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VOL. 127 | NO. 100 | Tuesday, May 22, 2012

In the Balance

Council to hear public comments before voting on new budget

By Bill Dries

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Memphis City Council members hope to wrap up budget committee hearings Tuesday, May 22, including a public comment period Tuesday evening at City Hall.

Memphis City Council budget committee chairman Jim Strickland talks with council member Harold Collins during budget hearings at City Hall this month. 

(Photo: Lance Murphey)

But with a third and final reading on budget and tax rate ordinances scheduled for the group’s first meeting in June, the council lacks a master plan for reworking the Wharton administration’s $628.3 million budget proposal.

If the council follows past practice of recent budget seasons, the alternative to that proposed tax hike will be the product of taking pieces from several council members’ different plans and adding up or subtracting numbers until the council gets to a balanced budget.

And that appears most likely to happen at a meeting of the full council, not the budget committee.

The newcomer to the process is Lee Harris, elected to the council just last year as the 12 incumbents already on the council were re-elected.

“My initial impression is this process does not work,” Harris said of the budget process shortly after the budget committee began work earlier this month. “It doesn’t work for anybody. It doesn’t for the council. It doesn’t work for taxpayers and I don’t know if it even works for the administration.”

Since then, the council has passed a resolution by Harris that prohibits the administration from describing any expenditures of more than $1 million as “miscellaneous” without a specific listing of items or services that make up the amount.

But he has some basic problems with a committee vote that isn’t binding on the full council. Because it isn’t binding, Harris’s chagrin grew as the committee approved division budgets with no cuts – leaving that to the full council.

“I understand that what we do doesn’t matter, that it’s still going to be subject to a final vote later on by the full council,” he said. “But I think the committee process should have some meaning.”

The budget committee sessions have tended to be places for council members to ask questions and get answers around which they will base later motions or votes when the full council meets. It’s also a place to observe the tension between the city finance director and the council no matter who is on the council and who is finance director. It is usually a struggle over information.

As the council explores options, finance directors tend to prepare for those options and stick to their talking points.

Finance director Roland McElrath came with his PowerPoint slides to a session this month as well as print outs of the slides distributed to council members earlier.

Budget committee chairman Jim Strickland’s goal was to get McElrath’s answers to some council questions posed earlier. McElrath wanted to start with the PowerPoint slides.

“This is just a recitation of facts you’ve already given up several times,” Strickland said as he gave McElrath five minutes to do it again.

What got the attention of Strickland and other council members was what McElrath said was a need for “a recurring stream of revenue for city schools and other large issues on the horizon. … to fund general operations and schools going forward.”

They immediately brought up Memphis Mayor A C Wharton Jr.’s statement in his budget address in April that the proposed 47-cent property tax hike was not for city of Memphis operations. Instead, it is only to fund the city’s obligation to Memphis City Schools in the last year of MCS’s operation before it merges with Shelby County Schools in August 2013. That is when the city’s obligation to fund the schools ends.

Strickland has been skeptical from the start about the temporary nature of the tax hike proposal, which he opposes.

The skepticism is also being voiced outside of City Hall, including by Shelby County Trustee David Lenoir.

“Higher taxes is not the answer,” Lenoir told the Memphis Rotary Club last week. “Higher taxes doesn’t always equate to increased revenue. … I think sometimes elected officials forget the fact that as they increase taxes that money is mobile. And they wonder why folks are leaving the city and going to the county or leaving the county and going to the surrounding counties. The reality is increasing tax rates is the not the answer.”

Lenoir is about to venture into the sensitive political area of PILOTs – payment-in-lieu-of-taxes programs – tax freezes granted by quasi-government bodies as an incentive for economic development. Lenoir is compiling his annual report for county government on PILOTs and wants to fold city information into the report.

“I know there’s some revenue out there on the city side that the city is missing out on,” he said. “The last time I looked, the city had about $3 million or $4 million of delinquent PILOTs.”

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 67 67 10,289
MORTGAGES 107 107 13,434
FORECLOSURE NOTICES 24 24 2,668
BUILDING PERMITS 393 393 24,700
BANKRUPTCIES 60 60 9,952
BUSINESS LICENSES 16 16 3,752
UTILITY CONNECTIONS 149 149 14,706
MARRIAGE LICENSES 31 31 3,198

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