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VOL. 128 | NO. 154 | Thursday, August 08, 2013

Sales Tax Hike Goes to City Voters

By Bill Dries

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For months, political forces have been gathering to make the case for a half percent hike in the city sales tax rate that would fund a city administered pre-kindergarten program.

But when the Memphis City Council approved on third and final reading Tuesday, Aug. 6, of the ordinance to put it on the ballot for city voters in October, the debate revealed a significant difference of opinion.

And that difference of opinion operates on several levels, each of which are significant factors in what is the most vulnerable political question to put on a ballot – a tax hike proposal.

The campaign for the sales tax hike ballot question will have financial support, according to council cosponsor Shea Flinn. He was asked about the support Tuesday in council committee sessions and declined to say who contributed saying they wish to remain anonymous.

And the building of political backing for the ballot question was one of the differences of opinion.

Council member Wanda Halbert questioned why she wasn’t included in meetings and said those backing the measure called other council members but not her.

“Whatever this is about, somebody’s already been in a room discussing it,” she said in committee sessions. “This would open the door for my constituents to vote for something we don’t know anything about.”

STRICKLAND

“You do have to meet with some experts,” said council member Jim Strickland, the other cosponsor. “We introduced this in January. I didn’t get your questions until today. If you don’t support this referendum, Memphis will never get pre-K.”

Flinn said the goal is access to pre-kindergarten in Memphis for an estimated 5,100 4-year-olds who don’t currently have access.

“Find me someone who can afford to send their kid to private pre-K who doesn’t,” he said before adding “I’ll see y’all on the campaign trail.”

The same kind of campaign was built around the countywide tax hike on the ballot in Memphis and the unincorporated county in November 2012. But voters rejected the tax hike and critics of the measure said its promises were not specific enough and were not a real commitment to use the money for pre-kindergarten. The critics include Flinn and Strickland.

“That was not a failure for pre-K,” Strickland countered, pointing out that the sales tax hike revenue would have gone to the countywide school system, which couldn’t commit to a specific use.

“This is an absolute commitment to pre-K,” Strickland said of the current proposal in which the revenue goes into a pre-K trust fund administered by a board appointed by the Memphis mayor and confirmed by the council.

The still-tentative special election referendum date in October is to prevent the Shelby County Commission from pre-empting the sales tax referendum by calling its own referendum on a countywide sales tax hike in November. The commission cannot exercise the option in state law within a year of a previous sales tax referendum. And voters defeated the county’s sales tax hike ballot question in November.

The council also approved a companion resolution Tuesday that establishes the pre-K board to administer a trust fund estimated at $30 million annually to provide pre-kindergarten services in the city of Memphis only, under contract with an agency. The board would choose a provider through a request for proposals.

The $30 million estimate is up from the original $23 million estimate when Flinn and Strickland first floated the idea. The increase is from future losses in state and federal funding to pre-kindergarten programs.

They still estimate the half percent sales tax hike in the city would generate $47 million in revenue annually.

COLLINS

Any revenue from the sales tax hike over what is necessary to provide pre-kindergarten services in the city would go, by terms of the resolution, to reducing the city property tax rate.

Council member Harold Collins, however, thought any excess revenue should be able to be used for social services programs to deal with the larger problems of poverty.

Collins said the problem is larger than a pre-kindergarten expansion funded from a sales tax hike that the poor pay.

“It makes no sense for us to invest in 4-year-olds,” Collins said. “I would hate for us to act like we are doing something good.”

“I couldn’t disagree more,” Strickland replied. “We are doing something good.”

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 69 311 15,028
MORTGAGES 83 338 19,668
FORECLOSURE NOTICES 15 58 3,853
BUILDING PERMITS 0 512 35,842
BANKRUPTCIES 65 247 14,281
BUSINESS LICENSES 16 120 5,111
UTILITY CONNECTIONS 70 316 21,749
MARRIAGE LICENSES 18 93 4,650

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