VOL. 128 | NO. 131 | Monday, July 8, 2013
City Budget Debate Shifts to Larger Issues
By Bill Dries
When city leaders gathered last week for the groundbreaking of renovation work on the James Lee House in Victorian Village, the talk among them was bound to turn to the city budget season’s recent end.
“It’s really good to be here and not be talking about the budget,” city council member Lee Harris told the crowd on the front lawn of the historic home.
And a few minutes later, when Memphis Mayor A C Wharton Jr. spoke, city leaders again started talking about the city budget even if it wasn’t the topic at hand.
Wharton paraphrased a quote from the movie “Dead Man Walking.” Instead of “Never judge a man on his worst day,” Wharton’s advice was, “Never judge the mayor or the city council on budget day.”
In some ways, the mayor and council are done with the line items and dollar calculations of the budget season.
In other ways, though, the larger issues raised by a budget season that included a warning from the state comptroller’s office about longstanding city financial practices, including advances from some funding accounts and loans to other accounts, are just beginning to be discussed.
Council budget chairman Jim Strickland identified the exodus of Memphians out of the city and out of the county as the city’s most pressing challenge.
He cites U.S. Census figures showing 50,000 people have moved out of Memphis between 2000 and 2010. But the city annexed 33,000 citizens during that time in what is the normal method of growth these days for most major cities.
Since 1980, taking out annexation, Strickland estimates the city’s population has dropped 20 percent or 110,000 people.
“The sixth largest population group in Tennessee are former Memphians,” he told the Memphis Rotary Club. “110,000 would be the sixth largest city in Tennessee.”
That is what Strickland described as a “call to action”
“We really need to realistically look at ourselves,” he added. “The future annexations like Hickory Hill and Cordova – those are over, for a number of reasons.”
Among the reasons is a reluctance by the council and by the mayor going back to the later years of Willie Herenton to annex areas in the city’s reserve.
The reluctance is the budget expense to the city weighed against the property tax income that would come from areas. And Strickland said the city no longer has areas like Cordova, Hickory Hill or Whitehaven that have the kind of density that makes them attractive because of their tax base.
The exodus, by his judgment, is caused by three factors, including the state’s highest property tax burden.
“I’m not saying the high property tax rate ranks above schools and crime; I think those are by far the No.1 and No. 2 reasons,” Strickland told the group of 100 last week. “I think our high property tax rate is the third reason. That is not a unanimous opinion.”
Wharton painted the hard economic realities that dominated the recent budget season as part of being “tough” minded about civic projects like the Lee House and their value.
The fiscal concerns from Nashville shifted the city’s budget deliberations from projects and whose council district they were in and whether there was at least one for every council district to debt service and city reserves.
Wharton shows no sign of dropping such projects. Instead, he continues to say the projects have to continue, especially in cases where they have created economic momentum for future investments in some parts of the city. But Wharton has also said they will have to be balanced with the fiscal policy remedies that are the next part of the budget postseason.