall win the budgetary war.
In the unreported case of Morgan County Board of Commissioners v. Morgan County
Board of Education, 1994 WL 111457 (Tenn. Ct. App), the county argued that the board of
education had the responsibility to submit its annual budget to the count commissioners, and that
the county commissioners had the right to change that budget in any way it chose, including line
item changes. The school board agreed that it had the responsibility to submit its annual budget
to the county commissioners, but that the county commissioners must adopt the budget as
submitted.
The Court held that the board of education had the authority to submit a budget, but that
the county commissioners had the right to reduce the total budget, but not to change line items. It
pointed to the statutes that govern local education budgets.
- The superintendent of education had a duty under Tennessee Code Annotated, ' 49-2301 to:
(2) Prepare, annually, a budget for the schools in the
superintendent (sic) school system, to submit the same to the board
of education for its approval and to present it to the county or other
appropriate local legislative body for adoption as provided by
charter or private legislative act.... [Emphasis is mine.]
- The duty of the board of education under Tennessee Code Annotated, ' 49-2203(a)(11)(A)(I) is to:
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Require the superintendent and chairperson of the local board to
prepare a budget on forms furnished by the commissioner of
education, and when the budget has been approved by the local
board, to submit it to the appropriate legislative body....
- The duty of the county commissioners under Tennessee Code Annotated, ' 49-2101(2)(A) was to:
Consider ... the recommendation of the county board of education,
school budgets for the county elementary and county high schools,
and to provide necessary funds to enable the county board of
education to meet all obligations under the adopted budgets.
The Court said in connection with those statutes that:
The courts since 1929 in the case of Smith v. Groce, 12 S.W.2d
715 (Tenn. 1929), have held that the County Commissioners are
not bound by the budget submitted by the Board. In this case the
Board submitted its budget which was considered by the County
Commissioners but a smaller budget was adopted . The Court
found that the County Commissioners clearly had discretion to
adopt a smaller budget. This same reasoning is followed in State
v. Polk, 54 S.W.2d 714 (Tenn. 1932}.
The Board in is submission of the school budget and the County
Commissioners in their adoption of the school budget must both
act in a reasonable and not in a capricious manner. State ex rel.
Bobo v. County of Moore, 341 S.W.2d 746 (Tenn. 1960). [At 3]
The Court went on to speak about the comprehensive nature of the educational statutory
scheme, which is significant because that statutory scheme applies to both city and county boards
of education:
The statutes, taken together, form a comprehensive statutory
scheme allocating responsibility for education among the State
Department of Education, the county board of education, and, to
some limited extent, the county board of commissioners. Although
the board of commissioners has no supervisory authority over the
board of education (citations omitted), the Legislature has
manifestly vested the authority to appropriate funds for county
purposes (including education) to that body alone, as is its
prerogative to do, (citations omitted), and while the preparation of
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the budget lies with the board of education, the county
commissioners are not wholly stripped of their traditional
discretion in making appropriations of county funds. “The county
school board and superintendent prepare the budget and it is then
submitted to [the county board of commissioners] evidently to
determine if the amount of the budget exceeded the total amount
of money that has been raised by taxation for general school
purposes,” (Citations omitted). Some degree of discretion in the
county commission is necessary so that a single body may oversee
a unified budgetary process to avoid exceeding the available
revenue to operate county services efficiently. Smith v. Groce, 12
S.W.2d 715 (Tenn. 1929). [At 4]
Here it should be noted that Tennessee Code Annotated, ' 49-2-301(f) to which the Court
pointed in speaking of the duty of the superintendent of education to prepare a budget says: “(23)
Prepare, annually, a budget for the schools...to submit the same to the board of education for its
approval and to present it to the county or other appropriate local legislative body for adoption as
provided for by charter or private legislative act...” At first glance, that language suggests that
Article XX, ' 10 is not inconsistent with the comprehensive statutory scheme regulating local
administration of education. Arguably, it does not conflict with the distribution of budgetary
authority among boards of education and local governing bodies, but merely adds a step in the
budgetary process when there is an impasse. But that extra step is the problem. That statute
provides that the budget be submitted to the local legislative body for approval as provided by the
charter; it does not provide for approval of the budget by referendum if there are differences
between the board of education and the local governing body. The language related to “approval
as provided by the charter or private legislative act” relates back to the local legislative body; that
is, to the approval of the budget submitted by the board of education by the local legislative body
as provided for by charter or private legislative act. A private act that goes further than that by
providing for a mandatory referendum to resolve an impasse has interjected a stop into the local
education budgetary process not contemplated by the state statutory scheme governing that
subject.
That seems to me the way the courts would see that provision, given what appears to be
the relatively clear distribution of authority among local government boards of education and
local governing bodies in Tennessee Code Annotated, Title 49, Chapters 2 and 3. Indeed,
Morgan County Board of Education, concludes that:
We note that if the County Commissioners were allowed to revise
line items, it would amount to a complete abrogation of the powers
of the Board to control the school system. We do not believe that
is in keeping with the line of cases cited herein above relating to
the powers of the Commission and Board respectively nor do we
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believe such to have been the intention of the legislature in crafting
their statutory design. [At 5]
The same thing is true of Article XX, ' 10. Allowing it to stand would intercept the
whole scheme in the Basic Education Act, and of the Municipal Budget Law of 1982 for the
distribution of authority among the school board and the city’s governing body. Those
comprehensive laws were not designed to permit local boards of education or local governing
bodies to play hardball with the school system via a mandatory referendum over who wins the
funding battle. Such a referendum totally usurps the authority of the city’s governing body to
make educational funding decisions assigned to it by comprehensive general law. In theory,
under Article XX, ' 2, such a battle could go on every year and entirely disrupt the budget
process contemplated by the Basic Education Act.
State v. County of Moore, 341 S.W.2d 746 (Tenn. 1960), also points to the policy
supporting the distribution of authority among boards of education and local governing bodies:
In Smith v. Groce, 158 Tenn. 225, 12 S.W.2d 715, it was held that
the County Court may be compelled by mandamus to levy a tax,
but not in any certain amount and in its discretion it may levy a
high school tax at less than the amount fixed in the budget of the
Board of Education.
Inn State ex rel Brown v. Polk County, 165 Tenn; 196, 54 S.W.2d
714, it was held that the county Court had discretion in fixing the
amount of tax and is not bound by the budget submitted by the
superintendent under T.C.A ' 49-214(12) [which is now 49-2203(b)]. But on page 199 bottom of 165 Tenn., on page 715 of 54
S.W.2d the Court said this must be a reasonable discretion.....
On page 200 of 165 Tenn., on page 716 of 54 S.W.2d the Court
stated that the Act contemplated a reasonable coordination
between the two agencies of the County. ‘Without such
coordination, there would be great confusion in the fiscal affairs of
the counties.’ [At 750] [Emphasis is mine.]
I can think of no reason that the above cases would not apply to municipal as well as
county school systems. They are dealing with statutes that survive in the state’s education laws
governing local funding of education, and policies that apply to the present time. Those cases
also indicate that under the state’s education laws governing local funding of education, when
either a city or county board of education or a city or county governing body has abused its
discretion with respect to funding requests or funding decisions, it is the courts that resolve the
dispute, not the public in a referendum.
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I think that there is a strong possibility that Article XX, ' 10 of the City Charter would be
held to have been superseded by the general laws of the state governing the local funding of
education.
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