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VOL. 128 | NO. 124 | Wednesday, June 26, 2013

Council Approves Tax Hike in $3.40 Property Tax Rate

By Bill Dries

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Memphis City Council members raised the city property tax rate Tuesday, June 26, by four cents above the recertified tax rate and put the rest of a turbulent budget season to rest.

The approval of the $3.40 property tax rate and city operating and capital budgets came in a council session that ended at 12:30 a.m. Wednesday morning.

The tax rate approved is less than the $3.51 rate Memphis Mayor A C Wharton proposed which was an increase to $3.36 just to get the same amount of revenue the city got from the existing $3.11 rate taking into account property value lost in the 2013 property reappraisal.

Wharton proposed a 15-cent tax hike beyond that to replenish city reserve funds and pay more on the city’s bond debt – two important conditions outlined by Tennessee Comptroller Justin Wilson.

Wilson’s letter and report critical of city financial practices on both fronts was a critical factor in the council’s drive to complete its budget season by July 1. Beyond the July 1 date was the possibility, however remote, that Wilson might use his powers to get the city to the fiscal bottom line he recommended.

The council gave all city employees a 4.6 percent pay raise, restoring a pay cut all city workers took two years ago. It also approved amendments in a plan by council member Harold Collins that pared down plans to layoff 100 city employees to the layoff of 50 city employees as well as cutting 2.5 percent from the Memphis Police Department budget.

Collins was one of several council members who argued the police department could cut its budget – the only one of the city divisions to increase its budget over several years – without affecting police director Toney Armstrong’s ability to put more police officers on the street.

The council left in place plans to drop 300 city employees through attrition, a head count reduction that is crucial to the city’s ability to made a $23 million increase in debt payments in a future fiscal year.

The employees would probably leave city government over several fiscal years with an estimated $9 million “attrition premium” for City Hall in each of the two fiscal years following the one that begins July 1.

Some operating budget amendments were voted on several times by the council with different outcomes after the council approved the budget proposal by council chairman Edmund Ford Jr., but rejected the operating budget as amended by the Ford plan and then tried to work its way back to reconsidering it.

Ultimately Ford’s plan was never resurrected and Collins plan which was also rejected once by the council emerged as the platform around which other budget amendments were attached.

The council considered several times doing away with the city’s weights and measures bureau for a savings of $501,000 and actually voted twice to take the action before reversing the action. Ultimately weights and measures remained a part of city government.

Council member Lee Harris tried unsuccessfully to cut the council’s $8,000 catering budget for meals on council days. He withdrew another motion to not give the 4.6 percent pay raise to city employees who have had a pay adjustment upwards in the last two years that equals or exceeds the 4.6 percent. Harris withdrew it after Wharton said some of the adjustments were made as a way of avoiding discrimination lawsuits or settling them.

Council member Bill Morrison had a plan to eliminate the 100 layoffs but instead take 105 funded but vacant city positions, most in public safety. But when city Finance Director Brian Collins said it translated to a $3.39 property tax rate, Morrison withdrew it.

Council member Myron Lowery picked it back up and took it to a vote where it failed.

The city’s capital improvements program budget or CIP budget was amended to cut $1.8 million from $3.5 million the administration had committed as the city’s share of a pedestrian overpass over Massey at Poplar Avenue. The overpass is part of the infrastructure incentives for an expansion of International Paper headquarters.

The council cut the funding to $1.7 million and made it contingent on Shelby County government contributing the other half. The county agreed to pay $300,000 of the cost initially.

The council also approved $1.35 million in funding to the Riverfront Development Corporation as the local share to get $6 million in federal funding for Cobblestones development and the development of several water taxi landings in the Wolf River Harbor.

The council voted down a call by council member Janis Fullilove for $1.7 million and then $1 million for renovation of Southbrook Mall in Whitehaven and the council defeated a call by Collins to cut $1 million in funding for the Crosstown redevelopment project.

Several council members will be the guests on Friday's edition of "Behind The Headlines" which airs on WKNO TV at 7 p.m.

MORTGAGES 54 374 1,120
BUILDING PERMITS 177 767 2,425