CHATTANOOGA (WRCB) -- Hamilton County Schools face an estimated $14.3 million shortfall in next years budget, thanks in part to an ongoing dispute with the County over $6 million in tax money. 

That's the topic that made for lively discussion during Thursday's School Board work session. 

It's called PILOTfunds or payment-in-lieu of taxes.  It comes from tax breaks offered to lure businesses like Volkswagen to Hamilton County.

The cash-strapped School Board would like to use the money to cover operation costs, but the County says the money should go towards building new schools. 

"We hear this every year.  Their short every year, some years they talk about closing several schools they do and they don't every year they talk about how many millions of millions of dollars their behind," says County Commissioner Joe Graham.

Not a lot of sympathy from Graham on the $14.3 million budget shortfall the school board faces next year.

"It's terrible when you have to talk about eliminating the budget on the backs of people working folks, it's a tough decision," says School Board Member David Testerman.

Thursday board members sifted through a long list of potential reductions, including a $75 to $200  increase in health care costs which could save as much as $4.8 million.  A $2 million reduction in maintenance, $700.000 cut from central office positions and services, the list goes on.

"There's a lot of things we can ask our employees to do, we're not in a position to give raises this year and haven't seen the forecast for next year," says School Board Member Mike Evatt.

But the reductions themselves aren't the only cause for tension, the $6 million the School Board may not get from PILOT funds is another sore spot.

"We need to stop worrying about what the commission is going to do as far as not giving it to us and continue to ask for it," says School Board Member George Ricks.

It's an issue the School Board and County are actively negotiating.

"They have a say now, we just had a committee meeting with them the other day and we're gonna sit down and work it out together the best use of the PILOT agreement money," says Graham.

Until then, the list of reductions can only equal worry for teachers about life in and outside of the classroom.

"We need to look around some more, and a lot deeper in some places because the children's needs need to come first and the teachers are the people that are who are hands on with the children," says Sandy Hughes, President Elect for Hamilton County Education Association.

The School Board and County have not yet set a date for their next negotiations meeting.  The School Board has called a special session meeting April 28th, that's when the reductions will go to a vote.  The budget goes before County Commission in May.


CHATTANOOGA (WRCB) - The Hamilton County School Board is in the middle of a work session.

The hot topic is the 2011-2012 Budget.    

An ongoing dispute with the county over tax dollars is ruffling a lot of feathers. 

The meeting began around 4:00 p.m. 

Not a lot of items on the agenda, the budget is definitely the biggest discussion point. 

The board is already estimating a $14.3 million shortfall for next year, thanks in part to a decision the county made to withhold $6 million in tax dollars the school system had planned to use for its operating budget. 

The county argues the money will used for schools, just not operations.

"As I brought that resolution forward, I believe the best use of that is the growth that's coming the growth that caused that revenue to be here, to use it for the growth in these schools and brick & mortar projects," says Joe Graham, Hamilton County Commissioner.

Latest updates from David Carroll via Twitter:


5:25 pm – Hamilton County Special Education Department has raised request from $850K to $1.3 million.

5:16 pm – Hamilton County Special Education Director calls situation "critical." Fears cuts could mean lawsuits.

4:47 pm - Deputy Supt Rick Smith calls budget "emergency." He thinks County Commission will help

4:53 pm - Thurman says current "computer-generated bus routes" make no sense

4:38 pm - Thurman, Scales spar angrily over Central Office cuts. Scales eventually goes silent.

4:36 pm - George Ricks says School Board needs to ask County Commission for more money. Thurman says it's a waste of time

4:29 pm - Rhonda Thurman says School Board "rolls over and plays dead" on teacher health insurance.

4:26 pm – Hamilton County Superintendent Scales wants to ask County Commission for $3.3 million.