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VOL. 125 | NO. 38 | Thursday, February 25, 2010

Council Battles Funding Issues

By Bill Dries

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As Memphis political leaders made another trip to Nashville this week seeking money for The MED, others questioned the hospital’s life expectancy.

Memphis City Council members this week delayed a vote on $2 million in emergency funding for The MED until April.

Claude Watts, CEO of the county-owned hospital, said it wouldn’t be in danger of closing without the money until around May.

The timing of a decision by city is critical as it faces other funding problems in the fiscal year that begins July 1.

The Shelby County Commission approved $10 million in emergency funding for the hospital last month.

The MED will begin drawing down on that in the next week or so, Watts said. The drawdown will be $2.5 million a month through June 30, the end of the fiscal year.

City Council chairman Harold Collins was among those who wanted to wait and see if Gov. Bredesen’s administration will come up with $52 million in the new fiscal year that it now plans to cut from what it sends to The MED through TennCare.

“There’s still time for opportunities to exist. I believe that we always – we rush to get things done instead of allowing things to play out so that we can make decisions,” Collins said. “It seems that there is a major rush to vote on this. And I’m not sure why because all of us can count.”

The possibility of federal 2-to-1 matching funds is not as certain as it appeared just weeks ago. A possible hospital bed tax faces an uphill climb in the Tennessee Legislature.

Other council members said they were reluctant to give major ground on the idea of the city not funding local government responsibilities that are countywide in nature.

The MED is funded locally by county government, with no city funding.

“It seems like we’re just playing for time to get to July 1,” council member Shea Flinn said. “The County Commission went right up to the line, gave $10 million and then let the $2 million fall on us.”

Council member Jim Strickland said the county hasn’t increased its level of funding for years.

“If we pass this, the message, to me, is going to be if other government agencies don’t live up to their responsibilities, then they can come to the city of Memphis and we’ll bail them out,” he argued. “Need should not be the only criteria we use to fund things. … Need cannot be the only criteria.”

But other council members argued need is the point.

“Politics is being played night and day on this medical facility,” council member Joe Brown said.

Meanwhile, the council approved court-ordered funding for the Memphis school system, but not to the tune of $50 million ordered in a Chancery Court decision affirmed on appeal. The council approved the 30-10-10 plan offered by Strickland.

It would pay the school system $40 million – $30 million from city reserves and $10 million from cuts to be made in city spending during the current fiscal year. The remaining $10 million would be money given on paper as the city forgives an energy modification loan.

Earlier this month, the Memphis school board rejected another version of the same plan – a 28-10-12 plan. Since the terms are the same and only the dollar amounts have changed, council members expected the school system would reject it.

Council member Barbara Swearengen Ware called it “the same old soup being warmed over.”

The school system filed suit last week, seeking another Chancery Court order requiring the city to pay the $50 million immediately.

Passage of the 30-10-10 plan also signaled the death of a short-lived idea for the city and county governments to swap funding responsibilities.

The county would have become the sole local funder of Memphis City Schools. The city would have provided one-time funding for The MED.

PROPERTY SALES 59 59 4,335
MORTGAGES 48 48 4,862
BUILDING PERMITS 100 100 10,251
BANKRUPTCIES 45 45 3,194