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VOL. 124 | NO. 117 | Wednesday, June 17, 2009

UPDATE: Council Goes Long to Approve $600 Million Budget

Three Percent Pay Raises Survive

By Andy Meek

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The Memphis City Council late Tuesday approved a city operating budget of just over $600 milliion after cutting nearly $17 million from the budget proposed in April by Mayor Willie Herenton.

The council also set a property tax rate of $3.19 for the new fiscal year that begins July 1. Some confusion about the new tax rate remained Wednesday morning among council members. At least one council member contacted by The Daily News immediately after the council session said it was a $3.25 tax rate. Council Chairman Myron Lowery told The Daily News Wednesday afternoon, the rate is $3.19.

The state adjusted certified rate including an allowance for appeals of property reappraisals is $3.19. The certified adjusted rate represents the tax rate that will produce the same amount of revenue the city now gets from the $3.25 rate after the recent property reappraisal process.

“This is democracy in action. In the end it works,” said Council chairman Myron Lowery at the end of the eight hour council session which followed seven hours of committee meetings at City Hall.

Lowery’s verdict, however, contrasted sharply with other council members on both sides of a roiling debate about where to make budget cuts.

Most of the $16 million in cuts were made by following recommendations made by the council’s budget committee chaired by Wanda Halbert. But the votes by the full council were close and came with lots of debate instead of a single vote on a package of budget committee recommendations.

Halbert said she was “deeply saddened we have spent so much of the past few weeks coming to City Hall every single day discussing this budget line by line.”

“Some of you weren’t even here,” she continued. “I’m tired. I’m behind on a lot of things.”

The council left intact three percent pay raises for city employees that follow the five percent raise city employees got during the current fiscal year after two prior years with no pay raises.

Some on the council fought hard to either eliminate any pay raises or cut the size of the pay raises citing the current national economic recession.

“Maybe some of us live in a world where we believe at the end of the day it will all work out just fine,” said Council member Harold Collins. “But it is unfortunate we have others who believe, ‘I’ve got to get mine and get it now.’”

Council member Jim Strickland argued that savings the council has achieved through moving some city funding obligations to Shelby County government have simply been used for more city spending.

“We’ve cut schools and spent it,” he said. “We cut the health department and spent it. The public is aware of this. And they’re not receiving relief from double taxation.”

Still to be debated and determined by the council is a proposed special tax bill that could be issued as early as August that would reflect the amount the council has been ordered to pay the city school system by Chancellor Kenny Armstrong. Armstrong ruled against the city in a city school system lawsuit challenging the council’s decision to cut funding to the school system in the current fiscal year. He ordered the city to pay $57 million to the city school system. The ruling is being appealed by the city and any payment is on hold pending the outcome of an appeal that is expected to go from the state appeals court to the Tennessee Supreme Court.

A special tax bill would not be for the full $57 million under the general framework of a plan being debated by the council. Collins proposed designating $16 million from the city’s $92 million fund balance or reserve fund.

“We don’t have a money tree here in the back of city hall and can’t afford to raise taxes indefinitely,” Council member Kemp Conrad said. “This hasn’t been pleasant but it’s what we signed up for. We have to make tough decisions.”

The council voted to contribute $125,000 in city funding for the transition of the Memphis Sexual Assault Resource Center (MSARC) to county government control. In budget committee, the council voted to cut the entire $700,000 line item for the department. The committee action prompted an agreement between Herenton and Shelby County Mayor A C Wharton Jr. to move the center to the health department.

The council also included funding in the budget for a set of red light cameras to photograph traffic scofflaws at key city traffic intersections. The cost for the first year of the system would be $480,000, a cost proponents of the system, including Lowery, have said would be paid for with revenues from ticket fines.

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