IN THE CHANCERY COURT FOR DAVIDSON COUNTY, TENNESSEE
THE METROPOLITAN
GOVERNMENT OF NASHVILLE
AND DAVIDSON COUNTY,
METROPOLITAN NASHVILLE
BOARD OF PUBLIC EDUCATION,
and SHELBY COUNTY
GOVERNMENT,
Plaintiffs,

Case

No.3 0 :1 21

55%;

v.
VVVVVVVVVVVVVVVVVVVVVV

TENNESSEE DEPARTMENT OF
EDUCATION, PENNY SCHWINN, in
her official capacity as Education
Commissioner for the Tennessee
Department of Education, and BILL LEE,
in his official capacity as Governor for the

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State of Tennessee,

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Defendants.

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Plaintiffs,

The

Metropolitan

Government

of Nashville

and

Davidson

County

(“Metropolitan Government”), the Metropolitan Nashville Board of Public Education, and the
Shelby County Government seek declaratory judgment and injunctive relief from the “Tennessee

Education Savings Account Pilot Program,” Tenn. Code Ann. §§ 49-6-2601, et seq. (“ESA Act”),

which the Tennessee General Assembly passed and the Governor signed during the 2019
legislative session. This controversial legislation transfers critical state and local funding from
struggling public schools to private schools. It was so unpopular that it garnered a bare majority

of support in the General Assembly only by exempting from its scope every county in the state but
two, Davidson and Shelby, which alone bear the bill’s financial burdens.

(N0328518.1)

I'

i
a

f‘

 The Tennessee Constitution prohibits the General Assembly from unilaterally and

arbitrarily placing such an unfair burden on individual counties. The “Home Rule” Amendment in

Article XI, Section

9 mandates that any General Assembly act

“local in form or effect” and

“applicable to a particular county” is “void and of no effect” unless the act, by its terms, requires
approval by a two-thirds vote

of the county’s legislative body or a majority of the county’s voters.

The General Assembly cannot impose its

If the legislature

will on only two counties without their approval.

believes that education savings accounts are good policy, it may pass a bill

general application so that all counties share the purported benefits

of

the program.

If

of

the

legislature prefers to limit the bill’s application to two counties, it must include a local-approval

option and hope the program’s merits will convince the affected counties to choose to participate.
The ESA Act does neither and is the very model

of such prohibited legislation.

The Home Rule Amendment Violation is not the only constitutional defect in the ESA Act.

Its disparate and arbitrary treatment

of Davidson

and Shelby counties is not rationally related to

any legitimate governmental interest and therefore violates the Tennessee Constitution’s equal

protection guarantees in Article I, Section 8, and Article XI, Section 8. Furthermore, by imposing
a heavy

financial burden solely on the Davidson and Shelby County school districts, the legislation

violates the constitutional requirements of Article XI, Section 12, which requires the State to

“provide for the maintenance, support and eligibility standards of a system of free public schools.”
For these reasons, the Court should declare the ESA Act unconstitutional and enjoin its
enforcement.

JURISDICTION AND VENUE
1.

Ann.

§

{N0328518.1)

This Court has subject matter jurisdiction over this action pursuant to Tenn. Code.

16-11-102.

2

 2.

This Court has the power to enter a declaratory judgment and issue injunctive relief

pursuant to Tenn. Code Ann.

§

1-3-121, Tenn. Code Ann.

§

29-1-101, Tenn. Code Ann. §§ 29-14-

102 and —103, and Term. R. Civ. P. 65.
3.

This Court has personal jurisdiction over Defendants pursuant to Tenn. Code Ann.

§§ 20-2-222 and -223.

4.

Venue is proper in this judicial district pursuant to Tenn. Code Ann. §§ 4-4-104

and 20-4—101(a), as this cause
5.

of action arose in Davidson County,

Tennessee.

Plaintiff Metropolitan Board of Public Education cannot be barred from filing this

complaint by the ESA Act, Tenn. Code Ann.

§

49-6-2611(d). By attempting to render the

constitutionality of its actions unreviewable, the legislative branch imperrnissibly usurped the role

of the judiciary.

See State v.

Mallard, 40 S.W.3d 473, 480-482 (Tenn. 2001) (“Only the Supreme

Court has the inherent power to promulgate rules governing the practice and procedure of the
courts in this state”).

PARTIES
6.

Plaintiff Metropolitan Government is

formed by the City

of Nashville

a consolidated

city and county government

and Davidson County and incorporated pursuant to Tenn. Code

Ann. §§ 7-1-101, et seq. The Metropolitan Government is responsible for adopting a budget for
its public schools and administering the schools through its Metropolitan Board

of Public

Education. Metropolitan Charter §§ 9.01, 9.03.
7.

Plaintiff Metropolitan Board of Public Education administers and controls the

Metropolitan Government’s system of public schools established by the Metropolitan Charter.
Metropolitan Charter

§

9.01; see also Tenn. Code Ann. §§

49—2—201,

et seq. The Metropolitan

Government’s school system is commonly referred to as Metropolitan Nashville Public Schools

(“MNPS”).
(N0328518.1)

3

 8.

Plaintiff Shelby County Government is

a home charter

local government in

Tennessee. Shelby County Government is responsible for adopting a budget for its public schools

and administering Shelby County Schools (“SCS”) through the Shelby County School Board.
9.

Defendant Tennessee Department

of Education (“TDOE”)

is the State

of

Tennessee’s education agency. The TDOE is responsible for the enforcement and administration

of the ESA Act. The TDOE

is located at 710 James Robertson Parkway, Nashville, Tennessee

37243.
10.

Defendant Dr. Penny Schwinn is the Education Commissioner for the TDOE. Dr.

Schwinn is sued in her official capacity and has an office at 710 James Robertson Parkway,

Nashville, Tennessee 37243.
11.

Defendant

Bill

Lee is the Governor

of

the State

of

Tennessee. The Tennessee

Constitution vests the Governor with “the supreme executive power Of this state.” TENN. CONST.,
art.

III,

§ 1.

As the Chief Executive for the State Of Tennessee, Governor Lee has a constitutional

obligation to “take care that the laws be faithfully executed.” Id. As the Chief Executive, Governor
Lee has the obligation to ensure that laws be executed consistent with the mandates Of the
Tennessee Constitution. Governor Lee is sued in his

official capacity and has an office at State

Capitol, lst Floor, 600 Dr. Martin Luther King, Jr. Blvd., Nashville, Tennessee 37243.

FACTS

I.

THE ESA ACT IS A LEGISLATIVE ACT THAT IS LOCAL IN FORM AND EFFECT BECAUSE
IT APPLIES ONLY TO DAVIDSON AND SHELBY COUNTIES AND HAS NO PROVISION FOR
LOCAL APPROVAL.
12.

In May 2019, the Tennessee General Assembly passed the ESA Act, Public Chapter

506, establishing the “Tennessee Education Savings Account Pilot Program.” Tenn. Code Ann.
§§ 49-6—2601, et seq.

momma.»

4

 13.

Under the ESA Act, a participating student

will

receive an education savings

account to pay tuition, fees, and other expenses related to attending a participating private school.
The student’s account is funded by diverting funds from the student’s public-school district in an

amount equal to the district’s per-pupil state and local funding required by the state’s Basic

Education Program (“BEP”) or the combined (state and local) statewide average of BEP funding,

whichever is lower. Tenn. Code Ann. §§ 49-6-2603(a)(4), —2605(a), -2607(a).
14.

and

Shelby

TDOE plans to launch the program for the 2020-2021 academic year in Davidson
counties.

Education

TDOE,

Savings

Account

(ESA)

Program,

https://www.tn.gov/education/school-options/esa—program.html.
15.

TDOE is soliciting “Intent to Participate” forms from interested private schools. At

least 57 private schools submitted Intent to Participate forms as

of January

21, 2020, with 26

schools in the Nashville area, 30 schools in the Memphis area, and one in Knoxville. Marta W.

Aldrich, These 5 7 private schools want in on Tennessee ’s new voucher program, CHALKBEAT, Jan.
21, 2020, https://chalkbeat.org/posts/tn/2020/01/21/here-are-the-57-private—schools-wanting-to-

participate-in-tennessees-new—voucher-program/.
16.

The Tennessee Code refers to public-school systems as “local education agencies”

or “LEAs.” Tenn. Code Ann.
a

§

49-1-103(2). The definition of LEA includes but is not limited to

“metropolitan school system” and

a

“county school system.” MNPS is a metropolitan school

system. SCS is a county school system.
17.

The ESA Act strictly limits the pool

of public-school

education savings accounts to two LEAs: MNPS and SCS.

(N0328518.1)

5

students eligible to receive

 18.

The ESA Act defines “eligible student” as a student from a family with annual

household income not exceeding twice the federal income eligibility guidelines for free lunch and

who meets the following geographic restrictions:

“(i) is zoned to attend a school in an LEA, excluding the achievement school district
(ASD), with ten (10) or more schools:
(a) Identified

as

priority schools in 2015,

accountability system pursuant to

§

as

defined by the state’s

49-1—602;

(b) Among the bottom ten percent (10%) of schools, as identified by the
department in 2017 in accordance with

§

49-1-602(b)(3); and

(c) Identified as priority schools in 2018, as defined by the state’s

accountability system pursuant to

§

49-1—602; or

(ii) Is zoned to attend a school that is in the ASD on the effective date of this act.”
Tenn. Code Ann. §49-6-2602(3)(C).
19.

“Priority” and “bottom ten percent” schools referred to in Section

2602(3)(C) are described in the relevant code sections
a.

Tenn. Code Ann.

§

as

49—6—

follows:

49-1-602(b)(1) states that, at least every three years, “the

commissioner of education shall recommend for approval to the state board a

listing of all schools to be placed in priority, focus or reward status.”
b.

Tenn. Code Ann.

§

49—1-602(b)(2) states that “[s]chools identified as priority

schools shall include the bottom five percent (5%)

of schools in performance,

all public high schools failing to graduate one-third (1/3) or more of their
students, and schools with chronically low-performing subgroups that have not

improved after receiving additional targeted support.”

(N0328518.1)

6

 c.

Tenn. Code Ann.

§

49-1-602(b)(3) states, “By October

1

of the year prior to the

public identification of priority schools pursuant to subdivision (b)(l), the
commissioner shall notify any school and its respective LEA
among the bottom ten percent (10%)

if the

school is

of schools in overall achievement

as

determined by the performance standards and other criteria set by the state

board.”
20.

The “achievement school district (ASD)” referred to in Section 49-6-2602(3)(C) is

“an organizational unit of the department of education, established and administered by the
commissioner for the purpose of providing oversight for the operation of schools assigned to or
authorized by the ASD.” Tenn. Code Ann.
1,

§

2017, are limited to “priority schools.” Id.
21.

49-1-614(a). Schools assigned to the ASD after June
§

49-1-614(c)(1).

The “eligible student” definition in the ESA Act is based on the number

of schools

on the priority lists for 2015 and 2018 (the two priority schools lists that immediately preceded the

ESA Act’s passage) and the bottom 10% list in 2017, and on schools in the ASD

as

of May

24,

2019, the ESA Act’s effective date.
22.

Even though the “eligible student” definition is based on the number of priority and

bottom 10% schools and ASD schools in an LEA, the ESA Act does not limit participation only
to students in low-performing schools. Any income-eligible families in those school districts are

eligible for an ESA, whether their children attend
23.

a

low-performing school or not.

In 2015, 83 schools comprised the priority list. Seventy-one of those schools came

from five LEAs, and the other twelve schools were in the ASD.
24.

In 2015,

15

out

of 154 Davidson County

schools (9.7%) and 45 out

County schools (20.4%) were in a priority status. The same year,

(NOS-3285181}

7

5

out

of 221 Shelby

of 79 Hamilton County

 schools (6.3%), 4 out

of 90 Knox County schools (4.4%),

and 2 out

of 27 Madison County schools

(7.4%) were in a priority status.
25.

2015

is

A true and correct list of the schools that the TDOE identified as priority schools in
available

at

https://www.tn.gov/education/data/accountability/2015-school-

accountabilityhtml.
26.

In 2017, the TDOE identified 168 (later reduced to 166) schools from

14

LEAs on

its list of bottom 10% schools. Caroline Bauman, Is your school in Tennessee ’5 bottom 1 0 percent?

Here’s a list

of

166 schools the state says need to improve, CHALKBEAT, Feb. 8, 2018,

https://chalkbeat.org/posts/tn/2018/02/08/is-vour-school-in-tennessees-bottom-10-percent-heresa—list-of—l 66-schools-that-need-to-improve-academicallv/.

27.

In 2017,

41

out of 163 Davidson County schools (25.2%) and 65 out of 206 Shelby

County schools (31.6%) were on the bottom 10% list. The same year, 2 out

of 7

Fayette County

schools (28.6%), 13 out of 78 Hamilton County schools (16.7%), 7 out of 90 Knox County schools

(7.8%), and 8 out
28.

of 23 Madison County schools (34.8%) were on the bottom

10% list.

In 2018, 82 schools comprised the priority list. Sixty-four of those schools came

from seven LEAs, with the other eighteen schools in the ASD.
29.

In 2018,

21

out of 163 Davidson County schools (12.9%) and 27 out of 206 Shelby

County schools (13.1%) were in a priority status. The same year,
(14.3%), 9 out

of 78 Hamilton County

1

out of 7 Fayette County Schools

schools (11.5%), and 4 out

of 23 Madison County

schools

(17.4%) were in a priority status. Knox County had no priority schools in 2018.
30.

Hamilton and Madison counties experienced a significant downgrade in 2018 from

their previous priority school listings in 2015. Madison and Fayette counties had a higher
concentration

(N0328518.1)

of priority

schools than in Davidson and Shelby counties in 2018. Hamilton

8

 County’s concentration of priority schools was only slightly lower than in Davidson and Shelby
counties in 2018.
31.

2018

is

A true and correct list of the schools that the TDOE identified as priority schools in
available

at

https://www.tn. gov/ education/ data/accountabilitv/201 8—school-

accountabilityhtml.
32.

Based on the dates and number

of schools used to identify the LEAS subject to the

ESA Act, only Davidson County and Shelby County met the requirements of having ten or more
schools that were identified as priority schools in 2015, were among the bottom 10%

of schools in

2017, and were identified as priority schools in 2018.
33.

Only Davidson County and Shelby County had schools in the ASD

as

of the ESA

Act’s effective date of May 24, 2019.

II.

THE LEGISLATIVE HISTORY OF THE ESA ACT SHOWS THAT THE GENERAL ASSEMBLY
INTENTIONALLY DRAFTED THE ACT TO BE A BILL LOCAL IN FORM AND EFFECT.
APPLYING ONLY TO DAVIDSON AND SHELBY COUNTIES, AND TO “PROTECT” ALL
OTHER TENNESSEE COUNTIES FROM THE ACT’S HARMFUL CONSEQUENCES.

A. House Bill No. 939 Moves Through Committees
34.

House Majority Leader William Lamberth (R—Portland) filed House

on February 7, 2019 as a “caption

Bill No.

939

bill.” A caption bill contains a non-substantive amendment to

existing law intended to meet the deadline for filing legislation without revealing the real purpose

of the legislation. Under

House rules, caption bills are held on the House clerk’s desk and not

allowed to proceed through committees until an amendment is filed that “makes” the bill and
contains the substance
35.

House

of the legislation.
Bill No.

939 proceeded to the House Curriculum, Testing,

Subcommittee on March 19, 2019, after Amendment No.

(N0328518.1)

9

l

& Innovation

(HA0188) to the bill was filed by Rep.

 Mark White (R-Memphis). Rep. White represents significant portions of the cities of Germantown
and Collierville in Shelby County.
36.

Amendment No. I sought to add a new part to Title 49, Chapter 6 of the Tennessee

Code to be known as the “Tennessee Education Savings Account Act.”
37.

Amendment No.

1

placed several restrictions on eligibility for an ESA. Most

significantly for this litigation, the amendment defined “eligible student” in Section 49-62602(3)(C) to be a student “zoned to attend a school in an LEA with three (3) or more schools
among the bottom ten percent (10%)
38.

of schools in accordance with § 49-1-602(b)(3).”

When Amendment No.

1

was filed, the 2017 list was the most recently compiled

bottom 10% list. According to that list, six school districts had three or more schools in the bottom
10%: Davidson, Hamilton, Knox, Madison, and Shelby counties and the ASD. These were the

only school systems to which Amendment No.

applied. The Germantown and Collierville school

1

districts, which Rep. White represented, were not covered by the Amendment.
39.

The House Curriculum, Testing,

bill for passage

& Innovation Subcommittee recommended

if amended as set forth in Amendment No.

1.

the

The House Education Committee

Government Operations Committee; Finance, Ways, & Means Subcommittee; and Finance, Ways,

& Means Committee also recommended the bill for passage if amended as set forth in Amendment
No.

1.

40.

In the House Finance, Ways, & Means Committee hearing on April 17, 2019, Rep.

Matthew Hill (R—Jonesborough) referred to the bill

as a

asked by Rep. Jason Zachary (R-Knoxville) to define

was a pilot program because

“four-county pilot ESA program.” When

“pilot program,” Rep. Hill responded that it

it “limits it down to just four counties” and “will

stay in those four

counties unless the legislature were to ever choose in the future to revisit the issue.”

(N0328518.1)

10

 B. House
41.

Bill No. 939 Is Debated on the House Floor

Rep. White withdrew Amendment No.

1

when House

Bill No.

939 was considered

on the House floor for third and final reading on April 23, 2019. The House then approved

Amendment No. 2 (HA0445), which Rep. Susan Lynn (R—Mt. Juliet) sponsored.
42.

Amendment No. 2 made multiple changes to the Act. Most significantly, it placed

even more limits on the number
43.

of LEAs subject to the Act.

Amendment No. 2 changed the definition of “eligible student” to be a student who,

among other requirements

“[i]s zoned to attend

a school

in an LEA that had three (3) or more

schools identified as priority schools in 2015 in accordance with

§

49-1-602(b) and that had three

(3) or more schools among the bottom ten percent (10%) of schools as identified by the department

in 2017 in accordance with
44.

§

49-1-602(b)(3).”

Amendment No. 2 applied the Act only to LEAs with three or more schools among

the bottom 10% based on 2017 data and three or more schools identified as priority schools based

on 2015 data.
45.

The LEAs with three or more priority schools in 2015 were Davidson, Hamilton,

Knox, Madison, and Shelby counties.
46.

The LEAs with three or more schools among the bottom 10%

of schools in 2017

were: Davidson, Hamilton, Knox, Madison, and Shelby counties.
47.

Because all criteria for defining an “eligible student” were tied to specific years in

Amendment No. 2, no new LEAs could ever be added to or removed from the definition without
action by the General Assembly. The Act as amended by Amendment No. 2 would have applied

in perpetuity, unless amended, only to Davidson, Hamilton, Knox, Madison, and Shelby counties.

(N0328518.1)

ll

 The LEAs represented by Rep. Lynn, the sponsor

48.

of Amendment No.

2, were not

included in her proposed amendment.
Rep. Jason Powell (D-Nashville) stated on the House Floor that the entire Davidson

49.

County delegation was opposed to this bill. Rep. Powell sought to exclude Davidson County from
the

bill by filing Amendment No.

5

(HA0451). The House voted to table Amendment No. 5.

Rep. Dwayne Thompson (D-Cordova), whose district was also affected, challenged

50.

the constitutionality

of the bill’s limited application and sought to exclude Shelby County from the

bill by filing Amendment No.

6

(HA0452). The House voted to table Amendment No. 6.

Rep. John Ray Clemmons (D-Nashville) stated on the House floor

51.

“[w]e all know

why the language is the way it is, it seeks to single out Davidson and Shelby counties

unconstitutionally.”
Rep. Clemmons sought to make the

52.

Amendment No.

identified

as

13

bill

an act

of

general application by filing

(HA0462) to include within the Act any LEA that had three or more schools

priority schools in the immediately preceding priority cycle and had three or more

schools among the bottom 10%

of schools for

the most recent year in which the Department

identified such schools. The House voted to table Amendment No. 13.
53.

Even after the scope

received the bare majority
50 ayes and 48 nays, on

54.

of House Bill No.

939 was narrowed by Amendment No. 2,

it

of votes required by the Tennessee Constitution to pass legislation, with

April 23, 2019.

This passage came after the vote was held open for 40 minutes with the House

deadlocked at 49 ayes and 49 nayes.
55.

Rep. Jason Zachary (R-Knoxville) changed his vote from nay to aye to break the

tie, later telling reporters on camera that he had received assurances from then-House Speaker

(N0328518.1)

12

 Glen Casada (R-Franklin) that Knox County would be excluded and “held harmless” from the
Senate version

premise

of the bill.

Rep. Zachary further stated,

of BSA, but I couldn’t

Gonzales, and Natalie Allison,

do

“I

support the ESAs and I support the

it unless Knox County was taken out.” Joel Ebert,

Bill giving parents public

Jason

money for private school narrowly

passes House in historic vote, THE TENNESSEAN, Apr. 23, 2019, video statements from Rep.

Zachary

Then-House

and

Speaker

Casada

available

at

https://www.tennessean.com/story/news/politics/2019/04/23/tennessee-school-vouchers-bill-leeeducation—savings—accounts-house—vote/3548033002/.
56.

Then—House Speaker Casada confirmed Rep. Zachary’s statements, stating on

camera: “Knoxville, Knox County

will be taken out.” Bill giving parents public money for private

school narrowly passes House in historic vote, THE TENNESSEAN, Apr. 23, 2019, video statements

from

Zachary

Rep.

and

Then-House

Speaker

Casada

available

at

https ://www.tennessean.com/story/news/politics/20 l 9/04/23/tennessee—school-vouchers-bill-lee—

education-savings-accounts-house-vote/3548033002/.
57.

Rep.

Hill summarized the House majority’s dual motives of unilaterally imposing

the ESA Act on Davidson and Shelby counties while “protecting” every other school district from
the

bill when he

stated on the House Floor: “Today, on this Floor, the House is leading. We are

leading the way to protect LEAs, while also ensuring that our poorest children in those deep blue

metropolitan areas have a fighting chance at a quality education.”
58.

Recognizing that the severe limits on applicability made the Act constitutionally

vulnerable, Amendment No. 2 added a new Section 49-6-2611(c) purporting to deprive local
boards

of education of “authority to

challenging the legality

(N0328518,1)

assert a cause

of this part.”

1

3

of action, or intervene in any

cause

of action,

 C. Senate
59.

Bill No. 795 Moves Through Committees

Senate

Majority Leader Jack Johnson (R-Franklin) filed Senate Bill No. 795, the

Senate companion to House

60.

Bill No.

939, on February 5, 2019.

On April 10, 2019, the Senate Education Committee recommended Senate

795 for passage with Amendment No.
61.

1

Bill No.

(SA0312) by Sen. Dolores Gresham (R-Somerville).

This amendment was identical to Amendment No. l (HA0188) to House

Bill No.

939, applying the Act to four counties—Davidson, Hamilton, Knox, and Shelby—-with the

potential to automatically include or drop counties in the future.
62.

Amendment No.

1

did not apply to Sen. Gresham’s home county of Fayette County

or to any of the other six counties in Sen. Gresham’s district, despite Fayette County having two
out

of seven

schools (28.6%) on the 2017 bottom 10% list and one out

on the 2018 list

of priority

D. Senate
63.

Bill No.

1,

schools (14.3%)

schools.
795 Is Debated on the Senate Floor

When Senate

Amendment No.

of seven

Bill No.

795 reached the Senate Floor, Sen. Gresham withdrew

and the Senate voted to substitute House

Bill No.

939 as adopted by the House

(House Amendment No. 2) as the companion Senate bill. The House version applied the Act to

four counties: Davidson, Hamilton, Knox, and Shelby.
64.

Immediately thereafter, the Senate adopted Senate Amendment No.

Sen. B0 Watson (R-Chattanooga),

5

(SA0417) by

which stripped the language from House Bill No. 939 and

substituted new language.
65.

The language in Senate Amendment No.

5

further narrowed the definition of

“eligible student” in Section 49-6-2602(3)(C) and further narrowed the number of counties
covered by the bill.

(N0328518.1)

l4

 The new language increased from three to ten the number of schools that had to be

66.

identified

as

priority schools in 2015 and 2018 and increased from three to ten the number of

schools that had to be among the bottom 10%
67.

of schools in the

state in 2017.

The new language also included within the definition

of “eligible student” a student

zoned to attend a school in the state’s ASD on the act’s effective date.
68.
5

By narrowing the definition of “eligible student” in this manner, Amendment No.

removed Knox County and Hamilton County, Sen. Watson’s home county, from the bill’s

application. Knox County had four priority schools in 2015 and none in 2018. Hamilton County
had five priority schools in 2015 and nine in 2018.
69.

The General Assembly utilized the 2018 priority schools list to define “eligible

student,” even though the 2018 list was based on unreliable TNReady test results for the 2017-18
school year. The General Assembly had previously passed legislation precluding any school from

being identified as a priority school, any school from being assigned to the ASD, and any state

report card “letter grade” from being assigned to a district based on “student performance and
student growth data from the TNReady assessments administered in the 2017-2018 school year.”
Tenn. Code Ann.

§

49-1-602(a)(4); Tenn. Code Ann.

§

49-1-228(e). The General Assembly passed

this legislation following a disruptive breakdown in the TNReady assessment process during the
2017-18 school year.
70.

The only counties encompassed by the new definition

Amendment No.
71.

5

of “eligible student” in

were Davidson and Shelby counties.

All criteria for defining

an “eligible student” in Amendment No. 5 were based on

specific years; therefore, no LEAs could ever be added to or removed from the definition without
action by the General Assembly.

(N0328518.1)

1

5

 Sen. Steven Dickerson (R-Nashville) stated on the Senate

72.

was first proposed,
and

floor that when the bill

it “was more expansive, covered more counties, and in order to keep it alive

it keep votes going, it shrunk down in scope.”
Sen. Dickerson introduced Amendment No. 3 to make the

73.

Act apply “statewide” to

all LEAs by deleting the language in Section 49-6-2602(3)(C), thereby removing the requirements
related to priority schools and lowest-performing schools. Sen. Dickerson also introduced

Amendment No. 4 that, in the alternative, would expand the number

of LEAs covered by

Section

49-6-2602(3)(C) to include any LEA with at least three priority schools in 2015 and at least three
schools in the bottom 10% in 2017 and schools in the ASD.
Sen. Dickerson expressed concerned about the

74.

“unfair” process, noting that House

votes were acquired based on promises to exclude certain counties from the bill:
So, for this bill to really be fair, I think it needs to apply to every child in Tennessee.
There are members in this chamber who have said that they will vote for this bill
because it does not apply to their county. It’s an okay bill, so long as it does not
it’s a good bill, we should embrace it for every
apply to their county. I think
county. And not to cut with too fine a point here, but in the, our, our chamber down
the hall, the 50th vote came with the specific stipulation that this bill would not
apply to the 50th vote’s county. It also came with a significant financial reward for
that individual’s county, reports are to be believed. And I really worry that this is
very unfair, and this is not the way that we should be doing our business. I think
this comes down to a victory at any cost.

if

if

Sen. Dickerson

75.

withdrew Amendment No.

3

and Amendment No. 4 when it became

clear they would be defeated.
76.

The Senate adopted House

Bill No.

April 25, 2019.

(N0328518.1)

16

939, as amended, with 20 ayes and 13 nays, on

 E. Conference Committee Report and Final Passage
77.

When the Senate’s version

of the bill was transmitted to the House, the House non-

concurred in the amendments to the bill adopted by the House. The Senate refused to recede from
the amendments. The House refused to recede from its non—concurrence.
78.

On April 30, 2019, the House and Senate speakers appointed members to a

conference committee to resolve the differences between the two bills. On May

1,

the conference

committee submitted its report to both chambers.
79.

The conference committee

bill retained the definition of “eligible student” in the

bill as adopted by the Senate, which limited the bill’s application to Davidson and Shelby counties
and ensured that the
80.

against the

bill could never apply to any other county.

Rep. Patsy Hazelwood (R—Signal Mountain), a resident

bill when it

passed the House on

April 23, 2019, but

of Hamilton County, voted

she voted

for the conference

committee report.
81.

“I

Rep. Hazelwood explained on the House floor on May

committed to vote for ESAs

if the

1

why she changed her vote:

Hamilton County was excluded from the program. The

language that’s in this conference report here today does that. As a result,

I’m going to be keeping

my commitment and I’m going to vote for this bill.”
82.

the

Sen. Joey Hensley (R-Hohenwald), speaking on the Senate

floor on May

1, asked

bill’s sponsor to confirm that the bill only applied to two counties, with no exceptions, saying,

“[I] just want it to

be on the record and assured that this conference report continues to prevent

any future LEAS from being included in this.”
83.

Sen. Hensley wanted to

confirm that “no other LEA will be able to grow into the

program over the years.”

(N0328518.1)

1

7

 84.

Bill

sponsor Sen. Dolores Gresham (R-Somerville) responded to Sen. Hensley,

“That’s the intent of the General Assembly today.”
85.

The

bill reported out by the conference committee contained the legislature’s first

written reference to the Act

as a

“pilot program”

and stated that its intent was to provide “funding

for access to additional educational options to students who reside in LEAs that have consistently
and historically had the lowest performing schools.”
86.

references to a

Sen. Yarbro (D—Nashville) speaking on the Senate

“pilot project”

a

floor on April 25, 2019, called

“false premise.” He noted that the bill, unlike true pilot projects,

did not have a “sunset” provision. Rather, he said, the bill created a permanent $110 million state
program for 15,000 students in only two counties.
87.

The Conference Committee report included an unusual exception to the standard

severability clause, stating that
not expand the application”

if any provision of the act were held invalid, that invalidity “shall

of the

act to eligible students other than those identified in Section

2602(3), i.e., students in Davidson and Shelby counties. In effect, this is a “reverse severability
clause” because

it provides that if the provisions that limit the ESA Act’s

scope to Davidson and

Shelby counties are struck down, then the entire Act fails.
88.

The Conference Committee report reinstated the language from House

that a local board

of education does not have authority to

assert a cause

Bill No. 939

of action challenging the

Act.
89.

Both the House and Senate adopted the Conference Committee report on May

2019, the House by 51 ayes and 46 nays, and the Senate by 19 ayes and 14 nays.

(NOSZBSIBJ)

1

8

1,

 F. IMPLEMENTATION OF THE ESA ACT CONFIRMS THAT THE ACT APPLIES ONLY T0
TWO COUNTIES
90.

The TDOE is charged by the ESA Act with implementation

Ann. §§ 49-6-2604,
91.

—2605,

of the Act. Tenn. Code

-2606, -2607, -2608.

As part of implementation, TDOE created an ESA Program website. The website

states unequivocally that the ESA Program applies only

in Davidson and Shelby counties and will

reduce state and local BEP funding from those LEAS:
Tennessee’s Education Savings Account (ESA) program is planned to launch for
the 2020-21 school year in Davidson and Shelby counties. With the ESA program,
eligible students assigned to schools in Davidson County, Shelby County, or the
Achievement School District can use state and local Basic Education Program
(BEP) funds toward expenses, such as tuition or fees, at participating private
schools.

TDOE, “Education Savings Account (ESA) Program,” https://www.tn.gov/education/schooloptions/esa-programhtml.
92.

purposes”

The State Board

of the ESA Act.

Board filed a Notice

of Education

is authorized to promulgate rules “to effectuate the

Tenn. Code Ann. §§ 49—6-2603(l), -2605(a), -2608(f), -2610. The State

of Rulemaking Hearing containing proposed rules to effectuate the ESA Act

with the Tennessee Secretary of State on August

11, 2019. Those rules were posted

comment, and a public hearing was held on October
93.

1,

for public

2019.

Following the Rulemaking Hearing, the State Board filed

a

Rulemaking Hearing

Rule(s) Filing Form on November 27, 2019.
94.

The General Assembly’s Joint Government Operations Committee met on January

27, 2020, to consider the State Board’s proposed ESA Program rules. The Committee voted to

make a “positive recommendation”

of the rules over objections by Committee

Davidson and Shelby counties.

(N0328518.1)

1

9

members from

 95.

correct

The rules are scheduled to become effective on February 25, 2020.

copy

of

proposed

the

rules

A true

available

is

and
at

https://publications.tnsosfiles.com/rules filings/ 1 l -l 9-19.pdf.
96.

The ESA Act’s definition

of

an

“eligible student” does not identify Shelby or

Davidson County by name, instead relying on the number of priority and low-performing schools

in the counties to eliminate all other school districts from its application. Tenn. Code Ann.

§

49-

6-2602(3)(C).
97.

In contrast, the State Board’s rules for ESAs define an eligible student

as one

who,

among other requirements, is “zoned to attend a school in Shelby County Schools, Metropolitan

Nashville Public Schools, or is zoned to attend

a school that was

in the Achievement School

District on May 24, 2019.” Prop. Rule 0520-01-16—.02(11)(b).

III.

THE ESA ACT WILL HAVE A DETRIMENTAL IMPACT ON THE METROPOLITAN
GOVERNMENT AND SHELBY COUNTY GOVERNMENT’s BUDGETS AND ON MNPS AND
SCS OPERATIONS AND FINANCE.

A. The ESA Act’s Impact on Metropolitan Government Revenues
98.

The BEP is defined under Tennessee law as a statutory “formula for the calculation

of kindergarten through

grade twelve (K-12) education funding necessary for our schools to

succeed.” Tenn. Code Ann.

§

49-3-3 02(3). The amount

of BEP funding allocated to each LEA for

public education is determined exclusively by Tennessee Code Annotated Title 49, Chapter 3, Part
3.

99.

Ann.

§

The BEP includes a state share

49-3-356. “From the local portion

for equalization purposes pursuant to

a

of funding and a local

of such

share

of funding. Tenn.

revenues, there shall be a distribution

formula adopted by the state board

. . .

Code

of funds

.” Id. The formula

is intended to account for the local jurisdiction’s ability to raise revenue from property taxes. Tenn.

(N0328518.1)

20

 Code Ann.

of

§

49-3-307(a)(10); see also TDOE, “The Basic Education Program,” General Overview

the

BEP,

https://www.tn.gov/sbe/committees-and-initiatives/the—basic-education-

programhtml.
100.

The BEP appropriation for each LEA is calculated to include four components:

instructional salaries and wages, instructional benefits, classroom, and nonclassroom. Tenn. Code
Ann.
§

§

49-3-307(a)(2)(A).

All BEP funds “shall be spent on BEP components.” Tenn.

Code Ann.

49—3-351(c).
101.

The BEP formula is “student-based such that each student entering or exiting an

LEA shall impact generated funding.” Tenn. Code Ann.
102.

§

49-3-307(a)(11).

The Metropolitan Government is responsible for adopting a budget for the MNPS.

Tenn. Code Ann. §§ 49—2-101, et seq.
103.

The total MNPS operating budget for the current fiscal year 2019-2020 is

$914,475,600. This amount represents approximately 39% of the Metropolitan Govemment’s total
budget.
104.

Of that total budget for the current fiscal year, MNPS receives $285,964,909 of

state funding under the BEP formula, which equals $3,493 per student based on the prior year’s

enrollment of 81,876. To calculate enrollment for funding purposes, the TDOE uses a weighted
average to determine the average daily membership
105.

(“ADM”) for the prior year.

For the current fiscal year, the BEP requires the Metropolitan Government to

contribute a local match of $385,242,000, which averages to $4,705 per pupil. In other words, the

Metropolitan Government’s local share of funding under the BEP formula is substantially larger
than the state’s share

{N0328518.1}

of that funding for MNPS. Furthermore,

21

the Metropolitan Government

 contributes significantly more funding to MNPS than the BEP requires. The Metropolitan

Govemment’s total local contribution to the MNPS budget is $628,510,691, or $7,676 per pupil.
106.

The Shelby County Government is responsible for adopting a budget for SCS.

107.

The total SCC operating budget for the current 2019-2020 fiscal year is

$437,959,000. This amount represents approximately 34.1%

of Shelby County Govemment’s

2019-2020 total budget.
108.

Of that total budget for the current fiscal year,

SCS receives $533,172,000

of state

funding under the BEP formula, which equals $4,642 per student based on the prior year’s
enrollment of 114,855.
109.

For the current fiscal year, the BEP requires Shelby County Government to

contribute a local match of $271,130,000, which averages to $2,361 per pupil.
110.

As outlined in the ESA Act and proposed rules, the annual amount MNPS or SCS

must pay into each participating student’s ESA is either the per-pupil state and local funding
required by the BEP in MNPS and SCS or the combined statewide per—pupil average

funding, whichever is less. Tenn. Code Ann.

§

of BEP

49—6-2605(a); see also Proposed Rule 0520-01-16-

.04(6).
111.

The TDOE has not released BEP figures for the 2020-2021 school year, when

TDOE plans to launch the ESA Program. Thus, MNPS and SCS do not yet know the per-pupil
ESA payments they will be required to make in the program’s first year.
1

year

12.

If MNPS and SCS’s ESA payments were based on BEP figures for the current fiscal

of 2019-2020,

each

of their per-pupil BEP funding requirements, taking into account funds

reserved by the state for ASD and State Board

of Education charter schools in their districts, would

be higher than the combined statewide BEP average, which equals $7,593. Therefore, they would

(N0328518.1)

22

 pay $7,593, the combined statewide average, into an account for each student in their district

participating in the ESA Program.
113.

The combined statewide BEP average

of $7,593

is calculated by taking the total

state and local dollars required and allocated statewide through the BEP

for the 2019-2020 school

year, which equal $7,354,055,000, and dividing that amount by the statewide ADM, which is

968,581. TDOE, “The Basic Education Program,” BEP Quick Facts: Fiscal Year 2019-20,

https://comptroller.tn.gov/office-functions/research-and-education-accountabilitv/legislative-

toolkit/bephtml.
114.

MNPS has approximately 81,000 students and SCS has approximately 106,000

students in the current school year, according to the TDOE State Report Card. MNPS has

approximately 43% of the combined student population of MNPS and SCS, and Shelby County
has 57%.
115.

The number

of participating

students enrolled in the ESA Program cannot exceed

of operation;

7,500 for the second school year; 10,000 for the third

5,000 for the first school year

school year; 12,500 for the fourth school year; and 15,000 for the fifth and subsequent years.
116.

If MNPS and SCS split the total number of participating students in proportion to

their current student populations, then the number of participating students from MNPS in 20202021, the first year of the ESA Program’s operation, would be 43% of 5,000 students, which equals
2,150 students. The number

of participating students in the first year from

SCS would be 57%, or

2,850.
117.

Based on the combined statewide BEP average

of $7,593 in 2019-2020, MNPS

would lose 2,150 x $7,593 = approximately $16.3 million in funding for that school year. SCS
would lose 2,850 x $7,593 = approximately $21.6 million in funding for the first year of

(N0328518.1}

23

 implementation. This number likely underestimates the financial impact on MNPS and SCS, since
the BEP per-pupil funding for 2020-2021
118.

will likely be higher than the current year.

Enrollment in the ESA Program increases by 2,500 students annually until the

program’s fifth year, when student participation reaches a maximum of 15,000. Assuming the
number

of MNPS’s participating

students is 43%

of total participation,

and assuming the amount

allotted to each Davidson County participating student equals the current statewide average,

MNPS would lose combined local and state funding under the Act each year as follows:

First year (2020-2021)

2,150 X $7,593 = $16.3 million

Second year (2021-2022)

3,225 X $7,593 = $24.5 million

Third year (2022—2023)

4,300 X $7,593 = $32.7 million

Fourth year (2023-2024)

5,375 X $7,593 = $40.8 million

Fifth & subsequent years (2024-)

6,450 x $7,593 = $49.0 million

MNPS’s total funding loss over five years would be at least $163 million over the ESA Program’s

first five years and would increase by at least $49 million annually in each succeeding year. The
actual funding loss would likely be significantly higher, as the BEP per-pupil funding (whether

MNPS’s or the combined statewide average) will undoubtedly increase over time. More than half

of this funding

loss

will consist of local funds

generated from local taxpayers who have had no

input into the state’s decision to implement the ESA Program.
119.

Assuming the number of SCS’s participating students is 57% of total participation,

and assuming the amount allotted to each Shelby County participating student equals the current

combined statewide BEP average, SCS would lose funding under the Act each year as follows:

(N0328518.1)

First year (2020-2021)

2,850 x $7,593 = $21.6 million

Second year (2021-2022)

4,275 X $7,593 = $32.5 million

24

 Third year (2022—2023)

5,700 X $7,593 = $43.3 million

Fourth year (2023-2024)

7,125 x $7,593 = $54.1 million

Fifth & subsequent years (2024-)

8,550 x $7,593 = $64.9 million

SCS’s total funding loss over five years would be at least $216 million over the ESA Program’s

first five years and would increase by at least $65 million annually in each succeeding year. The
actual funding loss would likely be significantly higher, as the BEP per—pupil funding (whether
SCS’s or the combined statewide average)
120.

will undoubtedly

increase over time.

The Tennessee General Assembly Fiscal Review Committee estimated that the

ESA Act would result in
and Shelby counties)

a

program-wide “shift in BEP funding amongst [LEAs]” (i. e., Davidson

of $36,881,150 in year

one

of implementation;

$55,321,725 in year two;

$73,762,300 in year three; $92,202,875 in year four; and $110,643,450 in year five and subsequent
years. Tennessee General Assembly Fiscal Review Committee, Corrected Fiscal Memorandum

HB 939 — SB 795 at 4 (May

1,

2019) (Summary

of Amendment (009043)

(conference committee

report)) (hereinafter “Fiscal Memorandum”). These figures, which assume a BEP amount of
$7,376.23 per pupil, underestimate the actual BEP funding loss because the combined statewide

BEP average has increased since the bill’s passage.
121.

The Fiscal Review Committee also recognized that the costs for Davidson and

Shelby counties to provide “equitable services” to students in private schools participating in Titles

I, II, and IV

of the Elementary

and Secondary Education Act

of 1965,

20 U.S.C. §§ 6301, et seq.

(“ESEA”), would likely increase under the ESA Act.
122.

As the Fiscal Review Committee noted:

If a student enrolling in the ESA Program is in a Title I LEA and attends a private
school that participates in federal grants, the LEA’s equitable services cost would
increase for that student because the equitable services funds that LEAs have to
pass along is based on the number of students in private schools. However, the

(N0328518.1)

25

 LEA’s federal funding will not increase,

so they

will have to pay out more funding,

but not receive any additional funding.
Fiscal Memorandum at 4.
123.

The Fiscal Memorandum further states that while “[t]he amount

of additional

funding that will be passed along to private schools cannot be reasonably determined,”

“if 5,000

students attended participating private schools, the potential maximum amount would be:

$4,000,000 from Title 1; $200,000 for Title II; and $185,000 for Title IV (spread across the districts

involved and their surrounding districts).” Id. The Fiscal Memorandum does not specify the time
period for these losses or the basis for the figures.
B. Insufficient Relief Through the ESA Act’s Potential Grant Program
124.

In an inadequate recognition of the loss in BEP funding that the Davidson County

and Shelby County school systems

will suffer under the ESA Act,

the Act includes a three-year

unfunded grant program to be paid from a “school improvement fund.” Tenn. Code Ann.

§

49-6-

2605(b)(2)(A).
125.

Disbursements from the school improvement fund,

if fully funded, would provide

an annual grant over the next three years to Davidson and Shelby counties

“to be used for school

improvement in an amount equal to the ESA amount for participating students under the program.”
Tenn. Code Ann.
126.

49-6-2605(b)(2)(A).

The grant program is “subject to appropriation” and is not a condition precedent to

implementation
127.

§

of the ESA Act. Id.

As a result, the grant program provides no assurance that it will offset the fiscal

damage that Davidson and Shelby counties’ LEAs
128.

February

(N0328518.1)

3

will suffer under the ESA Program.

Governor Lee submitted his proposed state budget to the General Assembly on

in connection with his State of the State address. The Govemor’s “Budget Overview”
26

 for “Education” includes a line item for “Non—Public Education Choice Programs” that shows
appropriations

of $2,271,500 for recurring expenses and $12,858,600 for non-recurring expenses.

The ESA grant program would be classified as a non-recurring expense. Based on this line item,

it appears that the Governor’s proposed budget includes only $12.9 million for ESA grants during
the ESA Program’s first year, which would be one third

of the $36.9 million that Davidson

and

Shelby counties are projected to lose in BEP funding during the ESA Program’s first year,

according to the Tennessee General Assembly Fiscal Review Committee.
129.

The grant program, even

if fully funded, only lasts three years. As a result, it will

not permanently offset the fiscal damage to the Davidson and Shelby counties’ LEAs. It
cover MNPS’s projected funding losses
the projected funding losses

of at

the projected funding losses
130.

Even

of at

fifth

and subsequent years.

least $54 million in year four

It will not

of the ESA Program or

of at least $65 million in the fifth and subsequent years.

if fully funded, funds from the ESA grant program are only “to be used for

school improvement.” Tenn. Code Ann.
131.

of at least $41 million in year four of the ESA Program or

least $49 million in the

cover SCS’s projected funding losses

will not

§

49-6-2605(b)(2)(A).

The ESA Act does not define what specific conditions

will be placed on this “school

improvement” grant funding. Other state-funded “school improvement” grant programs have

significant restrictions on their uses, with some restricted to use only on priority schools, and many
having very specific line-item limits on permitted uses.
132.

Regardless

of the restrictions, ESA grant

funds restricted to school-improvement

efforts cannot be treated as general operating funds and therefore do not make MNPS or SCS

whole for its loss of BEP funding. BEP dollars are part of a district’s general operating funds.

(N0328518tl)

27

 133.

In addition, the ESA grant program only provides funds to MNPS and SCS for

students who attended an MNPS or SCS school for one
the ESA Program. Tenn. Code Ann.
134.

§

full school year before the student joins

2605(b)(2)(A)(i).

Despite having to plan, budget, and prepare buildings, staff, and curriculum for new

incoming students, MNPS and SCS will receive no grant funds for students who would otherwise
be entering kindergarten but elect to use ESA funds instead.
135.

diverted, even

Unused ESA funds do not revert to the LEA from which the BEP funds were

if the student returns to that LEA and the LEA resumes responsibility for educating

the student. Tenn. Code Ann.
closed, regardless

of

§

49-6-2603(e). Any funds remaining in an ESA account that is

the reason for the account being closed, are deposited in the State

of

Tennessee’s BEP account. Tenn. Code Ann. §§ 49-6—2603(e), -2608(e).

C. ESA Act’s Impact on Current Expenses
136.

The MNPS budget is used to educate approximately 81,000 students. For the 2019-

2020 school year, MNPS has 167 schools in its system: four early learning centers, seventy-two
elementary schools, thirty—three middle schools, twenty-three high schools, thirty charter schools,
three alternative learning schools, and three special education schools. MNPS employs more than

6,500 certificated staff and 4,000 support staff.
137.

Davidson County’s diverse population creates unique educational demands.

MNPS’S students speak 139 different languages. Eighteen percent are English language learners.

Twelve percent of MNPS’s students live with a disability.
138.

SCS is Tennessee’s largest public—school district and serves more than 100,000

students. For the 2019-2020 school year, SCS has 208 schools in its system: seventy-eight

elementary schools, twenty-six middle schools, ten K-8 schools, twenty-seven high schools, two

(N0328518.1)

28

 alternative schools, four career technology centers, two special schools, one adult school, one early
learning school, one virtual school, and fifty-six charter schools. SCS employs more than 14,000
employees, 6,900
139.

of whom are classroom teachers.

Shelby County’s population is also highly diverse, which creates challenging

educational demands. Approximately 10,500 SCS students are English language learners, and

approximately 13,000 SCS students live with a disability.
140.

The current BEP formula already fails to account for the actual cost

of educating

students. The forrnula’s arbitrary inputs have resulted in systematic inadequate funding
and SCS schools, which is the subject

et al. v. Haslam, et

511.,

of a constitutional challenge in Shelby County Bd. 0fEduc.,

Case No. 15-1048—111, pending in Davidson County Chancery Court.

Tennessee consistently ranks among the lowest in the nation in state funding
141.

of MNPS

of public education.

When students residing in Davidson County or Shelby County elect to participate

in the ESA Program, the amount of money required to operate MNPS or SCS schools will not
decrease by the same amount as the lost BEP funding.
142.

Many of MN PS and SCS’s costs are largely unaffected by movement of students

between schools or even out

of the system, including facility maintenance, technology costs, food

services, transportation, facility operations, long-term contracts, and post—employment benefits
such as pension and insurance.
143.

For example, a student’s departure from MNPS or SCS to use ESA funds for

education expenses outside the public-school system

will not relieve MNPS or SCS of the cost of

heating and cooling that student’s previous school and staffing the student’s previous classrooms,
despite the LEA losing all BEP funding for that student.

(Noszssma)

29

 144.

Staff, educator, and administrator salaries and fringe benefits

will not

decrease in

proportion to the numbers of students leaving the system.
145.

To illustrate, each classroom has various state—imposed ratios, such as student-

teacher ratios, at which the school must operate. For MNPS and SCS to operate cost-effectively,
classrooms, buses, and schools must be as full as possible.
146.

Losing a relatively small number of students from each MNPS or SCS bus that

transports students would not eliminate the need for any
147.

of those buses.

Losing a relatively small number of students from each MNPS or SCS classroom

or school would not eliminate the need for any teachers, staff members, or buildings.
148.

Even where enrollments decrease, many buildings must continue to operate with

the same amount
loss

of technology, food service staff, and administrative staff, despite the significant

of BEP funding that accompanies
149.

a loss

of students.

Notwithstanding the number of students in a school, the school must be staffed with

a principal, librarian, bookkeeper, literacy coach, secretary, counselor, and a half—time advanced

academics instructor. With each decrease in enrollment in a school, the per-pupil cost to staff these

positions increases.
150.

Because so many costs that comprise the MNPS and SCS operational budgets

remain unchanged by a reduction in the numbers

of students in the

system, the anticipated loss

of

additional BEP funds that will result from implementation of the ESA Program will detrimentally
affect MNPS and SCS’s ability to operate.
D. ESA Act’s Imposition of Additional TCAP Testing Expenses
151.

Tennessee’s state testing program, known as the Tennessee Comprehensive

Assessment Program (“TCAP”), currently “includes TNReady assessments in math, English

(N0328518.1)

3O

 language arts, social studies, and science, as well as alternative assessments, like MSAA and

TCAP-Alt, for students with special needs.” https://www.tn.gov/education/assessment/testingoverview.html. Tennessee LEAs have various statutory responsibilities relating to the state’s
testing requirements, including administering the tests and providing notice to parents of what tests

will

be administered. See generally Tenn. Code Ann.

§

49-6-408; Tenn. Code Ann. §§ 49-1-602,

et seq.; Tenn. Code Ann. §§ 49-6-6001(b), -6007.
152.

The ESA Act requires “participating students in grades three through eleven (3-11)

[to] be annually administered the [TCAP] tests for math and English language arts, or successor
tests authorized by the state board

Ann.

§

of education for math

and English language arts.” Tenn. Code

49-6-2606(a)(1).
153.

For students attending participating schools under the ESA Program, the

participating school is responsible for administering the tests. Tenn. Code Ann.

§

49-6-2606(a)(2).

For participating students not enrolled in a participating school, the participating student’s parent
bears the responsibility for ensuring the student is administered the test annually. Tenn. Code Ann.
§

49-6-2606(a)(3).
154.

the cost

The Fiscal Memorandum for the ESA Act contemplates the student’s LEA bearing

of standardized testing for participating

students not attending a participating school.

Fiscal Memorandum at 4. The Fiscal Memorandum estimates the cost

of that testing

process on

the LEA to be $73.24 per student. Id.
155.

The Fiscal Memorandum also estimates that 70%

the ESA Program

will attend non-participating

of the

students participating in

schools. Id. Based on this estimate, and assuming

participating students are distributed between the two affected counties equal in proportion to the

LEAs’ overall student enrollment, then 1,505 students will return to MNPS for testing in year one;

(N0328518.1)

31

 2,258 students in year two; 3,010 students in year three; 3,763 students in year four; and 4,515
students in years five and later. This

will cost MNPS $l 10,226.20 in year one; $165,375.92 in year

two; $220,452.40 in year three; $275,602.12 in year four; and $330,678.60 in years five and later.
This equals a total testing cost of approximately $1.1 million for the first five years of
implementation.
156.

Based on these same projections, 1,995 students

will return to

SCS

for testing in

year one; 2,993 students in year two; 3,990 students in year three; 4,988 students in year four; and
5,985 students in years five and later. The testing cost to SCS, assuming participating students are

distributed between Davidson and Shelby counties equal in proportion to their overall student
enrollment,

will be $146,113.80 in year one; $219,207.32 in year two; $292,227.60 in year three;

$365,321.12 in year four; and $438,341.40 in years five and later, for a total

of approximately

$1.5

million for the first five years.
157.

These estimates are consistent with the cost estimate reflected in the Fiscal

Memorandum for all participating students: “The mandatory recurring increase [in] local
expenditures is estimated to exceed $192,475 (2,628 x $73.24) in 2021-22 and subsequent years

with an additional increase each year reflecting the increase in students.” Id.
158.

In addition, for standardized tests to be distributed from the TDOE to each LEA

administering the tests, TDOE must have updated records concerning all test-taking students’
current course load, grade level, and school.
159.

The proposed rules to effectuate the ESA Act do not explain who bears the

responsibility for managing data for a participating student residing in an LEA: the LEA or the
private school the participating student attends.

(N0328518.1)

32

 160.

MNPS pays for student data management on a per-pupil basis.

student data for participating students no longer attending MNPS schools,

If MNPS must retain

it will bear additional

financial and administrative costs not addressed in the ESA Act.
E. Uncertainty Concerning the ESA Act’s Implementation Processes
161.

The continued lack

of clarity from TDOE

on how the ESA Program

will

be

implemented creates a substantial administrative burden on MNPS and SCS.
162.

Students

will begin attending private school

classes using ESA funds in August

2020. Despite that short turnaround time, MNPS and SCS have received no information from

TDOE concerning what role,
163.

if any, MNPS and SCS will play in the ESA Program’s execution.

TDOE has not informed MNPS and SCS what the deadline will be for students to

apply for the ESA Program.
164.

TDOE has not informed MNPS and SCS what student data,

if any, it must maintain

for students residing in Davidson or Shelby counties but Withdrawing from MNPS and SCS to use
ESA funds.
165.

TDOE has not informed MNPS or SCS what role,

if any, MNPS or SCS will play

in standardized testing for former MNPS or SCS students who elect to participate in the ESA
Program.
166.

MNPS utilizes a student-based budgeting method.

167.

An individual school’s funding allotment is determined by the enrollment

projections for that school. Individual school budgets are then developed in the spring to provide

sufficient time to make final adjustments over the summer.
168.

Enrollment projections also help determine hiring needs for new teachers.

Competition for highly qualified teachers is strong. Teacher hirings ideally begin occurring in

(N0328518.1)

33

 March, before the pool

of highly qualified new teacher applicants dwindles after those candidates

graduate.
169.

MNPS’s Boundary Flaming office typically releases student enrollment

projections in February for the upcoming school year.
170.

The school-based budget allotments are prepared after those projections are

released.
171.

The later MNPS learns what actual enrollments

will

be at each school, the more

complex and/or expensive the ability to adjust becomes, and the more disruption any adjustment

will cause on individuals and departments.
172.

Last-minute adjustments to enrollment

will affect

teacher and other staff moves,

technology services availability, transportation routes, nutrition services, and other operational
services, requiring shifts at schools across the affected districts. These last-minute operational
changes

will adversely affect not only MNPS

and SCS teachers and staff but also the quality

of

services delivered to students who remain enrolled at the affected schools.
173.

If shifts

cannot be made because

of the resulting ratios of

students to staff or

students to equipment, then various MNPS and SCS schools must operate under-enrolled, which
has a direct, negative financial impact on the district.

174.

The increase in testing expenses, loss

of BEP funding,

increased operational and

administrative expenses, and increase in planning efforts to prepare for the program’s impact on
MNPS and SCS constitute irreparable harm. These tangible and intangible costs cannot be
recaptured, and the LEAs cannot be made whole

(N0328518.1)

if the Act is later found to be unconstitutional.

34

 CAUSES OF ACTION

COUNT

I

THE ESA ACT VIOLATES THE HOME RULE AMENDMENT IN ARTICLE XI, SECTION 9 OF THE
TENNESSEE CONSTITUTION, WHICH PROHIBITS LEGISLATION THAT IS LOCAL IN EFFECT AND
FORM WITHOUT THE CONSENT OF THE LOCAL LEGISLATURE OR LOCAL ELECTORATE.
175.

fully

set

Plaintiffs adopt and incorporate all allegations in the preceding paragraphs

as

if

forth herein.

176.

Adopted in 1953, Article XI, Section 9

of the Tennessee Constitution is commonly

referred to as the Home Rule Amendment.
177.

As the Tennessee Supreme Court declared in Farris

(Tenn. 1975), “[t]he whole purpose

of the Home Rule Amendment

v.

Blanton, 528 S.W.2d 549

was to vest control

of local

affairs in local governments, or in the people, to the maximum permissible extent.” Id. at 551.
178.

The Home Rule Amendment limits the ability

of the General Assembly to

pass

private acts affecting municipalities (paragraph 2), allows local control by authorizing the creation

of home rule municipalities

(paragraphs 3-8), and authorizes the creation

governments (paragraph 9). TENN. CONST. art. XI,
179.

Paragraph 2

§

of consolidated

9.

of the Home Rule Amendment renders void any legislation creating a

requirement local in form or effect that does not contain an explicit requirement for approval by
the local legislature or electorate. The constitutional provision states as follows:

of the

General Assembly private or local in form or effect applicable to a
particular county or municipality either in its governmental or its proprietary
capacity shall be void and of no effect unless the act by its terms either requires the
approval by a two-thirds vote of the local legislative body of the municipality or
county, or requires approval in an election by a majority of those voting in said
election in the municipality or county affected.
any act

TENN. CONST. art.

(NOSZSSISJ)

XI,

§

9.

35

 180.

Legislation is “local in effect or form” under Article XI, Section 9

is not “potentially” applicable statewide. Civil Serv. Merit Bd.

if the legislation

of City of Knoxville v.

Burson, 816

S.W.2d 725, 729 (Tenn. 1991).
181.

Even

if the “form” of a law suggests

general applicability (e. g., was enacted as a

public act), the law must satisfy the Home Rule Amendment

if the “effect” of the bill is “local”

application. Farris, 528 S.W.2d at 554.
182.

Legislation that only applies to two counties is “local in effect or form” under

Article XI, Section 9. Leech
183.

v.

Wayne County, 588 S.W.2d 270, 274 (Tenn. 1979).

The ESA Act, by its terms,

will only ever apply to

students zoned to attend public

schools in Davidson or Shelby counties. As a result, the ESA Act is local in effect and form under

Article XI, Section 9.
184.

The ESA Act, by its terms, is mandatory, not enabling, legislation. That is, the

legislation requires the LEAs in Davidson and Shelby counties to permit their students to
participate in the ESA Program. The legislation does not require approval by the Davidson and
Shelby County legislatures or electorates.
185.

A

state law that violates the “local approval” provision

of Article XI, Section

9 is

not reviewed under a rational-basis test.
186.

When a state law is imposed on a local government, the only question is whether

there is a local approval option in the law.
187.

Courts may consider legislative history

is local in effect. See Bd.

of Educ. of Shelby

if there is doubt about whether legislation

County, Tenn.

v.

Memphis City

Ba'.

of Educ,

911 F.

Supp. 2d 631, 653 (W.D. Tenn. 2012) (citing Farris, 528 S.W.2d at 555-56; Bozeman v. Barker,
571 S.W.2d 279, 281 (Tenn. 1978)).

(N0328518.1)

36

 188.

While there is no doubt about whether the ESA Act is local in effect, the Act’s

legislative history illustrates the General Assembly’s intent to apply the Act only to Davidson and
Shelby counties and to ensure the Act applied to no other counties.
189.

The ESA Act, which is local in effect and form, violates Paragraph 2

of the

Section 9 in the Home Rule Amendment

Tennessee Constitution because

of Article XI,
it imposes on

singled-out local governments and fails to, “by its terms,” provide for local approval by the local

legislative body or local electorate. Plaintiffs are entitled to a declaratory judgment that the ESA

Act is unconstitutional, unlawful, and unenforceable and an injunction against its enforcement.

gm
THE ESA ACT VIOLATES THE TENNESSEE CONSTITUTION’S EQUAL PROTECTION CLAUSES IN
ARTICLE 1, SECTION 8 AND ARTICLE XI. SECTION 8, WHICH PROHIBIT CLASSIFICATIONS
THAT ARE NOT RATIONALLY RELATED TO A LEGITIMATE STATE INTEREST.
190.

fully

Plaintiffs adopt and incorporate all allegations in the preceding paragraphs

as

if

set forth herein.
191.

Two provisions in the Tennessee Constitution guarantee equal protection of the

192.

Article

law.
1,

Section

8 states:

“That no man shall be taken or imprisoned, or disseized

of his freehold, liberties or privileges, or outlawed, or exiled, or in
deprived

any manner destroyed or

of his life, liberty or property, but by the judgment of his peers or the law Of the land.”

193.

Article XI, Section

8, states,

in relevant part, the following:

The Legislature shall have no power to suspend any general law for the benefit of
any particular individual, nor to pass any law for the benefit of individuals
inconsistent with the general laws of the land; nor to pass any law granting to any
individual or individuals, rights, privileges, immunitie[s], 0r exemptions other than
such as may be, by the same law extended to any member of the community, who
may be able to bring himself within the provisions of such law.

(N0328518.1}

37

 194.

As the Tennessee Supreme Court recognized in Tennessee Small School Systems

McWherter, 851 S.W.2d 139 (Tenn. 1993) (Small Schools

1),

v.

“disparities in resources available”

in various school districts can “result in significantly different educational opportunities for the
students

of the state.”

Id. at 145. And where there is no “legitimate state interest justifying the

granting to some citizens, educational opportunities that are denied to other citizens similarly

situated,” the classification “fails to satisfy even the ‘rational basis” test applied in equal protection
cases.” 1d. at 156.
195.

A classification with “no reasonable or natural relation to the legislative objective”

does not satisfy the rational—basis test under the equal protection clauses. Harrison v. Schrader,

569 S.W.2d 822, 826 (Tenn. 1978). “The core concern expressed in this constitutional provision
is that legislative classification, to the extent that

it exists, not be unreasonable or unfair.” Burson,

816 S.W.2d at 731.
196.
as

The Tennessee Supreme Court has described Tennessee’s equal protection standard

follows:

“[A] classification must not be mere arbitrary selection. It must have some basis
which bears a natural and reasonable relation to the object sought to be
accomplished, and there must be some good and valid reason why the particular
individual or class upon whom the benefit is conferred, or who are subject to the
burden imposed, not given to or imposed upon others should be so preferred or
discriminated against. There must be reasonable and substantial differences in
the situation and circumstances of the persons placed in different classes which
disclose the propriety and necessity of the classification.”
State v. Tester, 879 S.W.2d 823, 829 (Tenn. 1994) (quoting State
135

v.

Nashville, C. & St. L. Ry. Co.,

SW. 773, 775 (Tenn. 1911) (emphasis added)).
197.

ESA Program eligibility is not limited to qualifying students in low-performing

schools across the state.

It is limited to

students in two counties, even

if the students are zoned to

high-performing schools in affluent neighborhoods. Students zoned to low-performing schools in

{N0328518,1)

38

 Hamilton County, for example, are not eligible for ESA funds, while students zoned to

high—

performing schools in affluent areas of Davidson County are eligible. Students zoned to lowperforming or “priority” schools in Fayette County are not eligible for ESA funds, while students
residing just across the Shelby County line zoned to attend high-performing schools are eligible.
198.

There is no rational relationship between the ESA Act’s exclusion

students in low-performing schools in Tennessee outside

of qualifying

of Davidson and Shelby counties and any

purported desire to provide better educational opportunity for students zoned to low-performing
schools.
199.

There is no rational basis for the ESA Act’s inclusion

of all qualifying

students in

Davidson and Shelby counties, whether they attend a low-performing school or not, while

excluding qualifying students in other Tennessee counties zoned to low-performing schools.
200.

There is no rational relationship between the ESA Act’s inclusion

of all qualifying

students in Davidson and Shelby counties, even those zoned to high-performing schools, and any

purported desire to provide better educational opportunity for students zoned to low-performing
schools.

201.

There is no rational basis for diluting public-school funding through the ESA

Program for students in Davidson and Shelby counties without doing the same in other Tennessee
counties.
202.

In defining eligibility for the ESA Act to include only two counties, the General

Assembly intended to “protect” the non-participating counties from the negative and inevitable
consequences

(N0328518.1}

of losing BEP

funds.

39

 203.

There is no rational basis for excluding students in Fayette, Hamilton, and Madison

counties—districts with the same or greater concentration of poorly-performing schools—from
the ESA Act, while including Davidson and Shelby counties.

204.

Davidson and Shelby counties have a greater number of schools in their LEAs than

all other Tennessee counties. But Fayette, Hamilton, and Madison counties had an equivalent or
greater percentage

of low-performing

schools than Shelby and Davidson counties in 2018, the

year immediately preceding the ESA Act’s passage. The “eligible student” definition, however,
was purposefully drafted to omit Fayette, Hamilton, and Madison counties.

205.

There is no rational basis for the General Assembly imposing the ESA Act on

Davidson and Shelby counties while seeking to protect equally poorly performing LEAs, such as
Fayette, Hamilton, and Madison counties, from the ESA Program’s inevitable and negative
consequences.

206.

The partisanship underlying the General Assembly’s decision to exclude all

counties except Davidson and Shelby, which have Democratic majorities among their voters and
members
a

of their state legislative

delegations, from the ESA Act’s application does not constitute

rational basis for such classification.
207.

The ESA Act’s application to only two counties constitutes an inequitable

distribution of funds in violation of the equal protection clauses,
208.

as

outlined in Small Schools I.

There is no rational relationship between the ESA Act’s application to only

Davidson and Shelby counties and any legitimate state interest.
209.

The ESA Act constitutes an unreasonable and arbitrary classification, with no

rational basis, in violation
1,

of the equal protection clauses of the Tennessee Constitution, at Article

Section 8, and Article XI, Section 8. Plaintiffs are entitled to a declaratory judgment that the

(N0328518.1)

4O

 ESA Act is unconstitutional, unlawful, and unenforceable and an injunction against its

w

enforcement.

THE ESA ACT VIOLATES ARTICLE XI, SECTION 12 OF THE TENNESSEE CONSTITUTION,
WHICH GIVES THE TENNESSEE GENERAL ASSEMBLY RESPONSIBILITY FOR ESTABLISHING AND
SUPPORTING A SYSTEM OF PUBLIC EDUCATION THAT PROVIDES SUBSTANTIALLY EQUAL
EDUCATIONAL OPPORTUNITIES TO ALL STUDENTS.

210.

fully

Plaintiffs adopt and incorporate all allegations in the preceding paragraphs

as

if

set forth herein.

211.

The Tennessee Constitution places responsibility for public education with the

General Assembly:
The State of Tennessee recognizes the inherent value of education and encourages
its support. The General Assembly Shall provide for the maintenance, support and
eligibility standards of a system of free public schools. The General Assembly may
establish and support such postsecondary educational institutions, including public
institutions of higher learning, as it determines.
TENN. CONST., art.

212.

XI,

§

12.

In Small Schools 1, the Tennessee Supreme Court determined that it had the duty to

ensure that this Special responsibility was met:

“[I]t is our duty to consider the question of whether

the legislature, in establishing the educational funding system, has ‘disregarded, transgressed and

defeated, either directly or indirectly,’ the provisions
at 148 (quoting Biggs

213.
as the

v.

of the

Tennessee Constitution.” 851 S.W.2d

Beeler, 173 S.W.2d 946, 948 (Tenn. 1943)).

Small Schools

I also held that this constitutional provision, commonly referred to

Education Clause, embodies an enforceable standard “that the General Assembly shall

maintain and support a system of free public schools that provides, at least, the Opportunity to
acquire general knowledge, develop the powers

(N0328518.1)

of reasoning

41

and judgment, and generally prepare

 students intellectually for a mature life.

.

.

.

[T]his is an enforceable standard for assessing the

educational opportunities provided in the several districts throughout the state.” Id. at 150-51.

Under the Education Clause, the General Assembly has an “obligation to maintain

214.

and support a system

of public

schools that affords substantially equal educational opportunities

to all students” in the state. Small Schools I, 851 S.W.2d at 140-41.

By limiting the ESA Program to Davidson County and Shelby County, which the

215.

General Assembly recognizes

will

have a negative impact on Davidson County and Shelby

County’s LEAs, Defendants fail to provide a substantially equal educational opportunity to all
students in Tennessee.

Rather, the ESA Act unlawfully targets Davidson County and Shelby County by

216.

diverting public funds from their LEAs while protecting all other counties and LEAs from the
burdens

of the program.
The ESA Act’s application to only two counties in Tennessee constitutes an

217.

inequitable distribution of funds in violation of the Tennessee Constitution’s Education Clause.
The ESA Act violates the Tennessee Constitution’s Education Clause, at Article

218.

XI, Section

12, by

failing to afford “substantially equal educational opportunities to all students”

in the state. Small Schools 1, 851 S.W.2d at 140-41. Plaintiffs are entitled to a declaratory judgment
that the ESA Act is unconstitutional, unlawful, and unenforceable and an injunction against its
enforcement.

PRAYER FOR RELIEF
WHEREFORE, Plaintiffs demand judgment against Defendants and pray that the Court
award the following relief:

(N0328518.1)

42

 1.

A judgment

and order declaring the ESA Act unconstitutional, unlawful, and

unenforceable;
2.

A temporary

and

injunction preventing

permanent

state

officials

from

implementing and enforcing the ESA Act;
3.

Plaintiffs’ costs and expenses incurred in bringing this action; and

4.

Such further and general relief as the Court deems appropriate.

Respectfully submitted,

DEPARTMENT OF LAW OF THE
METROPOLITAN GOVERNMENT OF
NASHVILLE AND DAVIDSON COUNTY

/&”/

J/

RoBERT E. cooPERlJ
DIRECTOR OF LAW

#010934)

Ml

LORA BARKElNBUS FOX (#017243)
ALLISON L. BUSSELL (#023538)
Metropolitan Courthouse, Suite 108
PO. Box 196300
Nashville, Tennessee 37219
(615) 862-6341
lora.fox@nashville.gov
allison.bussell@nashville.gov
Counsel for Metropolitan Government of Nashville
and Davidson County and Metropolitan Nashville
Board of Public Education

(N0328300.1)

43

 SHELBY COUNTY ATTORNEY’S OFFICE

f
t/M 0m Mm mom WW 1%
IVERSON
(

MARLINEE C.
(#018591)
SHELBY COUNTY ATTORNEY
E. LEE WHITWELL (#033622)
160 North Main Street, Suite 950

Memphis, TN 38103
(901) 222-2100
marlinee.iverson@ shelbycountytn.gov
lee.Whitwell@shelbycountytn.gov
Counsel for Shelby County Government

(N0328518.1)

44