Budget shortfalls in various states are starting to filter down to the local level; in the city of Memphis, Tenn., budgetary woes are starting to effect public education.

Last week, Memphis Mayor A.C. Wharton said he wouldn’t be able to pay $55 million in budgeted money immediately to the city’s school board, who voted to delay the school year until it gets the money. Memphis children were set to return back to school on Aug. 8.

During a news conference, Wharton said he “simply wants to dispel the image that is being projected that we’ve got the money tucked away down here somewhere and simply will not pass it on to the school system. That simply is not the case.” Wharton said that the $55 million, which comes from projected tax revenue, has not yet been received by the city. He went on CNN last Thursday to plead his case to the nation.

“Memphis is not so bad-let’s make that clear,” said Wharton. “We set aside a certain portion of our tax rate to go to schools. Folks didn’t pay the property taxes on the day they were due. Once we get the money, we’ll open up the schools.”

“We’re in a political season here, and people will make a lot of statements,” Wharton continued. “I’m rising above that.”

The city did pay $3 million to the school board last week, but that was money left over from the past several school years. According to Memphis city budget officials, a good chunk of the funding for the schools will start coming in on Sept. 1.

But members of the school board have gone to the national media as well, declaring that the city government’s efforts aren’t good enough. Memphis City Schools Board member Stephanie Gatewood spoke with CBS News on the situation. “We might not be able to make payroll,” she said. “Who’s going to agree to work for free except for elected board members?”

While the debate raged on into the beginning of this week. A Memphis city schools employee, who wished to remain anonymous, spoke with the AmNews about what’s happening on the ground and what it means for Memphis kids.

“It’s a disaster. It’s just one more symptom of a dysfunctional district,” they said. According to our source, employees received an email from the superintendent detailing exactly who wouldn’t be paid if there was a delay in the start of the school year, the majority of whom being those who work directly with kids. “Teachers, bus drivers, custodians, classroom aides,” they told the AmNews. “A lot of people who live paycheck to paycheck. You know who would be getting paid? The superintendent and all of his assistants and the board would get paid.”

According to our source, any delay in the school year whatsoever would hurt many kids who are already behind in several subjects, essentially widening the already wide achievement gap.

“We have kids in the classroom who are already years behind in reading and math skills,” said the source, speaking about their school in particular. “We already start the race behind-we start school in August so that we have as much time as possibly to prepare them for the state assessment tests. Tennessee is not going to delay the test for one school. It translates to low scores, which translates to less funding since it’s tied to test scores.” While our source remained frustrated with the board, they didn’t let the city of the hook.

“One decision has a load of negative consequences,” they continued. “That said, the city does owe us money.”

But all is not lost. On Tuesday, the school board was scheduled to meet to consider a funding deal with the city that could have schools open on Aug. 8, if approved.

Overall, the city of Memphis planned on using $88 million to fund this school year.