VOL. 128 | NO. 142 | Tuesday, July 23, 2013
Suburbs See Different Sales Tax Realities
By Bill Dries
While Shelby County and city of Memphis government leaders have grappled with the loss of property value and its impact on the property tax rates for both governments, suburban leaders have a different reality.
The county’s six suburban towns and cities are more reliant than Memphis on sales tax revenues as they also deal with the same property value loss in the 2013 property reappraisal.
All had property tax hikes this budget season to at least generate the same amount of revenue as their old rates factoring in the property value loss.
“We are dependent on the revenue that we get from the sales tax and our sales tax has been good,” said Collierville Mayor Stan Joyner on the WKNO-TV program “Behind The Headlines.” “Our sales tax is strong. We hope that it will continue to be strong and that it will increase.”
Two fiscal years ago, Collierville saw 10 percent growth in its sales tax revenue. This past year was “pretty flat” by Joyner’s description.
Germantown Mayor Sharon Goldsworthy, on the same program, said the sales tax numbers are definitely down for Germantown. She puts it at about a drop of 4 percentage points in the amount of general fund revenue Germantown gets from the local options sales tax over past years. That’s a shift from about 20 percent to approximately 16 percent.
“That’s one more reason why the property tax rate was adjusted upward. It has to be covered somehow,” she said. “We have really mounted what we thought were very vigorous ‘shop Germantown’ campaigns and such. But we have just been more than a little frustrated by a flatness or even a decline.”
“Behind The Headlines,” hosted by Eric Barnes, publisher of The Daily News, can be seen on The Daily News Video, www.memphisdailynews.com.
Germantown has no annexation reserve territory left to take in. It has reached its geographical limits under the growth plan required by the state.
“So the type of explosive growth that we experienced in the ’70s, ’80 and ’90s, that went away a long time ago,” Goldsworthy said. “With the recession, housing development kind of went away. But we never expected to grow much beyond 45,000 to 50,000 at total build out.”
Housing growth is beginning to return to Germantown. And this week Germantown city leaders are expected to sign off on a new Baptist Memorial Healthcare facility on the Wolf River Parkway medical corridor.
But the fact that Germantown is at its borders under its annexation plan is a factor in sales tax growth or the lack of it.
“We share the state sales tax on a per capita basis. And those communities that continue to grow benefit from that growth. We don’t,” Goldsworthy said. “Couple that with the state sales tax also being down during the recession period and that’s another reduction that we are powerless to do anything about.”
Collierville, by contrast, has about 20 square miles left to annex in its reserve area and much of it is on the north side of the Wolf River, which means some challenges in terms of infrastructure.
“We have done everything that we can from a planning standpoint to see that Collierville develops out in the vision that we want it to develop out,” Joyner said. “And we’ve held very closely to that. But in years past where you could make it across town in 10 minutes – well today, it may take you 25 minutes. Any time you have that growth, though, I think that’s going to be the challenge for you.”
Another challenge is manufacturing and logistics around the Norfolk Southern intermodal yard in Rossville in Fayette County.
“With the opening of the multimodal rail yard just on our eastern border, we’ll see pressure for development from industrial and commercial and warehouses,” Joyner said.
Meanwhile, both mayors said they would prefer, at least for now, to see the development of municipal school districts in their towns and cities that have their own superintendents.
Goldsworthy and Joyner were reacting to word last week from Arlington Mayor Mike Wissman that he and Lakeland leaders are pursuing having the same superintendent for their respective school districts.
“I think we still lack absolute clarity on whether that is permissible under the law. … I think there needs to be some clarity there,” Goldsworthy said. “Right now, our particular scenario that we’ve been following for creation of the district imagines we will have our own. But we have also talked about the value of cooperative contracts. I think that is still kind of sitting out there.”
Joyner said attorneys have advised him a common superintendent would be permissible under state law.
“I think that probably our (Collierville) school board (to be elected in November) is going to want to have their own superintendent,” he said. “That will be their hire.”