Schools benefit if levy gets OK

Bredesen wants 40 cent-pack increase on cigarette tax

By Richard Locker, Commercial Appeal
February 6, 2007

NASHVILLE -- Gov. Phil Bredesen proposed nearly $250 million in new education spending Monday night, most of it paid for by a 40-cents-per-pack cigarette tax increase that he asked the state legislature to approve.

The governor's initiatives would mean major funding increases for Memphis City and Shelby County Schools because they heavily target districts with high rates of poverty and high rates of enrollment growth.

The tax plan -- the first of Bredesen's tenure as governor -- would raise the state cigarette tax to 60 cents a pack. Tennessee's current 20-cents-a-pack tax is among the lowest in the nation. The national average is $1 and the average of Tennessee's bordering states is 36 cents a pack, although several of them are considering tax increases this year.

Republicans, who control the state Senate, were noncommittal on the governor's tax proposal but said they are concerned about the risk of paying for a substantial increase in education funding with a tax on a declining number of smokers.

Bredesen's proposals include:

$120 million in new state funding for classrooms, based on a school district's enrollment of students eligible for low- and reduced-price lunches. The administration provided estimates to legislators indicating the plan could mean up to $24.5 million in new money for Memphis City Schools and $3.1 million for Shelby County Schools.

$27 million for high-growth districts like Shelby County Schools. There are no specific estimates yet on the distribution of these funds.

$25 million for additional pre-kindergarten classes, to be funded from general tax funds. Memphis has applied for an increase in state funding for pre-K classes.

$10 million for free community college tuition for high school graduates who score at least 19 on the ACT test, including at least a 19 on both its math and reading components.

$48 million in increased operating money for higher education, which will help hold tuition increases this fall to 6 percent.

$9.3 million to increase Tennessee's lottery-funded Hope Scholarship from the current $3,800 to $4,000 a year per recipient.

$3.8 million to make the number of non-Hope, need-based, state-funded scholarships to an additional 1,900 students.

In addition to those initiatives, Bredesen proposed using $100 million of the $300 million in lottery surplus funds to set up a state loan-guaranty pool that would allow K-12 school districts statewide to finance about $1.1 billion in new school construction and renovation at reduced interest rates.

The governor asked lawmakers to fund the proposals in his fifth annual State of the State address Monday night, which was televised statewide and focused exclusively on education.

"There are many other issues facing our state and we'll talk about them and work on them on future occasions. But tonight there's only one subject: educating our children," he said.

Although the state's formula for aid to "at-risk" students is based on school districts' enrollment of children whose family incomes make them eligible for free- and reduced-price meals, the money can be used for classroom enhancements for all children.

About 75 percent of Memphis City Schools' 119,000 students rate the "at-risk" description. City Schools Supt. Carol Johnson applauded the governor's effort to, she said, "target resources to our most needy and vulnerable students.

"Support for at-risk children and students learning English for the first time is at the top of our legislative agenda," she said.

Similarly, the plan to increase funding distributed to high-growth school districts for their rapidly increasing costs would benefit Shelby County Schools. The governor also wants to pay that money to the districts in the same year the growth occurs, instead of the system in use now in which the current year's funding is based on last year's enrollment.

"That's something our superintendent has been championing," said county schools spokesman Mike Tebbe. "We have about 1,000 more students per year. Since 1990, we've built 24 of our 49 schools, so we're having substantial growth every year."

Anticipating reaction to a tax increase, Bredesen said, "The argument for a cigarette tax is straightforward: Our schools need more money. We all talk the talk about public education; we need to walk the walk as well. Our cigarette tax is among the lowest in the nation."

He also acknowledged that some lawmakers have proposed raising tobacco taxes to reduce sales taxes on food. "I know there are many on both sides of the aisle who would like to reduce the sales tax on food. So would I.

"But our job is to choose among good things. Our state is already ... number 48 among the states in combined state and local taxes. Our future is vastly more tied to good schools than in trying to become number 49," he said.

Senate Republican Leader Mark Norris of Collierville said Republicans "embrace his willingness to move forward on education," but said the administration claimed a year ago that tobacco taxes were "an unreliable revenue source.

"And we can engage in conversation about the wisdom of social engineering through tax increases," Norris said, adding he would keep an open mind on the tax hike.

House Speaker Pro Tem Lois DeBerry, D-Memphis, said the governor's plan "is absolutely good for Memphis. We're very excited about it."

The tobacco industry is expected to fight the increase, but the proposal includes sweeteners for both Tennessee tobacco farmers and health advocates: a $6 million increase in programs to help growers move to other products and $15 million in smoking-prevention programs.