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VOL. 126 | NO. 121 | Wednesday, June 22, 2011

Council Approves City Budget With One Time 18 Cent Tax Hike

By Bill Dries

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Memphis City Council members approved a $661.4 million operating budget and added 18 cents on top of the city property tax rate, although they insist it is a one time only tax hike to pay money owed the Memphis City Schools in the upcoming budget year.

The 18 cents is an addition to the property tax rate three years after the same city council cut the city tax rate by the same amount. It came with a cut in MCS funding prompting a court fight MCS later won over the funding cut for 2008.

The council passed on third and final reading a separate ordinance that keeps the city property tax rate at $3.19. The 18 cent assessment was a separate resolution.

But Memphis Mayor A C Wharton Jr. conceded most citizens will see it as a tax hike without qualification and might be skeptical about the odds of it vanishing next year at about this time.

A proposal by council member Harold Collins two weeks ago to raise the city property tax rate by 18 cents failed on a 4-8 vote.

The council’s 10-1 vote two weeks later was a stunning come back that came after a day at City Hall spent with council members in various clusters even during the council session working out details among themselves and with Wharton. Council member Jim Strickland was the lone “no” vote. Council member Edmund Ford Jr. recused himself because he is a Memphis City Schools teacher.

The council members who voted for the increase in property taxes but not the tax rate increase two weeks later said it is balanced by pledges and specific terms by the administration to “right size” city government over several years. They called it the “biggest rightsizing of city government ever.” Several council members used the exact phrase in separate interviews after the set of budget votes.

Wharton said the 18 cents gets the city’s obligation to fully fund Memphis City Schools “off the books” and will allow the city to go forward.

Leaders of the municipal unions and their members were a strong and vocal presence in council chambers during the nearly seven hour session.

The council was never considering a proposal that died two weeks ago to privatize sanitation services. But numerous sanitation workers chastised the council for even thinking about taking such a step.

The council did approve a $13 million voluntary retirement fund for sanitation workers to be capped at between $40,000 and $60,000 per worker depending on their age and years of service with the city.

The fund would be financed with an advance from the city’s general fund that would be repaid with revenue from the city’s solid waste fund over time.

Wharton said he is opposed to privatization of sanitation services. His administration, before the current budget season, had proposed a “managed competition” in which sanitation workers might become private contractors. But the managed competition proposal was not put forward by the administration this budget season.

Union leaders representing the sanitation workers were interested in what some council members were alternately referring to as a buyout plan. But they questioned whether it would lead to privatization. They’ve also been adamantly opposed to Wharton’s managed competition concept as well.

Wharton also said his administration is talking with firefighters union leaders about a plan by which firefighters would not have to take 12 unpaid holidays in the next fiscal year as other city employees will. Wharton said the union has pledged to try to find ways to make up the amount of savings the city would realize in other ways. Wharton said as long as his administration gets the same dollar amount of savings, he’s open to the alternatives. And he said the door is open to the city’s other municipal union to make similar proposals in the next two weeks on the unpaid holidays or furlough days.

Plans to lay off 125 city workers remained in place despite the numerous changes in the budget.

The new fiscal year begins July 1. The council approved the minutes of the meeting minutes after taking the final vote making the actions final. The council votes came the day after Shelby County Commissioners ended their budget season as well.

Read more in Thursday’s edition of The Daily News.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 98 172 17,556
MORTGAGES 101 194 20,229
FORECLOSURE NOTICES 0 9 2,654
BUILDING PERMITS 0 126 36,072
BANKRUPTCIES 52 115 11,279
BUSINESS LICENSES 26 58 5,767
UTILITY CONNECTIONS 0 0 6,715
MARRIAGE LICENSES 17 68 3,984