VOL. 127 | NO. 193 | Wednesday, October 3, 2012
Government Leaders Tout Sales Tax Hike
By Bill Dries
Just before Shelby County Commission chairman Mike Ritz and others announced a political coalition in favor of a countywide sales tax hike on the Nov. 6 ballot, Shelby County Mayor Mark Luttrell approached Ritz.
“I don’t guess you’re here to help us,” Ritz said before the two talked privately.
Luttrell then watched the press conference from the other side of the podium where Ritz, Memphis Mayor A C Wharton Jr. and other leaders backing the tax hike assembled.
For several weeks, Ritz and other county commissioners had talked with City Council members and Wharton in a plan to find some support at City Hall for the countywide tax hike.
The lobbying came after council members and Wharton tried unsuccessfully to talk the commission out of approving the Nov. 6 ballot question and then overriding Luttrell’s veto of it.
Wharton had not hesitated to say the tax hike that knocked the city sales tax hike proposal off the Nov. 6 ballot also threw a wrench in his plans to recommend a rollback of the city property tax rate this spring during budget season in Civic Center Plaza.
And as the talks began with Ritz, the prime mover behind the countywide sales tax hike, and others on the commission including commissioner Steve Mulroy, Wharton remained leery.
For him, the question was how could Ritz and others on the commission guarantee the education portion of the countywide sales tax revenue – $30.3 million – would be used for a specific purpose.
The County Commission becomes the sole local funder of the merged school district before the August merger with the July 1 start of the new fiscal year. But the commission still won’t have line-item control over the new school system’s budget. The commission will approve, as it does now, a total amount for the schools and a total amount of county funding within that amount, which also includes state and federal dollars.
The answer from the commissioners is what Wharton described this week as “a mechanism.”
Wharton has contemplated an end to required city funding of the Memphis City Schools with the merger by saying the city might fund early childhood education including some expansion of pre-kindergarten access.
The countywide sales tax revenue would go to that specific goal. And the countywide school board would be bound to that commitment as a match to private funding.
And Wharton said there is still funding that comes to the city for a smaller city property tax rollback.
“Passing this will also give the city of Memphis some additional breathing room for some of the fiscal challenges we currently face,” Wharton said.
Luttrell said it’s not a done deal yet.
“How that money is going to be channeled to pre–k is still uncertain,” Luttrell said. “There’s no specificity. It’s just not good budget discipline to ask the citizens to vote for a tax hike when you don’t have any more specificity.”
Ritz has a different view on that as well as what would follow a loss at the polls in November for the proposal with at least a $57 million gap estimated between revenues and expenses for the new merged school system.
“If it does not pass, we are looking only to the property tax to raise funds necessary,” Ritz said. “If we were to fund – and I’m not sure we would – the whole $57 million, it would be a 44-cent (county) property tax hike.”
Meanwhile, Mulroy indicated discussion may be under way with Memphis Police brass about changing plans to end the police presence in what are now city schools with the merger – about a $6 million expense for the new school system.
Ritz had concerns earlier in the talks that if the countywide sales tax hike failed, the council would move rapidly to put a citywide sales tax hike back on the ballot. He didn’t think it likely with Wharton and City Council member Shea Flinn, who proposed the city sales tax hike ballot question, both on board with the countywide tax hike.
Flinn said Monday it depends on the vote totals come November.
“I have a feeling that the vote totals could determine that. If it just gets blown out of the water, I don’t know that we would want to expend the funds on a special election in May that didn’t stand a chance of passing,” Flinn said. “If it’s a closer vote and its fails then that debate could reopen.”