VOL. 128 | NO. 81 | Thursday, April 25, 2013
Questions Kick Off City Budget Hearings
By Bill Dries
Memphis City Council members opened budget committee hearings Tuesday, April 23, on the clock and with lots of questions about what seemed to some like different budget numbers from last year at this time by the administration of Memphis Mayor A C Wharton Jr.
So far, there are more questions than conclusions by council members. But the next five to six weeks of budget hearings could get rough.
The budget committee’s first vote Tuesday was not to recommend the $4.7 million budget proposal of the city’s finance division, the first of the city’s divisions up for review.
Nine of the 13 council members were present.
Memphis Finance Director Brian Collins began the session with an overview of the entire $622.5 million budget proposal.
Council member Shea Flinn’s first questions were about the difference in previous estimates of recurring revenue, which went from $628 million to $622 million. Collins, and last week Wharton, described the administration’s proposal as a “continuation” budget.
“Did you ever find the $6 million difference?” Flinn asked Collins.
“This is a complicated year-over-year calculation,” Collins replied. “It was made complicated by the ways we chose to fund this year’s budget.”
The administration wants to use 10 cents on the existing city property tax rate that was used to partially fund Memphis City Schools toward the city’s debt service. The city’s debt service payment also goes up $10 million in the new fiscal year, according to Wharton because of the city’s 2010 restructuring of its debt to allow the city to fund the schools for several more years with one-time money.
“The numbers appear to be different in some cases from the numbers we were given last year,” budget committee Chairman Jim Strickland said of the dollar figures for where the city is in the current fiscal year that ends June 30. “They are giving us explanations for those differences. But we may need that explained to us again because they are very confusing. The administration said some of these numbers are fluid.”
Strickland kept Collins to a 20-minute overview and called time on him as he did on council members who each got two minutes for opening questions and comments.
Council member Joe Brown didn’t care for the time limits or voting to recommend against the budget of Collins’ own department.
“This seems to be an unfair process,” Brown said. “We’re about to screw government up.”
The questions and answers are crucial because the administration is recommending, at least for now, a 28-cent property tax rate hike that Collins insisted is not a tax increase for individual property owners. It will, he said, only generate enough revenue to compensate for the increased debt service as well as revenue lost in the 2013 property reappraisal.
Even if that is the case, Flinn was wary of any claims that the tax rate hike won’t mean paying more for some property owners, particularly those who own commercial property. Flinn says they will almost certainly pay more in taxes if the 28 cents is approved.
“I really would caution this council to be very careful. It’s one thing to have the math problem,” Flinn said. “It’s another thing to say there is no aggregate tax increase. That’s incorrect. No one pays their taxes in aggregate. … If that were so and Bill Gates walked in this room, we’d all be billionaires.”
Wharton said last week, the idea of a certified city property tax rate of $3.39 from the current $3.11 is a starting point for budget talks with the council. He added that the budget approved by the council some time in June will almost certainly be different than what he proposed.
Wharton’s budget includes a 2.3 percent pay raise for all city employees that would take effect in January, at the halfway point of the fiscal year. The pay raise is a $3 million line item in the administration’s budget proposal.