The Shelby County property tax rate of $4.38 is ready for the tax bills that are to go out starting later this month.
But with the county budget season now over, some of the major themes of the Shelby County Commission’s debate over taxes are likely to remain in play.
The setting of the tax rate was just the latest wave for a commission that has major ideological differences.
The $4.38 property tax rate is a 36-cent increase from the former rate of $4.02. Thirty cents of the rate increase is to generate the same amount of revenue county government got from the old rate of $4.02 taking into account property value lost in the 2013 property reappraisal. The remaining 6 cents is a tax hike to create half of the $20 million in new funding county government is providing to the consolidated school system in the new fiscal year above the past funding county government has provided.
The tax rate in Shelby County outside Memphis remains 4 cents higher because of rural school bonds used to finance construction of Arlington High School.
A tax rate lower than $4.38 would not have meant cuts to the school funding because the commission had already approved an amount for school funding in the county budget and the countywide school board had also signed off on that amount.
Shelby County Mayor Mark Luttrell cited a legal opinion from County Attorney Kelly Rayne, saying schools funding could not be cut.
The debate on the commission Monday, July 22, wasn’t as long as other debates at the other commission meetings in which the tax rate was on the agenda. But it remained centered on the effect tax rates have on where citizens choose to live and businesses to locate.
Commissioner Terry Roland argued continuing to raise county taxes would “be the end of Memphis as you know it.”
Commissioner Wyatt Bunker said he has talked with small-business owners in particular who are complaining about the combined impact of county and city property taxes.
“This is a serious thing,” Bunker said. “Take very seriously your vote here.”
Commissioner Steve Mulroy, meanwhile, said a look he and the Luttrell administration took at small-business owners, defined as those with property valued at $500,000 or less, showed about 63 percent would pay less or no more under the new tax rate. He put the median percentage increase for those same business owners at 2 percent.
“In my opinion, the other side was overstating dramatically the deleterious effect on small businesses,” Mulroy said at the end of an unusually short commission meeting that clocked in at less than an hour and a half.
“I don’t see no big exit of people from Memphis to go anywhere,” Commissioner Sidney Chism said during the debate.
Chism had abstained on earlier votes after Roland questioned whether a day care center Chism’s family owns posed a conflict of interest. Chism said Monday that the center no longer receives funding for social services from the county and announced he no longer has a direct interest in the center.
Chism said he respected Bunker and other opponents of the tax rate increase and tax hike for sticking to their positions.
That was a knock on Chism’s fellow Democratic commissioners Justin Ford and James Harvey, who switched from “yes” votes to “no” votes on the $4.38 tax rate earlier this month.
“In the confines of your district there are some people who look like me who don’t believe what you believe and think like you think,” Chism added.
Ford called his vote Monday “one of the most important votes of my career,” as he announced he would be switching back to vote for the new tax rate.
“I’ve made a great sacrifice with myself personally to make sure I listened. I’ve listened to both sides of the argument,” Ford said, echoing the reason he gave for voting against the tax rate earlier this month. “I will continue to listen to the people of Shelby County and the leaders of Shelby County. … I understand what leadership is about.”
Ford’s reversal was critical to massing a seven-vote majority for the $4.38 tax rate.
No further readings are necessary on the tax rate because it is the original rate proposed by Luttrell. Had the commission amended it, another reading would have been necessary.
Shelby County Trustee David Lenoir said last week his office was waiting on the mailing of tax bills for a new tax rate. Those notices were mailed last year in late July and the trustee’s office collected $32 million in the first three months of the fiscal year, although the taxes aren’t due until October and are past due the following February.