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VOL. 128 | NO. 111 | Friday, June 7, 2013

Wharton: Tax Rate Proposal Could Drop

By Bill Dries

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Memphis Mayor A C Wharton Jr. says the $3.51 city property tax rate his administration took to the City Council this week could drop as the council adopts controversial changes in city employee benefit packages.


“That list of benefit changes – they are not incorporated in that $3.51,” Wharton told reporters the day after the new city budget pitch council members got Tuesday, June 4.

“It’s not as if I just ignored the MOUs,” he said, referring to memorandums of understanding with unions representing various groups of city employees. “We’d have to change the MOUs.”

Wharton also said the budget presentation wasn’t a new budget proposal but in line with a request by the council to have a look at dollar figures for making long discussed and debated changes in the largest part of the city budget – personnel costs.

The administration has talked about tackling the politically sensitive changes over a longer period of time in a more gradual fashion. But a report from the state comptroller’s office critical of city finances prompted Wharton and council members to look at either making the changes in benefit and pension obligations all in one year or over several years starting with the new fiscal year that begins July 1.

Wharton described his budget plan in the wake of that report as “a happy medium, doing what we need to do right now in the short term to begin the process of stabilizing our city finances.”

“It will enable us to continue the economic growth that we are doing now,” he added. “What you don’t want to do is to make the cure worse than the ailment. You don’t want to kill the patient in the course of the surgery. Sometimes that means the medicine might not be the medicine you want.”

And the medicine will blur some traditional and historic lines that separate the mayor’s duties from the City Council’s duties when dealing with municipal labor unions.

City government’s relationship with municipal unions is always a sensitive topic with three major strikes by municipal unions in the 45-year history of the mayor-council form of government – the 1968 sanitation workers strike and the 1978 strikes by Memphis police and firefighters.

Each was an historic event with a long-lasting impact on city labor policies and the culture of city government.

Union leaders were quick to say Tuesday the council was treading on agreements made between the administration and the unions.

“Ordinarily I would say, ‘Wait a minute, you are getting into the executive branch.’ But these are different times. We’ve got to be flexible,” Wharton said.

He backed the appointment of a three-member special council committee that will work as a sort of mediator or middleman between the administration and unions. But Wharton emphasized that any recommendation by the council won’t be final.

“They will try to facilitate communications,” Wharton said of the committee. “I will be free to accept or reject any recommendations that they might make. I’m not going to get hung up on the nicety of the separation of powers at a time like this.”

Wharton is also set to begin closed one-on-one meetings with council members to specifically find what budget items there is consensus on and determine what a compromise in the areas of disagreement might look like.

The one-on-one sessions are a standard feature of contentious budget seasons in which the administration works on rounding up the seven-vote majority necessary to win approval of a budget plan and tax rate. The search for a compromise usually involves the administration agreeing to items a council member wants for his or her vote that may translate into line items in the budget or future issues that come before the council.

The process promises to be different this budget season if the discussions become about the legal checkpoints involved in labor agreements.

The council discussion Tuesday of paid city holidays and what is involved in eliminating just one of them was an example.

City employees have 13 paid holidays that aren’t necessarily holidays for public safety employees including police and firefighters but are paid.

The code of city ordinances cites only 11 paid holidays and only nine are listed in the city charter.

“Why do we pass laws?” council member Kemp Conrad asked Tuesday during the discussion with the administration and union leaders “What other ordinances do ya’ll run roughshod over?”

Both sides pointed out the additional holidays were negotiated in memorandums of understanding.

PROPERTY SALES 50 389 12,758
MORTGAGES 21 248 8,003
BUILDING PERMITS 295 813 29,934
BANKRUPTCIES 35 164 6,064