A Memphis judge is allowing the city council to pay the first installment of a $3 million pledge to struggling Lemoyne-Owen College, after hearing arguments from a citizen against the gift.
An attorney for Dr. Howard Entman argued Thursday that the pledge should be considered illegal because it gives public funds to a private institution.
Judge John McCarroll ruled against stopping the city immediately from giving the money, WMC-TV reported. But the judge also affirmed the doctor’s right to sue over the issue and said an important issue was whether paying the $3 million over three years would put the city in debt.
“The question is whether or not the funds are being paid from some accumulated reserve, as opposed to creating a debt,” McCarroll said.
City Attorney Allan Wade told the judge that the money would come from a budget surplus. The city was required to submit an accountability plan to the judge by Friday morning, and Wade said the first check for $1 million could be cut the same day.
“My opinion based on what I know now is that it’s a proper gift to LeMoyne-Owen,” McCarroll said.
The council voted 9-2 last week to give $1 million in each of the next three years to the small private school that educated many black students in Memphis during racial segregation.
The school needs up to $4 million by the end of the month to pay debts and avoid losing its accreditation by the Southern Association of Colleges and Schools.
The council argued that the pledge is constitutional because it helps an institution that creates jobs and is beneficial to the community.
Entman said he and his attorney were deciding how to continue with the case.
“Nobody likes to lose, but this was only for the injunctive order,” he said. “This is not the entire case.”
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