(CNN) -- Public schools in Memphis, Tennessee, will be consolidated with those of the surrounding county beginning in 2013-14, a federal judge ruled Monday. The decision ends for now a yearslong fight over funding that spilled into questions of race and politics.
The 146-page ruling from Judge Hardy Mays was prompted by a lawsuit and subsequent voter referendum in March that dissolved the Memphis City Schools charter.
"The Memphis City Schools has been abolished for all purposes except the winding down of its operations and the transfer of administration to the Shelby County Board of Education under the terms of Public Chapter 1 and Tennessee education law," wrote Mays. He said the surrender of the city charter did not affect the validity of the city board's actions up until now.
State law mandates school districts be under county jurisdiction, but an exception was carved out in 1869 for Memphis, in the western part of the state. The city itself remains under Shelby County control, but taxes have traditionally been divided and distributed based on the number of students who attended the city schools.
The city was then free to provide additional funding to its schools because of its special status, mainly through property taxes.
For years there have been questions about whether this division of funding led to "unequal access" to education for the city's poor and mostly minority students.
About 85% of students in the city are African-American, and about 87% are considered "low-income," according to court records. By contrast, many schools in the mostly suburban county have a majority of white, middle-class students.
The county had resisted the merger and had filed a federal lawsuit, worried about the added responsibility of funding the city schools in a weak economy. Under the judge's ruling, Shelby County officials will now be responsible for funding both systems.
Mays, a 2002 Bush appointee, gave both sides until Friday to offer their ideas to make the merger a reality.
The state legislature -- just days before the county referendum -- had passed a law known as the Norris/Todd bill that allowed for the transfer and eliminated special school districts. Mays said that law was constitutional.
Some lawmakers had called the merger a "hostile takeover" that would create a crippling financial burden on the county.
Its seven-member all-white school board was accused of being reluctant to cede power under the merger plan, expected to include new elections and redrawn school districts. That would mean city leaders, many of whom are black, would be part of the newly created school board.
For now, the ruling still puts Shelby County officials in charge of the transition, but they must regularly submit progress reports to the state education department.
In a separate fight, city schools were in danger of not opening for the school year, in a dispute over a $151 million funding shortfall. The city school board said it is owed the money from the city.
The board said it needed an immediate infusion of $55 million to allow public schools to open Monday as scheduled. A temporary resolution was reached late last month.
The court ruling is Board of Education of Shelby County v. Memphis City Board of Education (11-2101).